It may seem difficult to save from the pocket money you earn. But just try it once and you will be hooked.

Last month, we saw how you can earn money during your summer holidays. Hopefully, you are brimming with ideas that can fetch you money this summer! But merely earning money is not enough. It is important to save a portion of what you earn, if you want to grow your business or purchase things that are expensive.

Resist the urge

But how does one save money? Everything is expensive and the prices of goodies only keep going up. A trip to your neighbourhood mall and before you know, you have spent all the money that you had earned or received over the last several months. A couple of impulse purchases and you are out of your money. If this keeps repeating, you may wonder what the point of saving money is.

My neighbour’s son Arjun, always has a long list of games, toys and comics to buy. So, as soon as he gets any money — pocket money, gift, reward for doing household chores, academic performance and so on, he promptly spends them. As a result, he does not save money. He feels that he gets very little money compared to some of his friends and so there is no way he has enough money to save.

How many of you are in Arjun’s position? How many of you really believe that his arguments against saving are valid? Are you sure that you cannot save enough money, if the allowance or pocket money that you get is less than what your friend gets?

One of the best books about money is The Richest Man from Babylon by George Clason. One of the lessons from the book is this — As our wants are high in relation to the money we have, it makes sense to first save a percentage of money that we earn (or get as pocket money, in your case) before we spend. This, of course, means that you will have less money to spend as compared to before. But do this regularly, and soon your savings will start growing right before your eyes. Before long, you will have a lot of coins jingling in your pocket. You could park this money in a bank deposit or even use it to start a new small business venture.

Hopefully, from this month, you will regularly save a portion of your pocket money, no matter how little it is. Next month, we will see how you can put the money you save to good use.

Young World Money-Wizards Quiz #19

Recently, this tiny European country got in to a big money problem and lot of people who had kept their money in its banks, lost a large part of their bank deposits. Can you name the country and can you also describe the problem and explain how it was resolved?

If you know the answer, email it to youngworld@money-wizards.com. The first five correct answers within seven days will each be awarded flipkart evouchers worth Rs. 250. The results and the answers will be published at www.money-wizards.com.

About Money-Wizards: A company in financial literacy and money education. They conduct workshops and after school classes on money education for school children. If you want Money Wizards programmes in your school or neighbourhood, write to Info@Money-Wizards.com