by Diana Moulton
Everyone knows about the piggy bank that the little boy or girl has hidden away in some secret place. Many of us are also accustomed to grandpa or grandma pushing away a few dollars in an old mattress or some other unimaginable crevice, where often they are forgotten. These cultural methods of saving usually come in handy in cases of emergency but they seldom result in the type of savings that we wish to have for ourselves. If we are to save ourselves from living a life of poverty then we no doubt need to set aside enough for the proverbial rainy day.
Savings should be planned, organised, consistent and purposeful. Too many of our savings practices are haphazard and short-term. They do not generate or create the type of wealth that is necessary to set us along the road to riches. We must have new and more effective ways to save in order to fulfil the dreams we have for ourselves and our children who are our future.
In order to create a better culture of savings and investments, we should start with our children. From birth, indeed until death, every person should put aside a little with long-term goals in mind. Far too many of us reach adulthood with nothing but the clothes on our backs. Far too many of us are totally dependent on our parents well into our twenties and thirties merely because we were never taught the value of saving and investing for adulthood, the critical stage of human development.
Instead of giving our children lavish birthday parties with lots of goodies, give them a bank account with an established banking institution. In an effort to foster good saving habits, we should also teach them the basic principles of financial management and accounting. It is a terrible mistake to wait until you are an adult to think of opening an account with a bank or credit union. Start the children from birth by opening an account, giving them the opportunity to utilise the value of time and money in order to reap a bountiful harvest in their adult years.
Another safe and valuable way to save is through insurance. There is wisdom in purchasing an appropriate insurance policy. Insurance is not just protection from accident and injury. Insurance is a safe, sure system of solid, sound savings. Starting a policy for a child puts them on the path to achieving their long-term financial goals, such as saving for tertiary education, the down payment on their first home or funding for their own business. The ICBL has several policies that meet such requirements. These include the Universal Life Policy where most of your premium is allocated towards savings, on which you will also earn compound interest.
We are living in changing times. Life must be changed to suit these. Often, when we are young we do not stop to think about the future and the planning that it entails. We need to change that mind-set and instil in our children what our parents did not do for us if we are to avoid the same pitfalls. The children are our future, therefore in order to ensure a stable financial position as they grow older the time to start them off is when they are young.
*Diana Moulton is an Internal Sales Representative with the Insurance Corporation of Barbados.