FIXED DEPOSIT FOR YOUR KIDS TO MOTIVATE THEM TO SAVE AND SAVE

Most if not all of you reading this, are educated and earning good money….. and so are your relatives.

Long gone are the days when we received RM1.10 or RM2 Ang Pow. Today kids get lots of money from their parents, grand parents and relatives.

So in order to teach you what you should do, I will tell you what I did for my children.

I opened Kids Savings Account and Fixed Deposit Account for all my children when they were born.

I will deposit my children’s money (Ang Pow they received for CNY and their birthdays or whatever occasion) into their individual Kids Savings Account and minimum once a year into Fixed Deposit (money in their Savings Account and CNY Ang Pow).

Once they are old enough, I will show them the money they have in their Savings Account and Fixed Deposit. And eventually they will see their money growing. So much so, when they are in their teens, they will automatically hand over their money to my wife (as I was busy with work then) and ask her to deposit the money into their Savings Account. And once a year (usually during CNY 3rd or 4th day when the banks open) I will then go to the banks and transfer the money in their Savings Account PLUS add whatever CNY Ang Pows into Fixed Deposit(s). Over the years I will combine different Fixed Deposits into a single Fixed Deposit so that max they have 3 FDs at any one time for easy management.

In respect to the above, if you show your child that his/her money can grow and grow yearly by simply saving, it will entice them to get into the habit of saving and shiok sendiri knowing they are getting richer without having to do anything.

I guess from a child’s view……. daddy working like shit to earn money but yet tells mummy he got no money for a new Dyson Vacuum or Kitchen Aid Mixer….. I (the child) don’t need to work but I have lots of money in the bank and growing yearly without needing to work!

Above paragraph of course is from my sick imagination…..

Fixed Deposit interest rate may be low now but it will go up. During the recession in 1997 it went up as high as more than 14%!!!!

Would you believe me if I told you that my eldest son has RM 6 figures in his FD and the money is purely from his years of Ang Pows and compound interest? My eldest son left for USA when he was 17 years old to pursue his first degree and have been overseas since then. Today he is earning 6 figures annually in Aussie dollars and he is not bothered with his money in Malaysia which I still control since his accounts are still Joint Name with me, which means I can use it anytime I want without him knowing, hahahahaha.

Same case for my 3 younger children where their money in FD will continue to grow and grow since they won’t be needing it as they are now working and also earning big bucks overseas.

I have mentioned before and will repeat it here, the Ang Pow your children receive is their money and you are only holding them in trust until they are adult where you no longer have control. So best you teach them the importance of saving and see their money growing to shiok sendiri instead of spending to get the same shiok sendiri sensations.