Nirav Panchmatia's Blog

My daughter has 3 piggy banks

    I am not somebody who would share my personal affairs so easily; after all I am a very private person; but I observed something in my daughter’s behavior (while handling money) that I thought would be of help to us all;

Now, we all have, during our childhood, been gifted piggy banks by our parents or relatives with an instruction to save some of our pocket money that we receive from our parents & /or relatives in that piggy bank, for future use; our elders used to gift us piggy banks with the intention of instilling the habit of saving in their children or wards;

I am a child of 80s & 90s; I too had received my own, lovely, piggy bank when I was in school, gifted to me by my parents; again, with the intention of instilling the habit of saving in me;

Now I was a very inquisitive child, as I am today, (inquisitive, not child). So I could not understand the rationale behind putting money in the piggy bank, (and during those times piggy banks came with a lock that could only be opened by the parent or under their supervision & as a child I could not dare disobey their instructions), as the coins that we received were barely enough to buy goodies that I desired; footbal, cricket kit, Comics, ice cream, fancy toys, etc. etc;

My question was very simple; when I don’t have enough money to buy all that I DESIRE to buy today, where will I get spare change to put in my piggy bank? Why should I put money inside a piggy bank, which anyways was one way traffic, as it could be only opened by my parents?

But then my dad was the wisest human I have ever known, and he could convince my small inquisitive mind that I should put money in the piggy bank because:

1. In future too I would want all those goodies (footbal, cricket kit, Comics, ice cream, fancy toys, etc. etc.) but he cannot guarantee me that he will keep sparing change for me in the future too as he is doing today;

2. There is no end to our desires: No amount of Income or Money can quench our thirst for goodies; our list of desires is never ending; does it mean then that we should never SAVE?

My dad then made me an offer that blew me over;

He said, “Nirav, today I am giving you 10 Rs. every day & yet you are not putting anything in your piggy bank; maybe Rs. 10 is not enough for you; So, let’s say I double that amount to Rs. 20 per day; now, will it be enough to buy you all the comics & toys that you want to own?”

Now, that was a tough question to a small inquisitive mind; I took my time and started making list of all that I can buy with my pocket money getting doubled, literally overnight; My dad told me that I need not give him the reply immediately & he gave me a days time to decide and let him know my final decision.

Oh boy! Did I sleep that night? Of course not…..

His question was simple yet tough?

If he doubles my pocket money immediately, will that be enough to buy me all that I wanted?

I was awake making my renewed list of goodies to buy with that extra 10 bucks that I would get…

But I was not aware at that time that my dad had actually thrown a googly my way…

My list was just not stopping and even Rs. 20 was not enough to buy me all that I wanted…not even half? Why? Because the moment I realized that my income (pocket money) is going to double, my list of desires ballooned at a faster rate…

Isn’t this what happens to us all the time, even when we are adults & have grown up now?

So, the next day my father threw another googly at me? He said, with my Income doubling overnight, can I promise to save (put money in piggy bank) at least Rs. 5 every time he gives me Rs. 20?

I was perplexed; I had spent whole night preparing the list of extra goodies that I can buy with extra 10 Rs and in the morning my dad dropped a bomb by expecting me to save 50% of my extra income;

It goes without saying that Having known my dad I knew he was not going to budge; so reluctantly I had to accept the offer: at least I got extra Rs. 5 to spend, a straight increase of 50%;

But My dad was successful in instilling the importance of Saving for the future in my mind;

A couple of months later, when I wanted to buy the entire bunch of Amar Chitra Katha (my favorite comic book) at one go & when I approached my dad for funding; he declined outright; I cried, yelled, but he did not move an inch; I knew he was not going to give in to my demands but I wanted to take my chances.

As I turned around, dejected, angry & disappointed and loosing all hope, he called me back & said something that was music to my ears & something that I can never forget:

“I said I cannot fund your purchase of Amar Chitra Katha comics but I never said that you cannot buy them”. Now what? Haven’t I had enough googlies already? Did my dad expect me to beg for finance someplace else;

He then asked me to bring my piggy bank; remember, its been 6 months since he had doubled my pocket money from 10 to Rs. 20 with the condition that I shall put in at least Rs. 5 in that bank every day; I had reluctantly accepted that offer;

Now was the day of reckoning; When he opened the piggy bank (remember, my parents had kept the key with themselves), I got the pleasantest surprise of my life;

My piggy bank was full to the brim; I had never seen so much money before; at least not the money that belonged to me;

The dozen pack of Amar Chitra Katha that I was dying to buy was costing Rs. 150 (Rs. 15*12 less disc; yes, there was little inflation then & things were cheaper) & I could never have imagined that I had already accumulated enough money to enable me to purchase that entire pack of Amar Chitra Katha, many times and much more.

Any idea how much money I had accumulated? Well today the math seems pretty easy; Rs. 5 *30 days*6 months = Rs. 900; NINE HUNDRED RUPEES made me feel like a very very very rich man at that time; probably the richest kid of my colony;

That one incident has ensured that I learnt the Importance of savings & never to forget it ever;

Wait a minute. What is the topic of this blog? My daughter’s piggy banks; and here I am discussing  my experiences;

So let’s come back to present times; I have a daughter in primary school & I wanted to instill the same habit of saving in her as it was taught to me by my dad.

Now, more than 2 decades has passed since I was taught savings by my dad; a lot has changed in India since then, hasn’t it? 80s & 90s were a period when India barely grew & hence inflation was very low; The present decade is high growth decade with inflation touching double digits; So instilling only the habits of Savings in my daughters mind will not be enough; I had to think out of the box; I had to devise a strategy of instilling the habit of Investing in my daughter; and the habit of sharing too…

So how is Saving different from Investing;

Well, Saving help yelps you accumulate money but the rate of savings is not enough to beat inflation; Investing is something that gives you inflation beating returns; got the difference!

Also, I am a Financial Planner & an Investment Expert; I had to think beyond the typical piggy banks & come out with an innovative way of teaching savings, Investing & art of sharing to my child;

So I came out with an Idea of gifting 3 piggy banks to my daughter with the following instructions:

1. Piggy bank 1 is the normal piggy bank meant for Savings; here you deposit the money that you have received from your elders for future spending; it’s basically your future pocket money but once you take out money from this bank it is gone, forever;  and this money hardly grows & never beats inflation;

2. Piggy bank 2 is the new piggy bank that I have introduced for my child; this is meant to grow or multiply your money; this is the bank meant for Investments;

3. Piggy bank 3 is the 3rd piggy bank that I introduced for my daughter; this is meant for sharing, for charity, to explain to her that not everybody is as fortunate as she is and it’s the duty of the fortunate to share some portion of their wealth with those who are less fortunate

Having ensured that my 8 year old daughter has fully understood what the 3 piggy banks are meant for, I instructed her to label the 3 banks as POCKET MONEY, MULTIPLY MONEY & GIVE MONEY respectively;

Now I didn’t want to complicate things for my daughter else it would have defeated the very purpose;

So I gave her very basic, easy to understand instruction:

Whenever I give her some money, she has been instructed to distribute money between these 3 piggy banks in whatever proportion she thinks fit; She will decide not I; I had promised here never to interfere;It’s entirely her discretion;

I just told my daughter that whatever she intends to spend now or in the near future, she can put that money in the piggy bank 1 with the label POCKET MONEY;, she has also been told that once she talks out money from this piggy bank, it’s gone forever.

But if she intends to grow her pocket money, she can put money in piggy bank 2 that has the label MULTIPLY MONEY; here, I had promised her that I will double her money; whatever money she puts here will be checked at a set frequency and it shall be doubled; I shall give her equal amount of cash as she has put in this bank;

And piggy bank 3 has the label GIVE MONEY; meant for sharing, this money can neither be spent nor will I multiply it; its not meant for you at all; its meant for giving.

Piggy banks 2 & 3 have a lock which only I can open but piggy bank 1 is without any lock and she is free to open it at will, whenever she thinks fit & can take out as much money as she wants.

Now, it’s been 6 months since I gifted these 3 piggy banks to my daughter & every time I give her some pocket money, I just love it to observe how she decides to distribute her pocket money between these 3 banks; and she amazes me all the time;

So 20 rs is usually divided as thus:

Rs. 5 in POCKET MONEY, Rs. 10 in MULTIPLY MONEY & Rs. 5 in GIVE MONEY respectively;

Remember, I had promised her never to interfere; but without my interference, advice or suggestion, she on her own decided, every time, to put the largest proportion in piggy bank 2, labeled MULTIPLY MONEY; also, every time she gets money from her parents or from her grandmother, she never fails to put some money in piggy bank 3 labeled GIVE MONEY, knowing fully well that this money will neither be available for her pocket money today nor will it double for her future needs; but it’s for the under privileged.

I am proud of her;

In my decade old career as an Investment Expert, Financial Coach & Wealth Manager, during my CNBC Interactions on my financial planning show Your MONEY, across various other forums, I have travelled across India and have got opportunity to meet wide variety of people; all types of Investors will all hues, shapes, ages, education & colour; and I can tell you, it’s not easy to explain the importance of Investing, forget explaining the importance of giving money to charity.

That’s why I said that I relish the moment when my daughter is deciding the proportion between her 3 piggy banks; I love to see her hand FIRST going to piggy bank2 or 3 and then to piggy bank 1;

That’s why I said, I am proud of my daughter…

Now, I have to ensure that she never forgets this lesson taught to her by her dad….

I love you darling…Thank you dad, I am just taking ahead the lesson that you taught me…

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For previous blog articles, visit my blog niravpanchmatia.in ; I had 2 other blog addresses earlier titled niravpanchmatia.blogspot.in & niravpanchmatia.wordpress.in both of which have shifted to niravpanchmatia.in; request my old blog readers to register themselves on my new, improved blog @ www.niravpanchmatia.in


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