The South London mum wanted money to become a normal topic of conversation at home
A mum has shared how she educates her seven-year-old daughter about finances by dividing her pocket money into “spend”, “save” and “invest” jars – offering a 12 per cent yearly return on her investments.
Malavika Datar, 39, from South London, introduced the idea to her daughter Purvi on her 7th birthday, wanting financial matters to become a normal topic of discussion at home. Having been raised in an Indian household where money was rarely mentioned around children, Malavika wanted to take a different approach.
Malavika, who works for a retail supply chain, explained: “In South Asian families, especially Indian families, we don’t really talk about money with our kids. We wanted to start talking about money early and make it something we all felt free to discuss. Those are the values we wanted to bring into our family.”
She added: “When Purvi turned seven, it felt like the right age to make it a bit more structured. She is rather good with it and I was surprised how fast she picked up the concept. I think the first easiest to learn was saving, and investing took a bit longer.”
The family previously gave Purvi £3 weekly to use as she wished. She now receives £4 and chooses how much enters three glass jars labelled Spend, Save and Invest.
Malavika said: “We made it £4 so she couldn’t just put £1 in each jar. She actually thinks about what she wants to do with it. Interestingly, she spends £1 every week, saves £2 and invests £1.”
To give Purvi an introduction to long-term financial planning, Malavika provides interest on the investment portion. She explained: “For every pound she invests, we add 12p over the year. It’s our way of showing her how investing works.”
Purvi also receives a spreadsheet detailing how much she holds in each jar. Malavika noted: “When we go to the shops, she already knows exactly how much she has available to spend. She usually buys cute stationery because she loves stationery, something for her school bag or sometimes a chocolate.”
Initially, Purvi liked putting more money into savings as she believed she could withdraw it at any time. However, Malavika said her daughter is gradually recognising that the investment pot offers a better return.
She said: “The investment money can only be withdrawn twice a year – around her birthday in June and at Christmas in December. She’s starting to understand why leaving money invested can be worthwhile.”
Malavika added: “When it got to June this year, I prepped her about if she wants to save for something that she can get in December then she really has to think about saving now. It is a good lesson for her, and I think it’s one of those things that you can just take into adulthood so you can be more responsible with your money.”
Additional household tasks also provide Purvi with opportunities to earn extra money. While she has no specific savings target at present, she does have one ambitious goal in mind.
Malavika revealed: “Her long-term goal is to buy a green Mini Cooper. She hasn’t worked out how much one costs yet, but hopefully when she’s older she’ll understand what it takes to get there.”
The family also wants Purvi to learn the importance of forward planning. Malavika explained: “If she wants something at Christmas, whether that’s a set of books or a musical in London, we talk about saving for it months in advance rather than waiting until the last minute. It is a skill set that every child should learn.”
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