How do I teach my child the difference between saving and hoarding?

Hello. My name is Ron Blue, and one of the most difficult, really, principles, fundamental beliefs, that you need to teach your child is the difference between saving and hoarding.

Well, I believe this: that you typically save for something. However, you hoard when you come to the conviction that “I need more and more and more, and I can't spend it for anything,” because my security is built around the hoarding. But, if you are saving for something, even if it's to put the money away for emergencies, then putting it over into an emergency fund is not hoarding, that is just pre-planning. That is good planning.

When we taught our children to manage money, or how we taught them, was using an envelope system. And one of the things that we repeated to our children was that they had a savings envelope. And, we taught them that it's okay to dig into your savings envelope to buy something. Maybe it's a tennis racket, maybe it's a bicycle, and maybe it is a piece of clothing. Maybe it is something that you're teaching the child to save for.

It becomes hoarding when all they want to do is save it, save it, save it, save it. And I tell you what, with five children, we did have at least one hoarder. And we did have at least one spender. And the "save" envelope was the way that we could teach the principles of saving for a purpose, as opposed to hoarding for security.

Click here for the June 6, 2009 Blog Entry