Browse Tag: balance

How National Bank of Mom Rewards Savings

By this time, you already know that we subscribe to a three-envelope system (complete with registers) for savings, spending and giving. At times, we also use an additional envelope for short-term savings — when J is saving for a larger purchase a few months in advance.

The first stop in our banking process (and the reason for the name of this blog) centers around the savings envelope.

Every month on the 9th, I pay interest on the total in J’s savings envelope. To make it enough that he can see a tangible result (and earn more than the few cents he would at a bank), I pay 3% monthly.

I create a bank statement, give him a printout and also email him a copy. He writes the interest amount in his savings register to balance the account.

I developed a spreadsheet to calculate the amount and format a nice-looking statement for him. You can download it here! Fill in the sections in blue on the first sheet. Each month, enter the deposits made in the appropriate section, and the interest and totals will recalculate. Print a copy or save as a PDF and email away.

What is interest?

When borrowing money, interest is the money that you pay on top of what you borrow. Borrow money, pay it back AND extra.

When saving money, interest is the money that you earn. The bank “borrows” money from you and gives you a percentage of that money (for the privilege of using it). Put money in and get that amount back PLUS more.

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National Bank of Mom Savings Envelope with Register

Our Savings Envelope & Register

Up until about six months ago, when my son J would receive money, we’d put it in an old lemonade jar on his dresser. It would sit there until it filled up, at which point we’d head to the bank to deposit it into his savings account.

All was well, but I had this feeling that I could be using this money to teach him some important lessons.

I did some research and came across the Moonjar. The Moonjar is a jar with three compartments — one for saving, one for spending and one for sharing (or giving). I also found the Money Savvy Pig — a piggy bank with four compartments for saving, spending, donating and investing. And for all the crafters out there, there are a TON (and I mean a TON) of DIY posts on blogs and Pinterest about creating your own jars.

These were good ideas, but the idea of lugging around a jar full of money was absurd. Wouldn’t an envelope or wallet be better? You know, like normal people carry? Plus, even more importantly in my mind, I wanted him to know exactly how much was in each “account” at any given point and learn to balance the accounts. (I am one of two people on the planet who actually balances their checkbook. Actually, I found another! Joan on Man vs. Debt!)

With a plan in place, we embarked on our hunt for envelopes and a register.

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