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BOOK 3The Money Managerswritten by Mala Kumar illustrated by Deepa Balsavar

Do you know who

Kuber, Dhanadhan and Chanakya are?

Shall we buy a badminton set?

Make your own

piggy bank!

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We spend a big part of our lives using money in some way or the other. Money keeps moving from one place to another, and from one person to another. As we grow up, we learn to make the best use of our money.

There are experts who can tell us how to manage our money well. There are many people and institutions who help to make our money grow. We shall call these people or institutions our Money Managers. Some Money Managers help us save, some lend money when we need it, and some others help our money grow.

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Terrific TrioThere are three kinds of money managers. Let's put these managers in three teams called Team Kuber, Team Dhanadhan and Team Chanakya.

Did you notice that there are some players who are in more than one team?

TEAM KUBER TEAM DHANADHAN TEAM CHANAKYAThe Money Savers The Money Lenders Those who make money grow

Piggy bank Money Lender Bank

Money Collector Bank Insurance Company

Chit Fund Relative Fund Manager

Bank Pawn Broker

Self Help Group Self Help Group

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The simplest kind of manager is a money saver. A piggy bank is what most children use to save money. Money collectors, chit fund organisers, self-help groups and banks help us to save.

Team Kuber, the Money Savers

I have an idea!Let's save a little every week.When this is full, we can buy our own cricket set!

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My Fat PiggyThe simplest kind of money saver is the Piggy Bank. This is an example of home savings. Piggy banks used to be made with clay, ceramic or glass. One could drop coins or folded notes through a slot on top. The only way to take out the money was to break open the piggy bank. Later, piggy banks came with small openings through which one could take out the money. Now we do not have to break such piggy banks!

Why is he called Pygmy Collector?

Lala Lalchand is a huge man. But he is called a pygmy collector. He is not a small-built man like the pygmies, but the money he collects from the people in our community are very small amounts. Why do people give him money?

The Pygmies are a tribe of small people who live in various parts of Africa.

The word pygmy has now come to mean anything small.

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Quick, take this money before I spend it!

You want to buy a colourful seat cover for your bicycle. Your parents refuse to give you money for that since they don't think it is a necessary purchase. "Buy it with your savings if you want!" says your mother. The temptation to break open the piggy bank is strong. If you do break it, then you are likely to feel bad later since you probably were saving for something bigger, like a football.

Grown-ups have the same temptation when they are in charge of their own savings, and when the money saver, like a piggy bank, is close at hand. To avoid such situations, they save money with Money Collectors, or Pygmy Money Collectors like Lala Lalchand. A pygmy collector meets all his clients, or people who have decided to save with him. He collects the savings of each person every day and puts it away in a safe place. He writes down the amount given by each saver in his little book, so that, at the end of the month, both he and the saver knows how much each of them has saved with him.

Before handing over money to anyone, one must always find out if the person is trustworthy. Lala Lalchand is a very senior and respected man in my community.

What if the money collector runs away?

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And don't forget each month one of us gets to draw out some of the money!

Let's start a Fund!The chit fund is a special kind of saving system that is practised mostly in India. A group of people, let's say 20 people, who want to save together become subscribers to a chit fund. The group decides what the saving amount will be each year. The group also decides when the chit will start and how long it will run.

Each month, a meeting is held, one member gets a chance to take a certain amount of money from this collected money. This member is decided by a draw of lots. Or, if a member needs money urgently during that particular month, she asks for it. At the end of 12 months, members have not only earned an interest (called dividend) each month, but also get back their saved money.

It is very important to make sure that the chit fund run in your village or community is registered or run by a trustworthy person.

How does this chit fund work?

We each give `100 a month. That means I give `1,200 a year.

And together, we save 20 x 1200, 24,000 rupees!

That's great! I want to join this chit fund!

The money is invested. At the end of the year we get back our money and interest on it!