kids-and-money21Teaching Kids about Money – Part 2

by Michelle Lambright Black

If you haven’t already read yesterday’s blog, please make sure to check it out when you get a chance.  We laid a foundation yesterday for the subject we will be discussing the rest of the week:  how to educate children about money in a way that will help them grow into financially responsible adults.  Remember; keep coming back each day this week to receive the full benefit of this blog series.

Lesson #2:  Establish the Habit of Saving Early

We discussed the idea of giving your child an allowance yesterday.  However, remember that the allowance your child receives should be supervised.  As a parent, you can use these weekly funds to teach your child a valuable lesson.

One simple way to teach your child how to save is by using a jar system.  Start out by purchasing or cleaning out 3 jars.  These 3 jars should be labeled “Giving,”  “Saving,” and “Spending.”  In order to introduce your child to the jar system we suggest scheduling a craft time on the next day your child’s allowance is due.  Help your child to decorate the 3 jars with paint, embellishments, ribbons, etc.  Just make sure that each jar contains one of the labels listed above.  Once the jars are decorated (and dry) then it is time for you to teach your child how to fill them. 

Make sure that you give your child their allowance in small bills (ideally 1 dollar bills) in order to make this process easy to understand.  You should decide the percentage of allowance money that your child will put into each jar before beginning the teaching session with your child.  Let’s assume that you give your child an allowance of $10 per week.  Here are our suggestions on how to help your child allocate their funds:

The Giving Jar - $2 (or 20% of your child’s allowance).  By saving 20% of their allowance money your child can learn to give a 10% tithe to your local church and 10% to either charitable opportunities within your church or another charitable organization.  It is very important to teach our children the value of sharing our earnings with others.  (FYI, if you do not know which charitable organization you would like your child to give to we suggest  They have giving programs available so that your child can help send funds to another little boy or girl in need.)

The Saving Jar - $3 (or 30% of your child’s allowance).  The most important rule of the savings jar is to remember to teach your child that these funds cannot be spent.  You should determine what your child is saving towards.  This is something that you can do together with your child or you may decide ahead of time what the savings goal will be (i.e., college fund, car fund, etc.).  These funds should not be accessed for any reason other than the goal that you and your child have determined together. 

The Spending Jar - $5 (or 50% of your child’s allowance).  Ok, this is the fun jar.  This is the jar that your child will love the most.  However, it is still crucial that your child learn to spend these funds responsibly as well.  It is probably not a good idea to simply give your child these funds to spend whenever the urge hits them.  Instead, you might want to plan a shopping day once a week to take your child to the toy store or candy store so that they can have a little fun.  Remember, your little one needs a reward for all the discipline they are learning with the “Giving Jar” and the “Savings Jar.” 

Please visit us again tomorrow as we continue to explore effective ways for parents to teach their kids about money.  If you have found this blog to be helpful, please feel free to forward the link to your friends.   

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