Forget About Piggy Bank. Try This Instead.

You may have seen this money management approach before. Kids are given three jars: one for saving money, one for spending money, and one for giving money to good causes. 

These jars – labeled Save, Spend, and Give – supply children with measurable, achievable goals and tangible results. As kids receive money, they decide which jar or jars to contribute to. Ideally, some form of balance will result, and children will learn the power of balanced money management. This is all good in theory.

  • Save
  • Spend
  • Give

You haven’t met my son, though.

The first few attempts at this, the only jar he constantly filled to the top was the one labeled “Spend.” We would all hear the sound of coins jingling and clanging into the jars in his bedroom. We would picture perfectly balanced amounts of money in the three jars, but no. All of that racket was directed at the Spend jar. How did my son finally understand the idea here, that the goal is splitting the money into the different jars?

Teaching children effective money habits can be challenging, in general. However, there are many tactics for us ,parents, to use that will help their little ones establish positive habits in the future.

The “Save, Spend, Give” method can work wonders if it is set up and executed properly.

The jar for spending is very important. Many money lessons can be learned through kids’ accumulation and spending of money. They can learn the value of a dollar. They can see how to stretch money by shopping around, and by looking for generic products instead of name brand ones. Kids can see which coins are worth something, and how much money it takes to achieve a goal. They can get an idea as to how it can take a long time to save money, but a quick (sometimes way too quick) time to spend it.

Kids like to spend money.

At least, they like the things that can be bought with money. Candy, toys, Pokémon cards. The Spend jar is reserved for certain things that a kid really wants to buy. For my son, it is anything related to Minecraft and Legos. Lots of kids have their eyes set on that one thing, and that’s what their Spend jar will be used for.

The Save jar can lead to habits that will help kids save in the future. Many wealthy adults say that the importance of saving, and starting to save early, cannot be said enough. Saving at a young age, and enjoying the fruits of saving that money, can help lead to an adult who accumulates wealth. Some kids love to save money. Watching that jar fill up and up, knowing that in the end, they get to keep that money, is exciting. I still don’t know if my son truly enjoy going to the bank to deposit his latest batch of cash, or the lollipop he gets there every time. Either way, the bank is a happy place for them. The Spend jar is a motivating factor for that.

The Give jar is the most complex. It encourages empathy, and children may get that fuzzy feeling that comes when you help others. It is a teachable moment, when a child puts money into the Give jar, though they may be confused about what it truly means to give. We all know the value of charity and giving to others. Many children know this at a young age, too. The hard part with this jar is that once it is filled up, the parent may take it away. They take it to make sure it gets delivered to the proper recipient: St. Jude, Red Cross, UNICEF – whatever cause you and your kids believe in. Kids often don’t see the direct result of their contributions, even though they are certainly helping others in need.

 A lot of parents agree that clear jars are better than a solid-color piggy bank. When kids see exactly how much money they have in each jar, they can be motivated to keep on saving. Solid-color piggy banks can be frustrating. They tend to feel heavy at about half-capacity. Kids open them up and realize they still have a long way to go. It is a lot more inspiring to see those coins piling up every time you add to the jar. Children get excited to see those concrete results.

There is no perfect percentage to be put in each jar. Even as adults, we have different money habits. Some of us like to spend (like me), some of us like to save, and some of us like to give (my whole household could do more of this). The idea is to have some kind of balance. Kids like to have a certain amount of control in their actions and decisions. By giving them the option of where to put their money, they are given ownership of their decisions. We can guide them. We can use the jars to teach basic math skills and to show cause and effect. You add more to this jar over and over, you will have less for the other jars. If two of the jars are almost full, we can point out that the other jar is falling behind. We can remind them all the time what the jars represent.

Many experts suggest that money habits –good or bad- are learned by age 6 or 7. Not that they can’t be undone, but bad habits do die hard. On the flip side of that, good habits become a part of our routine easily, as well. If kids are taught to save, spend, and give appropriately at a young age, they may hold onto those habits into adulthood.

Overall, I think that every proven strategy helps groom happy, responsible little money managers. Some people don’t realize how early really good money habits begin. The “Save, Spend, Give” strategy can be a great item for parents to have in their toolkit.

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