We were trying to decide how to approach money management with our children at a very young age. After doing some research we came upon Dave Ramesy, a Financial author and radio host who helps people get control of their finances. He recommends that financial education be taught starting at a very young age. One of the ways is to use a system which allocates money into savings, spending and giving categories. We took a similar approach in our home.
Allowance is handed out once a month in our house. The amount you get depends on your age (three year old = three dollars). The money is not tied to chores as we expect the kids to keep up with their family responsibilities with our without allowance. What we really hope the allowance is doing is teaching them, at a young age, a thing or two about money.
The kids have three places where they keep their allowance which they split into thirds each month. There is jar for savings, spending and sharing. The savings container happens to be the kids trusty piggy banks. As for the spending and sharing jars, those are reclaimed spice jars they decorated their selves. The three year old, for example, splits up his allowance so that one dollar goes in each container. The savings is clearly for long term goals, ideally we’d love to see the kids put this money in the bank at one point. Spending money is available any time and they are allowed to use it at their discretion. Sometimes its for a toy they have been eyeing at Target, or just a gumball at the barber shop. At the end of each year they get to decide who to give the sharing money to. It could be our church, the local Ronald McDonald House, or any other group or person they wan to support.
This was the first year we tried the allowance jars on for size. The kids are asking new questions about money and have asked me and my husband why some people do not have enough. The save spend share jars great learning experience, and I look forward to seeing where they decide to donate their money at the end of this year.
Leave a Reply