This is a post from Danny Kofke, Everyday Money Hero and author of “How To Survive (and perhaps thrive) On A Teacher’s Salary.”
My wife, Tracy, is a stay-at-home mom to our two young daughters – Ava, age 6 and Ella, 3. We don’t make a large salary so we have to be frugal with our money. We are trying to pass on our values to our children.
When Ava turned 3, we started paying her an allowance every week for chores that she did (Ella just turned 3 so we are now doing this with her too). These chores were pretty easy to obtain – cleaning her room, brushing her teeth, etc. I am not a big fan of rewarding people for things they should be doing but wanted to start off with things she could easily do so I could teach her about managing money. We checked each chore off on a daily basis and at the end of the week Ava got paid for completing those chores. Ava has three jars – 1 labeled SAVINGS, 1 GIVE AWAY and the other SPENDING. Upon getting paid, Ava first put some of the money in the GIVE AWAY container, then SAVINGS and finally SPENDING (she knows the correct order).
Note from Jason: I’m a big fan of teaching kids with the give, save and spend banks. My wife and I are in the process of doing this with our 5 year old daughter. She recently received some money from the tooth fairy. Thinking she’d be ready to spend it, I asked her if she wanted to go to the store. Instead, she told me she was going to save it. At the young age of 5 she knows what it means to save! I’m so proud of her. Be encouraged as children can pick up on these principles at a very young age.
When Ava turned 6, we raised her expectations. In order to get paid now, she has to gather the garbage around the house every week and clean her bathroom once a week – this includes cleaning the mirrors and scrubbing the toilet. Now that she knows how to manage money, I want to show her that you have to work to earn it.
These 3 jars have worked well for us. If Ava sees something at the store that she wants (now that she is 6 this seems to happen more and more) Tracy and I tell her we have to go home and look in her SPENDING jar to see if she enough to buy it. We use her SAVINGS jar to save up for items that might cost a little more money. Ava has used the money in her GIVE AWAY jar to buy a present for a student at my school who lost her father and for a canned food drive at our church.
I hope the lessons we are teaching Ava now will carry on into her future. If she handles her money this way – gives away 10% first, saves 25% and spends the rest – I feel she will be wealthy in many ways.
What do you think about this approach for teaching children about money?
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