This episode focuses on spending, saving and donating. The main reason you’re here on this blog and listening to the podcast, is because you want your kids to have good money smarts as they grow up.
In order for this to really work and not just be a theoretical lesson, kids need to have real money to manage.
They need the opportunity to set their own spending goals (more to come on that in future episodes!), understand what it feels like to actually spend and give away that money (once it’s gone it’s gone!) and to make mistakes.
Isn’t it better that they learn from a $10 mistake instead of a $10,000 mistake when they’re older and have more to lose?
A recent Cambridge research study has shown that our understanding of money is formed by the time we are 7 years old. That’s not to say that kids can’t form good habits when they are older, it just might be more challenging to change their money mindset once they hit the teenage years.
It’s never too late to start, but I want to encourage mine while they are young and are eager to listen and learn from me!
If you don’t give your kid an allowance yet, now might be a good time to think about what you can afford to give (or allow them to earn) and what you feel is age appropriate.
If you can’t afford to give a weekly allowance, perhaps you can find some opportunities for them to earn some money themselves.
I remember seeing a mum’s post over the summer on our local community Facebook page, that her 3 young kids wanted to earn some money cleaning cars and pulling weeds out of people’s yards, under her supervision. Your kid might be able to clean a few cars, sell some of their old toys at a garage sale, shovel snow off a neighbours driveway etc.
This episode discusses kids putting their money into 3 jars: Spend, Save and Donate to help them see where their money is going.
Keep some for themselves, give some to others and save some for later.
How much should go into each jar? Well that’s totally up to you to decide, but we recommend 10% save, 10% donate and 80 % spend to my kids.
Initially I got some push back about adding to the save and donate jars regularly, but when I asked my 6 year old to count how much out of his $4 allowance was going towards spending and how $3.20 was still a lot going into the spend jar each week, he agreed.
As you read further, you’ll see the amount he actually ended up putting in his donation jar changed, when that pot of money had a purpose he identified with!
In this episode I discuss how we need to think carefully about how we use our spending money, because money isn’t unlimited- when it’s gone, it’s gone. I don’t go into too much detail since episode 4 is all about smart spending, impulse buying, needs vs wants etc.
Moving on to the 2nd money jar, the savings jar, I discuss how this is a good habit to get into while young. I explain what a habit is and then back it up with some examples like putting on our seat belts in the car and flushing the toilet.
Kids should get into the habit of saving while they’re young. It doesn’t matter how much it is, it’s more about the process of putting some aside for later and not spending it all right now. (For more examples on talking to your kids about habits, see the 3rd activity at the end of this post).
A while back, I was chatting with a friend about my plan for creating this podcast before it launched, and she mentioned that her cousins parents had talked to her about money and especially about saving when she was very young. She stuck with it over the years, squirreling away whatever she could regularly, and now as an adult, she is in a happy place financially.
Looking back, my friend wished that her own parents had taught her the values of saving when she was younger, and she promised herself that she would teach her kids.
She’s not alone, many of the parents I’ve spoken with have said the same- they never learned about money management from their parents, and they want to make sure they teach this valuable skill to their own kids.
Finally, the 3rd money jar I talk about is the donate jar. Donating and wanting to give, is such an important value for our children to develop because it teaches them compassion, generosity and sacrifice.
At the beginning of our 3 money jar journey; before we defined where his donation money would go, Kian would hesitate to add to this jar. However, I found that he gave without hesitation, when he knew exactly where his donation was going.
When his donation had a purpose and a destination that he could relate to, he was more than happy to allocate even more than my suggested 10% without any prompting from me…a proud mama moment for me!
If your kid pushes back at first, ask them what charity or fundraiser they would like their money to go towards.
It could be for the local food bank, your local children’s hospital, something you see on the local news or a specific fundraising activity that’s happening in your community like raising money for a new school playground.
I saw a post the other day on Facebook for a local fundraiser happening next month by our local firefighters association. They are doing their annual 72 hour rooftop camp out fundraiser for Muscular Dystrophy.
I didn’t even have a chance to talk about what charity they were fundraising for, because as soon as I said firefighters were fundraising, Kian instantly said “can we go and can I give them my donation money?”.
Talk about examples of where you may have donated something (money, time, physical items) recently. It may have been a specific charity that is close to your own heart or you wanted to support someone collecting money for a charity they believe in and are raising money for.
Talk to them about which fundraiser/charity you donated to and what their purpose is. If you haven’t donated recently, maybe consider matching or doubling whatever your kid donates next, so they can see you practice what you’re preaching.
“What money does to us, is that it magnifies who we are. So if we are good, kind and generous, money will magnify those qualities”Ed Mylett
Let’s make sure that we are raising our little humans to understand what they have to offer to the world. With the money that they have, let’s encourage them to donate, to share and to serve others, not just themselves 🙂
So what’s next?
After listening to the episode, build on the content by doing a few simple activities. Define how your kid should split their money, make some money jars, talk about habits (yours and theirs!) and find a charity or fundraiser to donate to. Don’t know where to start? Keep on reading…
The money jar money split
You’ll need to discuss how much of your kids earned money, birthday money, allowance etc should go into each jar. If you have a significant other, try and make this a joint decision and discuss it with them first before talking to your kid about it.
Don’t know how much allowance to give? Some parents give a $1 for every year of their age, but you should give whatever feels comfortable and affordable for you. We give our 6 year old $4 and feel that is a good amount for him to manage at this time.
End of episode activity
Make some money jars!! If your kids don’t have 3 money jars already, give them some supplies to make their own. You probably already have everything they need at home, it doesn’t have to be anything super fancy.
Up until recently, we’ve been using regular piggy banks, which my kids get a bit frustrated with because the coins and bills get stuck and they can’t get them out easily for counting or to take with them to the store.
We made our new money jars using clear glass mason jars (pasta sauce jars from the recycling bin!). If you don’t want to give your kids glass jars, save some of those empty plastic mayonnaise or peanut butter containers and use those instead!
To decorate the money jars, cut out some paper that will fit on one side of the jar. Remember to keep the jar mostly exposed so they can see their money grow. On the piece of paper, make sure to have the word “ Spend” written on it using pen, letter stickers etc and have your kids decorate it however they want.
Repeat the process for the “Save” and “Donate” jars and then stick the papers using double sided sticky tape, glue or even regular scotch tape, to each of the jars. Like I said, they don’t need to be super fancy, just functional.
When I first did this activity myself, I thought it would look cute and ‘Pinterest worthy’, if I used chalk board paper. I already had some sticky back chalk board paper and some chalk pens, but I quickly realized that this won’t work for kids because they will just rub everything off the next time they go to empty it out…so while they look pretty in photos, they aren’t very practical for this activity.
Don’t forget to have fun! Maybe you could make yourself a ‘change’ jar at the same time, so that whenever you get some small change, you can save it for their allowance.
Talk about habits- yours and theirs:
Think about some of yours and your kids good habits and talk about them. Try and keep it positive, so it doesn’t turn into a lecture on the bad habits they have, which could turn them off the conversation. It’s a good time for us parents to also think about some of our own habits…
We form good habits for good reasons. They keep us safe e.g. putting on our seat belts, they make things easier e.g. saving now so we don’t have to borrow money later at high interest rates, or they are simply the right thing to do, like picking up your dog’s poop.
When you find yourself, your kid or even a stranger displaying a good habit- talk about it for a minute. For example, if you’re in a grocery store parking lot and see people putting their shopping carts in the designated area instead of leaving it in the parking spot next to their car, talk about that.
Explain that it’s a good habit and the reason we do it.
After unloading our groceries, we don’t think about whether we should or shouldn’t return the cart- instead, if it’s one of our good habits, we automatically start looking for the closest designated cart area.
We do this so that we don’t inconvenience other shoppers by taking up the last available parking spot or potentially causing damage to someone else’s car if it’s windy and the cart starts to move by itself.
Examples of good habits your kid might have could be: Putting their shoes on the shoe rack when they come home, putting their dirty underwear straight into the laundry basket (instead of lassoing it around the room!) or tidying up their toys without needing to be asked.
And if your kid does any of these without being constantly nagged…you my friend, are my hero!
When it’s allowance day, while they’re splitting the money into the 3 jars , remind them of some of the good habits you talked about recently and how making a habit out of saving, is so important.
Where to Donate:
Have a chat about the types of things your kid is interested in and would feel good about supporting. Perhaps they love animals and want to donate to their local animal shelter. Maybe there are local fundraising events happening in the next few months that they can save towards and get excited about.
See if you can find some local fundraising events or charities that spark their interest to support through Facebook groups or your local community website.