Raising kids is probably the biggest responsibility you’ll ever have. Raising financially savvy kids is even more challenging — especially when even you don’t always have control of your finances.
But teaching kids about money doesn’t have to be complicated. If you show them the importance of saving and budgeting at an early age, they’ll hopefully grow up into smart Penny Hoarders.
The Wall Street Journal recently profiled one couple who’ve already started their kindergartener’s financial education. The Yeagers live in suburban Georgia and have a 6-year-old son named Kellan and a 3-year-old daughter named Riley.
How the Yeagers Are Teaching Their Kids to Budget
Kellan started showing an interest in how much items cost over the summer, so the Yeagers “decided it was time to start an allowance system at home to help [him] better understand the value of money,” the WSJ reports.
They came up with a clever solution — one very similar to the budgeting jars method endorsed by personal finance experts like T. Harv Ekers.
They labeled three jars with “Spend,” “Save” and “Give.” Each Sunday, the Yeagers give Kellan four quarters: two go in the Spend jar, while the other jars each get one.
“It seemed like a logical budgeting pattern,” Ms. Yeager told the WSJ. “We wanted him to really understand that all of your money isn’t to be spent.”
Smart, right? Not only are they teaching Kellan about saving, they’re also demonstrating the importance of giving back. (Kellan hopes to eventually donate the coins in his “Give” jar to a pet shelter.)
You may be wondering if Kellan’s allowance is tied to chores — it’s not.
“He already understands that if you’re part of this family, there are things we expect you to do,” Ms. Yeager told the WSJ. Things that aren’t tied to money or “external reward[s].”
To assign chores, the Yeagers have another unique method: popsicle sticks. They write out different chores on each stick, and every week, Kellan picks two — without seeing what they are. His sister Riley picks one.
“Letting Kellan choose the jobs helps him feel (like) he’s in the driver’s seat … and changing them up each week keeps things interesting,” the article says.
Raising kids is far from simple — but with a little creativity, teaching them to be responsible with money doesn’t have to be as difficult as may seem.
We covered the article’s salient points in this post, but WSJ subscribers can access the full story here.
Your Turn: Do you believe in allowances? What do you think of the jar system?
Susan Shain, senior writer for The Penny Hoarder, is always seeking adventure on a budget. Visit her blog at susanshain.com, or say hi on Twitter @susan_shain.