I have been thinking about how I can help this little person that I co-created understand the value of money. Yes – he is only 2 years old, he will be 5 years soon. This is important to me because if he can learn good money habits sooner it will set him up for success as an adult. My dad, drilled accountability for every single cent into my brothers and I for which I am grateful. If you have kids am sure you feel the same way. Here’s a great idea that you can put into practice right away.
The 3 Piggy Bank Tip
If your children earn a commission when on top of their chores or an allowance, teach them the habit of The 3 Piggy Banks or envelopes. (Note: For your teenagers. Just swap out the piggy banks for envelopes, or open a savings account and track their spending with them.)
Instead of letting the kids spend all of their commission or allowance, have them put a portion of their earnings into each of the three different piggy banks.
- I recommend labeling them as (1) Giving, (2) Savings, and (3) Spending.
- If you have younger children, have fun with the piggy banks and make it more memorable by turning it into a craft. For boys, treasure boxes is also a great choice.
Every family will vary on how much goes into each bank. I like the 10/10/80 breakdown:
- 10% to savings
- 10% to giving
- 80% to spending
Developing this habit will set kids up for financial independence later in life. Though for charity my dad contributed on our behalf I believe to cultivate intentional stewardship in our children is important.
I’d love to hear what you are doing to help teach your children about money. Please share in the comment section below!