From past articles we discuss saving money as well as starting early, as early as 6 or 7 years of age. But how do you make this really mean something that will stay long term?
The three jar method is tried and true but also should incorporate priorities. The first jar should always be for long term savings. It is recommended that 10% of all money that one brings in should be set aside for really big purchases. 10% is an easy amount to calculate but also is not so large that it hurts. If applied consistently will add up quickly and establishes a discipline which will serve them well. Objectives could be a really big toy they have set their mind on, a vacation camp, or other long term objective like a new bike, school or even a car for older kids. A picture on the jar will help to keep them focused as well.
The second jar should be for medium term purchases they may be working towards which could include a special ball cap, new pair of shoes, movie passes or craft kits for younger children. For older children this could be things like a phone bill, gas for the car or school trips. The amount that should be used here should be about half of what remains or 45% of the money they earn.
The third jar is for immediate purchases or everyday type purchases which may include a treat like a soda or ice cream, lunches, trading cards, or a magazine. This amount would be the remaining funds or 45% of all money they bring in.
By setting up a similar type system you will be teaching them how to control their money instead of letting them be controlled by money. That is what we call being smart.
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