Young parents often ask me how to teach their kids about money. As a CERTIFIED FINANCIAL PLANNER™ professional who is starting a family of their own, I fully understand the importance of that question. I recommend the three jar approach. It’s a simple, creative and fun project to teach kids about money. Here’s how it works. Give each child three jars, labeled “spend,” “save” and “share.” When they receive money from allowances, chores or gifts, they deposit money into the jars in a predetermined manner. For example, if Tommy receives a $1 allowance, he might put two quarters in the “spend” jar, one quarter in the “save” jar and one in the “share” jar. The concept behind this method is to teach your children to use their money wisely, spending some for items they’d like to buy, saving some for a large future purchase and sharing some with those who are less fortunate. The three jar approach not only teaches fiscal responsibility and philanthropy/compassion, but also basic math skills and resource prioritization. The lessons that children learn from this activity will contribute to a strong foundation of financial knowledge and instincts as they become adults. In my case, my mother taught us to be fiscally responsible and I plan to provide that same concept with my children. Especially during this period of economic instability, I encourage you to teach your children the three jar approach and emphasize the importance of being proactive about financial planning.
Elizabeth Paal Goss is a Registered Representative of Lincoln Financial Advisors. Securities and investment advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. 307 International Circle, Suite 390, Hunt Valley, MD 21030.Heritage Financial Consultants, LLC is not an affiliate of Lincoln Financial Advisors Corp. CRN-3098153-052220