Water Cooler Talk: Teaching Your Kids About Money
October 24, 2019

Brought to you by Heritage Financial Consultants, LLC, Published in the Baltimore Business Journal

Written by Kathy Armstrong

Young parents often ask me how to teach their kids about money. As a CERTIFIED FINANCIAL PLANNER™ practitioner who raised three kids of my 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 will 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 quarter in the Share jar (which the parents might even match).

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 as well as 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, I have confidence that all three of my adult children are fiscally responsible and are providing this same training to their own kids. In fact, today I work alongside my daughter, Elizabeth Paal Goss (also a CERTIFIED FINANCIAL PLANNER™ practitioner), in our intergenerational financial planning practice.  During Financial Planning Awareness Month, I encourage you to teach your children the THREE JAR approach and emphasize the importance of being proactive about financial planning.

Katherine Bays Armstrong 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.  Heritage Financial Consultants, LLC is not an affiliate of Lincoln Financial Advisors Corp.