Here is an excerpt from Kathy Armstrong’s appearance in Thrive Global Magazine. She offered insight and her own personal experiences on the approach to teaching children financial literacy as one of the five non-intuitive essentials for smart investing.
When asked what advice she would offer to her own adult child about smart investing, Kathy explained a very simple way to teach children important lessons and the approach to being fiscally-responsible.
Kathy Armstrong: Teach your kids financial literacy. 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 deposit money into the jars in a predetermined way. 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 the items they’d like to buy, saving some for large future purchases, 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.
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*Kathy Armstrong is a Financial Planner with Heritage Financial Consultants, offering comprehensive financial planning services through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC) and registered investment advisor. Heritage Financial Consultants LLC is not an affiliate of Lincoln Financial Advisors. CRN-3052201–042120