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One of my fondest memories was when I was in primary school and my dad took my brother and me to open bank accounts at the bank. I got the Tasmanian Devil on my bank card and I felt so grown up. I had a PIN code and everything!
Opening a bank account is a great idea, but to really teach your kids the value of money and how to manage it is a bit easier when it’s hands on and they can see their money coming in and out.
Also read: 13 money lessons that will set your child up for life
Allowance
Firstly, giving your kids an allowance is a great idea. Now some people believe that kids should earn their allowance by doing chores. Others think that chores are the responsibility of everyone who lives in the house and shouldn’t be rewarded by money.
Whatever camp you fall in the bottom line is the same: an allowance is a great way to teach your kids about personal finance.
Read: Ever wondered what pocket money adds up to?
The Jar System
The Jar System is a simple one. Each of your kids will have 3 jars and they will divide their money among them. Having a jar system means that your kids have a visual representation of their money coming in and going out.
Spend: money that can be spent however they want.
Save: money that they’re saving towards something they want.
Donate: money to give to a charity of their choice.
Let’s take a closer look at each jar.
The Spend Jar
The money that goes in the spend jar is for well, spending. If they want something that costs more than the amount in the Spend jar, you can explain that they can either save toward it or buy something cheaper. The spend jar can also be used at the school tuck shop.
The Save Jar
Teaching your kids to save from a young age is so important. If this becomes a habit at a young age, it will stand them well later in life when they are earning their own money.
The save jar is one that has to have a goal. So if your kid wants that R150 Lego set, then write the amount on the front and a portion of their allowance goes in there.
Saving toward something also teaches your child about the value of their belongings. So they’ll think twice before flinging rather expensive toys across the room with reckless abandon.
The Donate Jar
The donate jar is a good way to introduce your child to the concept of helping others and encouraging our children to give to those in need. It’s important to teach our kids that we are part of a larger community and that we should help out the less fortunate.
When is the best time to start?
The younger, the better! But your child should be able to understand the basic principles of addition and subtraction, so at around the age of 6 or 7 would be ideal. Of course if you child is able to understand these concepts at a younger age and you feel this could benefit them, then go for it!
Do you give your children pocket money? Do you help them decide what they should use their money for? How do you encourage them to save? En do you instil a sense of giving in them? Please share your ideas with us! Mail chatback@parent24.com and we may publish them.
