How to Teach Your Child to Save Using the Spend, Save, & Give Plan

Learning how to budget your money is such an important life skill. If we teach our children while they are young, it is much more likely to become a habit they will carry with them into adulthood. Kids learn better when they are “doing,” rather than just learning a theoretical concept. In this post, I will cover how to teach your children to budget using a basic three jar system.

To teach your child the importance of budgeting, you can start with explaining the concept of splitting the money you earn into three piles. One for your spending, one for your savings and one for giving. Let’s break down each Jar!

Spend Jar:

The spend jar is where your child can allocate a percentage of their money to “spend”. It is the same concept of paying yourself first. If your child is little this could be money used for the ice-cream truck, if your children are teenagers like mine it will be money used for gas, fast food and the movies! How much should go in this jar is a discussion you can have together. Some talking points are, how is this money different from the money you save for a big purchase? How will it impact your ability to save for that? To give to those who need it? I would recommend no more than 20% be allocated here.

Save Jar:

The save jar is where your child saves for a big purchase item or puts money away in their “Rainy day” fund. Ask your child how quickly they want to make this purchase. How long will it take if they allocate “x” percentage to this jar? Do they need to add more? They don’t need to have purchase in mind, putting away money so they have it when that need arises is also a great feeling! I would recommend 50-60% be allocated here.

Give Jar:

The give jar is where they will save money to donate to a person and or charity in need. This is a great opportunity to talk to your children about what they are passionate about, what they have and how it feels to be able to help someone out. While this is a harder one for kids to visualize the impact it will have is the greatest! 10-30% is a good goal.

This is a great project to work on over the summer with your kids! The basics work for adults too! Maybe you use envelopes instead of jars. Either way, having a plan and a budget is an important tool to learn early!

Let me know if you’d like help with budgeting and tag me (@amycrookshank) in the pictures of the jars and any success stories!