Junior Money Masters - Using Jars to Teach Kids How to Save

4/18/2019 Brooke Thomas

Developing healthy financial habits at a young age is essential in giving your kids the skills they need in order to manage their money responsibly as adults. By the age of seven, many kids have already formed their financial habits. So how can you teach your kids about saving in a way they will truly grasp and understand, especially at a young age? Our very own Jay Cook, Senior VP Commercial Lender, and his wife Leeann share some financial advice they gave to their kids using three jars that taught them how to become financially savvy as adults.

The Cook family taught their kids at an early age the concepts of saving, spending and giving using three jars. Eli, their son said, “When [they] broke up our allowances into savings, charity, and spending money it was pretty impressionable.” This is a really simple concept that will go a long way with your kids. Here’s how it works:

  1. Make three jars and label them “savings”, “spending” and “charity.”
  2. When your child earns money or receives money for birthdays, graduations, etc., divide it among the jars.

Jay and Leeann put an emphasis on the “savings” jar with their kids. This helped teach them to be prepared for unexpected financial emergencies and the importance of investing in their future. Said by their daughter, Caley, “The bucket system taught me to save, save, save. I remember wanting to spend my holiday and birthday money the moment I got it, but you always took the check and deposited it into savings. I didn't realize the importance of saving the money until I was in high school, when I wanted to go on international trips.”

You may be surprised by how much financial responsibility even young children gain from this. They learn to become disciplined in their purchasing habits and gain understanding in how and why to build up their savings. They also develop a deeper knowledge of the needs in their community and what causes they find most important. Caley also said, “…the three bucket system taught me a few different lessons. I learned that money was to be used for a variety of items and not for just things that I wanted in the heat of the moment. It also instilled in me a characterization of good citizenship; donating money to charity.”

Especially while your child is young, start using the three jar concept with them and you will see them develop the skills they need to become financially responsible. Once your child begins nearing adulthood, these concepts will be ingrained in their everyday habits. As they approach major life expenses such as purchasing a vehicle or college, they will have the financial confidence and understanding to make wise decisions with their money. Want more ways to teach your kids about saving? Here are more tips you can use today to help your kids understand the importance of saving.



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