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My husband and I have always agreed on finances – our goals, our spending habits and how and what to save for. I recently read about a study from the University of Cambridge that said that a child’s money habits are mostly formed by age 7! With my son being 5, I realized it was something we shouldn’t be waiting to teach him. These are skills he will need his entire life. We have started to have more conversations with him and even made Spend, Save & Give Jars.
I took the idea of a piggy bank, but expanded a bit to include three seperate jars – one to save, one to spend and one to give. This is a great way to teach the idea of budgeting, which can be a difficult skill.
For a five year old, saving is hard. He wants everything in the here and now! We explained that he didn’t need to know what he was going to buy with his savings or that he might not even spend anytime soon.
Before starting a “Give” jar, make sure your child understands donating and you identify where you will be donating. For example, my son understands his money that we choose to give will go to a fund in honor of another child. He’s familiar with the story, the student from his school and the purpose. It helps for them to understand how this money allocated for donating will help others.
Use the opportunity to discuss responsible spending habits. We discusses saving money, using coupons, not buying impulsively and using credit cards. I was shocked when one day in the store by my son’s comment. He saw something he liked and I told him it was expensive. He then proceeded to tell me to just put it on my credit card, because then I wouldn’t have to give them any money. Since that time, we discussed what a credit card is and that we still do need to pay. In addition, I’ve also tried to make a point to use cash in front of my kids. I want them to see spending in this way versus just swiping a card.
The conversation from this ongoing activity can be a great one. that can stem from this ongoing activity are great. I think it really fosters financial discipline, hard work and patience that is the cornerstone of a healthy financial budget. Remember, it’s never too soon to start developing money skills with kids!