Money Jars: The Kid-Proof System for Saving and Spending Money: Part I

Welcome to Part I of the Money Jar Series. Over the course of this 6-part Series, I’m going to explain the core principles I teach my very own kids about money management. Use of the Money Jars is the basic foundation your kids need to be money smart and achieve financial success.

 

I absolutely LOVE the Money Jars. The system is simple, easy, and fun! There are 6 jobs of money, therefore 6 jars. Today we’ll start with the first jar—The Living Jar.

 

If you haven’t already guessed it, the Living Jar is for Living Expenses. Now you may be saying; my kids don’t have enough money to pay for their living expenses. What am I supposed to do? Start charging them for their share of the utilities, food, and rent?

 

Well, if your kids are under the age of 18, that may be a little harsh and maybe borderline illegal :).  So don’t go off writing up a lease and tagging the food in the refrigerator just yet. However, this IS a good time to sit down with your kids and have a talk about wants versus needs.

 

Let’s be honest. Many of the things our kids want aren’t necessarily what they need. So instead of constantly swiping the bank card for little trinkets, gadgets, and treats here and there, let your child take some responsibility of purchasing some of these things himself.

Make A List

To start using the Living Jar, have your children make a list of all things they like to buy, but can live without. Some examples are:

  • Candy
  • Movie Rentals
  • Video Games
  • Hair Accessories

 

Make An Agreement

Once they’ve completed the list, make an agreement with your kids that from now on, items on that list come out of The Living Jar Money.

 

As a general rule of thumb, 55% of all your kids’ money should be allocated to the Living Jar. So everytime your child receives an allowance, gifts, a paycheck, or revenue from his or her own business, 55% of the money automatically goes towards living expenses.

 

I love this exercise because it teaches kids how to be more responsible with their money. Trust me, once you implement the Living Jar and attach it to the list of expenses, your kids will think twice about every purchase they make. They will seriously consider whether or not they want or need it, and ultimately, if they should buy it.

 

I hope you’ve enjoyed Part I of the Money Jar Series. I look forward to sharing Part II with you soon. Please join the conversation and let me know your thoughts below. Feel free to comment, share, and ask questions.

 

To You and Your Kids’ Wealth,

 

Melanie Jane

 

Related Articles:

Money Jars: The Kid-Proof System for Saving and Spending Money: Part II

Money Jars: The Kid-Proof System for Saving and Spending Money: Part III

Money Jars: The Kid-Proof System for Saving and Spending Money: Part IV

Money Jars: The Kid-Proof System for Saving and Spending Money: Part V

Money Jars: The Kid-Proof System for Saving and Spending Money: Part VI

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