Here is a simple way to practice saving we learned from practicing with our daughter.
Here is how it works with a young child.
1) Put three clear ½ pint jars on his/her dresser.
2) Label 1: Save, 2: Spend 3: Give.
3) Now pay her a monthly allowance. A suggestion I’ve widely seen is $1.00 x their age per week. When she was 5 we started this practice by giving her $20.00 a month in loonies and toonies. She had the responsibility to pick one item to save towards (at 5 ...years old this was a Tinkerbell doll for $19.95).
4) With her $20.00 in hand she divided the amounts between the 3 jars.
At first, all her money went into spending and believe me it was spent very quickly. After a few weeks though, when we asked how much she had saved towards her doll she started to listen to our suggestion to put some money into savings and giving. I think it took us only 3 months for her to acquire that first doll. At the store she paid the attendant for the item and walked out proud as a peacock. The next few weeks she was putting more and more aside to save for items then before. She also has learned that the smile on the faces of the people you give money to for charity is a reward in its own.
Now that she is 10, we do it a little differently.
1) She has a notebook with 4 columns: 1 Save, 2 Spend, 3 Give 4 Balance.
2) She receives $40.00 a month allowance. This time NOT in cash.
3) On paper, practicing her grade 4 math skills we work out splitting the monies between Save/Give/Spend. If money is put on paper into savings – she adds that to her working balance of Savings (fourth column).
4) We transfer the money out of our bank account into a savings account that we opened when we began her RESP.
5) The money she chooses to give and spend is given to her in cash and we donate the one and she has charge of the other.
This year, because she knows that savings work – she has chosen to save for a larger $200.00 item. She also picked between 5 charities and choose to give her money to a local father to help him pay for his cancer treatment (she doesn’t want his child to lose a daddy). She does not have a DEBIT card. All amounts are cash only.
Get it? Sorta?
One jar Save, one jar Give, one jar Spend.
Now, for us grownups who love our debit cards. Here’s the deal: you NEED to see your savings grow.
1) Set 3 glass 1L jars on your bedroom dresser. Label Spend, Give, Save.
2) Pay yourself a small weekly practice allowance (even if it is $10.00/40bucks a month! do it! We do $20.00 a week) Get the money in small bills and coin (5’s, Twoonies and Loonies).
3) Divide your money. Put the lids on and practice taking only from the jar for that activity. You want a Timmies’ coffee – pull from spend. You would like to donate 3 cans of food the local food bank, buy three cans and donate. You CANNOT switch money from any jar to the other until the end of the month.
At the end of the month her are the ADULT options -->
A) Savings:
i) Put Savings in the bank into a separate Savings account.
ii) Leave Savings and continue to build it in the jar.
iii) Spend Savings because you have reached your goal.
B) Spending monies left over: Automatically put these into Savings.
C) Giving money left over - continue to build this jar or donate immediatly
D) Put your new month’s money divided between the three jars.
This system is not your savings for a new car, or 10% you pay yourself from each check. This is visual practice with smaller amounts for miscellaneous items bought weekly. I spend mine on tea, a sub lunch, lip balm etc. My savings this month are for a badly needed highlight job (Shh.... I’m a real blonde - as the roots grow out it encourages me to save more.)
Try it. We’ve practiced this for years and although it has been one step forward and two back sometimes. We can see when we are improving and we defiantly are happy with the money-tips we are teaching our daughter.
Let me know what you think. Who’s going to try it this month?
Here is how it works with a young child.
1) Put three clear ½ pint jars on his/her dresser.
2) Label 1: Save, 2: Spend 3: Give.
3) Now pay her a monthly allowance. A suggestion I’ve widely seen is $1.00 x their age per week. When she was 5 we started this practice by giving her $20.00 a month in loonies and toonies. She had the responsibility to pick one item to save towards (at 5 ...years old this was a Tinkerbell doll for $19.95).
4) With her $20.00 in hand she divided the amounts between the 3 jars.
At first, all her money went into spending and believe me it was spent very quickly. After a few weeks though, when we asked how much she had saved towards her doll she started to listen to our suggestion to put some money into savings and giving. I think it took us only 3 months for her to acquire that first doll. At the store she paid the attendant for the item and walked out proud as a peacock. The next few weeks she was putting more and more aside to save for items then before. She also has learned that the smile on the faces of the people you give money to for charity is a reward in its own.
Now that she is 10, we do it a little differently.
1) She has a notebook with 4 columns: 1 Save, 2 Spend, 3 Give 4 Balance.
2) She receives $40.00 a month allowance. This time NOT in cash.
3) On paper, practicing her grade 4 math skills we work out splitting the monies between Save/Give/Spend. If money is put on paper into savings – she adds that to her working balance of Savings (fourth column).
4) We transfer the money out of our bank account into a savings account that we opened when we began her RESP.
5) The money she chooses to give and spend is given to her in cash and we donate the one and she has charge of the other.
This year, because she knows that savings work – she has chosen to save for a larger $200.00 item. She also picked between 5 charities and choose to give her money to a local father to help him pay for his cancer treatment (she doesn’t want his child to lose a daddy). She does not have a DEBIT card. All amounts are cash only.
Get it? Sorta?
One jar Save, one jar Give, one jar Spend.
Now, for us grownups who love our debit cards. Here’s the deal: you NEED to see your savings grow.
1) Set 3 glass 1L jars on your bedroom dresser. Label Spend, Give, Save.
2) Pay yourself a small weekly practice allowance (even if it is $10.00/40bucks a month! do it! We do $20.00 a week) Get the money in small bills and coin (5’s, Twoonies and Loonies).
3) Divide your money. Put the lids on and practice taking only from the jar for that activity. You want a Timmies’ coffee – pull from spend. You would like to donate 3 cans of food the local food bank, buy three cans and donate. You CANNOT switch money from any jar to the other until the end of the month.
At the end of the month her are the ADULT options -->
A) Savings:
i) Put Savings in the bank into a separate Savings account.
ii) Leave Savings and continue to build it in the jar.
iii) Spend Savings because you have reached your goal.
B) Spending monies left over: Automatically put these into Savings.
C) Giving money left over - continue to build this jar or donate immediatly
D) Put your new month’s money divided between the three jars.
This system is not your savings for a new car, or 10% you pay yourself from each check. This is visual practice with smaller amounts for miscellaneous items bought weekly. I spend mine on tea, a sub lunch, lip balm etc. My savings this month are for a badly needed highlight job (Shh.... I’m a real blonde - as the roots grow out it encourages me to save more.)
Try it. We’ve practiced this for years and although it has been one step forward and two back sometimes. We can see when we are improving and we defiantly are happy with the money-tips we are teaching our daughter.
Let me know what you think. Who’s going to try it this month?
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