Teach Kids Money with Three Jars: Save, Spend, Share Guide

Teach Kids Money – Ever found yourself fumbling for words when your child asks for an expensive toy, or wonders where money comes from? You’re not alone. Many parents want to give their children a head start in understanding finances, and the Three Jars System for kids is a wonderfully simple yet powerful way to do just that. This method helps instill crucial money management skills from an early age, paving the way for a confident financial future.

Imagine young Lily, who used to want every colorful candy bar at the checkout. After her parents introduced the Three Jars, she started to pause, think, and even say, “I’ll save my spending money for that bigger art set I want!” This shift didn’t happen overnight, but it started with three simple containers.

“If we don’t teach our children about money, someone else will – and perhaps not in the way we’d like.” – A common sentiment echoing Dave Ramsey’s wisdom.

What Exactly is the “Three Jars” System?

The Three Jars system is a visual and hands-on approach to teaching children about money management. It involves dividing any money your child receives (like allowance, birthday gifts, or payment for chores) into three distinct jars, each with a specific purpose:

• The SAVE Jar: This is for future goals, often bigger items that require patience and consistent saving.
• The SPEND Jar: This jar is for immediate wants and small, everyday purchases, teaching decision-making within a budget.
• The SHARE (or GIVE) Jar: This portion is set aside for helping others, fostering empathy and generosity.

The core benefit of this method is its simplicity. It transforms abstract financial concepts into tangible actions. Children physically see their money grow in different categories, learning about planning, prioritizing, the power of saving, the joy of giving, and the reality of spending limits. It’s not just about numbers; it’s about building foundational values and healthy financial habits.

“Teaching kids about money isn’t just about the math, it’s about shaping their values and habits for life.” – Inspired by Robert Kiyosaki’s principles.

Picture three clear jars on a shelf, each labeled. When your child receives money, they actively decide how to allocate it. This simple act is a profound learning experience.

Why Can Teaching Kids About Money Feel So Challenging?

Many parents acknowledge the importance of financial education but face hurdles. Understanding these challenges is the first step to overcoming them:

• Knowing Where to Start: The world of finance can seem complex, and parents might feel unequipped to simplify it for young minds.
• Children’s Impatience: Kids often live in the “now” and want immediate gratification, making concepts like saving for the future difficult to grasp.
• External Pressures: Constant advertising and peer influence can lead to frequent demands for the latest toys or gadgets.
• Parental Misconceptions: Some believe children are too young to understand money, or that discussing finances is too “materialistic.” However, early lessons are about values, not just wealth.
• Lack of Visual Tools: Abstract concepts like budgeting are hard for kids. The Three Jars system directly addresses this by making money management visible and interactive.

For instance, Sarah, a mother of a 7-year-old, shared, “My son sees a new toy commercial and instantly wants it, even though his room is full. Explaining ‘we can’t afford it’ or ‘you don’t need it’ often leads to frustration. I needed a better way.” The Three Jars system can provide that “better way.”

“The biggest challenge isn’t teaching children how to make money, but teaching them how to manage and value it.” – A common observation among family finance experts.

Unpacking the Roots: Why Do These Challenges Persist?

The difficulties in teaching kids about money often stem from deeper societal and personal factors:

• Delayed Financial Education: Many of us didn’t receive formal or informal financial education early in life, either at home or school. We might be learning as we go, making it harder to teach.
• Parental Role Modeling: Children are keen observers. If they see parents spending impulsively, arguing about money, or expressing anxiety about finances, they absorb these attitudes and behaviors. Conversely, positive financial role modeling is incredibly powerful.
• The Influence of Consumer Culture: We live in a society that often glorifies spending and instant gratification over saving and mindful consumption.
• Learning by Imitation: Kids primarily learn by watching and doing. Without clear, positive examples of money management, it’s hard for them to develop good habits.
• The Abstract Nature of Money: For young children, money can be a confusing concept. Coins and notes might just seem like playthings until their value and purpose are made concrete through practical experience.

Think about it: if a child only sees money being swiped via a card or tapped on a phone, they miss the tangible connection to its value. The physical act of handling cash and putting it into jars makes a huge difference.

“Habits are formed from small, repeated actions. Financial habits are no different.” – Echoing Jim Rohn’s philosophy on habit formation.

The “Three Jars” System in Action: Your Practical Guide to Teaching Kids Money

Ready to empower your child with financial wisdom? Here’s how to set up and use the Three Jars system effectively. This method is adaptable for various ages, from preschoolers to pre-teens.

1. Getting Started: Setting Up Your Jars

• Choose Your Jars: You’ll need three containers. Clear glass jars are great because kids can see the money accumulate. Plastic containers, decorated shoeboxes, or even envelopes work too. Get creative and involve your child in choosing or decorating them – this builds ownership!
• Label Clearly: Label each jar: SAVE, SPEND, and SHARE. You can add pictures or symbols for younger children who can’t read yet.
• Placement: Keep the jars in a visible and accessible place for your child, but also safe.

2. Filling the Jars: The How-To of Money Allocation

• Discuss Percentages: Agree on how money will be divided. There’s no magic formula, but a common starting point is:
  • SAVE: 40-50%
  • SPEND: 40-50%
  • SHARE: 10-20%

  Adjust these percentages based on your family values, the child’s age, and their current goals. The key is consistency.

• Sources of Income: This money can come from a regular allowance, gifts for birthdays or holidays, or payment for age-appropriate chores (if your family chooses this approach).
• The Ritual of Division: When your child receives money, make it a regular ritual to sit down together and divide it into the jars. Encourage them to do the math and physically put the money in each jar. This hands-on involvement is crucial.
• Global Perspective: While the specific amounts of allowance or the cost of desired items will vary greatly across cultures and families, the core principles of planning for the future (Save), making thoughtful choices about current desires (Spend), and considering others (Share) are universally valuable lessons.

3. The SPEND Jar: Learning to Make Choices and Budget

Purpose: This jar teaches children about managing money for their short-term wants, making purchasing decisions, and understanding that resources are finite.

• What it’s for: Small toys, stickers, candy, a comic book, a movie ticket, or contributions towards a slightly larger desired item that doesn’t require long-term saving.
• How it works: When your child wants to buy something that falls into this category, they use the money from their SPEND jar. This is their money to control (within agreed-upon boundaries, of course – e.g., no inappropriate items).
• Practical Steps & Learning:
  • Allow them to make mistakes (e.g., spending it all on something flimsy they regret). These are valuable lessons in a low-stakes environment.
  • Discuss choices: “If you buy this now, you won’t have enough for that other thing you wanted next week. Which is more important to you?”
• Real-Life Example: Young Tom gets $5 a week. He puts $2 in SPEND. After two weeks, he has $4. He can choose to buy a small action figure for $3.50 now, or wait another week to afford a slightly better one he saw for $5.
  • Immediate Action: Tom decides whether to buy the $3.50 figure.
  • Long-Term Outcome: Tom learns to weigh his options, delay gratification for a slightly better reward (or learns the consequence of impulsive buys), and begins to understand budgeting for discretionary spending. He’ll be better equipped to manage his day-to-day expenses as a young adult.

4. The SAVE Jar: Building Dreams, Patience, and Goal-Setting Skills

Purpose: This jar is all about teaching the power of delayed gratification, the importance of setting goals, and the rewarding feeling of achieving something significant through consistent effort.

• What it’s for: A more expensive toy (like a LEGO set or a video game), a bike, a special outing, contributing to a family vacation, or even first steps towards saving for something bigger in the distant future like a class trip.
• How it works: Money in this jar is generally not touched until the pre-defined savings goal is met.
• Practical Steps & Learning:
  • Help your child set a clear, achievable goal for their SAVE jar. Write it down or draw a picture of it and stick it on or near the jar for motivation.
  • Regularly count the money together and discuss how much closer they are to their goal.
  • Parental Matching (Optional Boost): Consider offering a “matching contribution” or a small “interest bonus” when they reach certain milestones or their final goal. For example, “For every $5 you save towards your bike, I’ll add $1.” This introduces the concept of earning returns on savings.
• Real-Life Example: Maria wants a new scooter that costs $50. She allocates $2.50 of her weekly $5 allowance to her SAVE jar.
  • Immediate Action: Maria consistently puts $2.50 into her SAVE jar each week. Her parents help her track her progress on a chart. They’ve offered to contribute the last $10 if she saves $40.
  • Long-Term Outcome: Maria learns patience, discipline, and the pride of achieving a significant goal. This experience builds her confidence and teaches her that big things are attainable through consistent effort. As an adult, she’ll be more likely to save for major purchases like a car, a down payment on a house, or retirement.

5. The SHARE Jar: Cultivating Compassion, Generosity, and a Sense of Community

Purpose: This jar teaches children that money can also be a tool to help others and make a positive impact on the world. It fosters empathy, gratitude, and a sense of social responsibility.

• What it’s for: Donating to a favorite charity (animal shelter, children’s hospital), buying a small gift for a friend in need, contributing to a local food bank, or supporting a community project.
• How it works: Once the SHARE jar accumulates a reasonable amount, the child (with parental guidance) decides where or to whom this money will go.
• Practical Steps & Learning:
  • Discuss different ways to help others. Research local charities or causes together.
  • Make the act of giving a positive experience. If possible, involve the child in the donation process (e.g., visiting the animal shelter, mailing the check).
  • Talk about how their contribution, no matter how small, can make a difference.
• Real-Life Example: David puts $0.50 from his weekly $5 allowance into his SHARE jar. After a few months, he has $10.
  • Immediate Action: David’s family discusses options. He loves animals, so they decide to donate his $10 to a local animal rescue. They look at the rescue’s website to see what the money could be used for (e.g., food, blankets). David feels proud helping the animals.
  • Long-Term Outcome: David develops empathy and understands the joy of giving. He learns that money has a purpose beyond personal consumption. This can lead to a lifelong habit of philanthropy and community involvement, contributing to his overall financial wellness and sense of purpose.

6. Keeping the Habit Alive: Consistency is Key for the Three Jars System

The Three Jars system isn’t a one-time lesson; it’s an ongoing practice.

• Talk About It Regularly: Don’t just set up the jars and forget them. Make money discussions a normal, positive part of family life. Review the jars weekly or bi-weekly.
• Adapt as They Grow: As your child gets older, the amounts, percentages, and goals will change. A teenager might use a digital version of the three jars or have more complex saving goals. The principles, however, remain the same.
• Celebrate Milestones: Acknowledge their efforts and successes, whether it’s reaching a savings goal or making a thoughtful spending decision. Positive reinforcement goes a long way.
• Be a Role Model: Children learn by watching you. Let them see you making conscious decisions about your own saving, spending, and sharing.

“The habits your children develop around money today will profoundly shape their financial freedom tomorrow.”

Conclusion: More Than Just Jars – It’s a Foundation for Life

The Three Jars system (Save, Spend, Share) is far more than just a cute way to manage allowance. It’s a practical, engaging method for teaching children fundamental life skills: planning, decision-making, patience, goal-setting, and compassion. By starting these lessons early, even with small amounts of money, you’re laying a robust foundation for their future financial well-being and confidence.

This isn’t about raising little accountants; it’s about raising responsible, thoughtful, and empowered individuals who understand that money is a tool to achieve their goals and contribute positively to the world. The journey of teaching your child about money is also a wonderful opportunity for connection and shared learning within the family.

“An investment in knowledge pays the best interest.” – Benjamin Franklin. This applies perfectly to investing time in your child’s financial education.

Imagine the pride your child will feel when they buy that coveted item with their own saved money, or the quiet joy they experience when their SHARE jar helps someone in need. These are the priceless lessons that build not just financial literacy, but also character.

Ready to Start? Your Call to Action:

• Take the First Step: Sometime this week, find three jars (or boxes, or envelopes!) and sit down with your child to introduce this simple system. Make it fun!
• Share the Knowledge: If you found this guide helpful, please share it with other parents who might benefit from teaching their kids about money with the Three Jars.
• Join the Conversation: How do you teach your children about money? Have you tried the Three Jars system? Share your experiences and tips in the comments below! We’d love to hear from you.