Welcome back, Scott Arnold, CFP ® to conclude his 2-part blog on using the Three Jars method to help teach his young boys life and money lessons.
When my wife and I started The Three Jars with our boys, we thought it would help us in teaching them basic lessons about money. The Jars have done this and much more. Here are some of the main lessons and benefits.
Splitting your paycheck into various accounts before you spend it.
Imagine if all of us learned the valuable lesson of paying yourself (savings) and supporting your passion (giving) first. We are all creatures of habit, whether your 6 years old or 30 years old, if you pay yourself first, you will adapt to your cash flow and be able to build up your investment accounts to reach your goals.
It used to be frustrating to take the boys to the store because every aisle was a battle. Now the conversation has flipped into a learning opportunity. We let them know they can buy the item they want but it will come out of their money. If they spend more than what is in the “Spend” Jar for the month then they will lose interest for the month. We also remind them of the previous goals they set for themselves and how this impulse purchase will make it take even longer before they can reach their goal. Their current goals are an electric ATV and a hover board! It is amazing how they stop asking for that candy bar in the check-out lane when they know it would come from their money.
After the boys realized the money in the jars is theirs, they became very focused on counting it correctly. They even like to pull out the jars from time to time to count the money again. We were amazed at how quickly they understood the concept of interest and how to calculate it. Our 6-year-old correctly calculated 5% interest on his $230 savings this past Sunday.
Time is such a valuable commodity nowadays with work, school, Cub Scouts and soccer pulling us in different directions. It is nice to sit down with the entire family on Sunday to play The Three Jars. The Q&A before we pay them and the paying/counting of the money leads to great discussions and learning opportunities with the whole family. In our busy worlds it’s nice to get everyone together and focused for 30 minutes.
The Three Jars has helped us develop a weekly system to talk to our children about the value of money, spending, saving, giving and incorporating family time as well. We hope The Three Jars will do the same for your family, it is a great tool to have more money and life conversations with your children.
Scott Arnold, CFP®, has been in the financial services industry since 1998. He is the founder of IMPACTfolio. A wealth management firm that specializes in sustainable and IMPACT investing. For more information, visit https://impactfolio.co/