How to teach kids about money — The Organized Mom Life

Even though my daughters are still very young (5 and 3), I believe that it’s important to start teaching them how to handle money now.

It’s such an important skill to have in life, and it’s worth putting in the effort to teach them how to be responsible with their money early on.

How to teach your kids about money: How to use an allowance and a three part bank to teach your preschooler or elementary child how to save their money. The bank system includes a spend jar, a save jar, and a give jar.

Here’s what we’re doing so far:

The 3 Part Banks

My husband, Kevin, built these amazing banks for our girls. There are 3 jars in each: One for giving, one for spending, and one for saving.

I’ll get into more detail about each jar in a sec, but if you want to build your own kids bank, click here for a step-by-step tutorial.

How we do allowance

We give the girls 3 coins (or the equivalent) every week: 2 quarters and 1 dime or nickel. The quarters are for the spend and save jars, and the dime/nickel is for the give jar.

Extra money

Anytime the girls get money, they put it into their banks. It doesn’t matter where the money came from.

They usually get some birthday money, and occasionally we will help them sell toys that they have outgrown on Facebook marketplace. The money that they earn from that goes right into their banks.

Chores and money

Update: As our kids got a little older, we started using chore charts to keep track of their chores and the money that they earn- aka their allowances.

Click here for our free chore chart template and to see how our chore system works.

Jar 1: Giving

We believe in giving away at least 10% of our money, and we want to teach our kids to be generous with their money, as well.

Our goal is for this jar to be empty most of the time, but… we always seem to forget to bring the coins along for the church offering. Oops.

My solution is that Emma and I will count up all her give coins at some point. I’ll let her pick a cause, and we’ll donate that money to something that will help others.

Jar 2: Spending

The second jar is for spending. The girls are free to spend this money on anything they want.

They often bring these coins along in their little purses when we are taking a trip to the dollar store, or going to a yard sale. There isn’t a whole lot of planning ahead involved with the spending of this money. 🙂

Jar 3: Saving

The save jar is to teach the kids how to save up for something specific. We took a trip to Target, and each girl chose one (more expensive) toy that they wanted to buy.

I took a picture of their choices, and printed them out on a piece of paper that they keep underneath the save jar in their banks. I wrote the price on the paper, so that they can add up their money and know when they have enough to make their big purchase.