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TEACHING KIDS TO BALANCE SPENDING AND SAVING WITH A DIVIDED PIGGY BANK

Teaching your child early to set aside part of every dollar for savings will pay them dividends for the rest of their life. By using a divided piggy bank system, the child will develop the saving habit at an early age. Charity also begins at home. Choose a three-part system if you want to have them set aside money for those in need while they divide money for saving and spending.

WHERE TO GET A DIVIDED PIGGY BANK
So, I saw this great widget: it was a money system for kids with different places to put their money: "Save, Spend, and Share." The "toy" had won numerous awards! So I thought I'd shell out some money to buy a cheap plastic/waxed cardboard thingy in order to teach my children the value of money
OK, maybe not such a great idea when I put it that way
How about the made-in-china divided piggy bank? No?

Oh wait, how about I frugally have the children help me make a divided-bank system for themselves. Kids love crafts, and that way they have a chance to really invest some effort and thought into the process.
Basically, you will need three containers (I used 14 oz. yogurt tubs with lids, but margarine tubs would also be great.)
Then have the child label and decorate each one with "Share", "Save", and "Spend."
Have them draw pictures on the container about what each term means to them.
Cut slits in the top to put them money in.

Tada! Pat yourself on the back for saving the cost plus shipping and handling charges for that award-winning "toy."

DETERMINING THE ALLOWANCE
How much allowance a child receives depends on their age and spending habits, but for this system to work best, give them an allowance that is easily divisible by 3. (Cut them some slackthey're kids!) Have them deposit one third into each container when they get their allowance.

They get to pick how they wasteer"spend" the money in the "Spend" container.

Discuss with them a goal to "Save" for, and come up with an agreed-upon goal.

The "Share" money should go into the collection plate every week, or should be put in an envelope and mailed off to the charity of their choice at least once a month (if it's already been "shared", there's less of a temptation to "borrow" from the "Share" container.) If your place of worship has envelopes, use them so your child will get a receipt at the end of the year. Seeing how much they've shared will make them feel good about themselves and may encourage them to share more. If you mail it off to a charity of their choice every month, keep track for them, and tell them in January how much they donated.

Don't keep track of their spendingask them if they can remember what they spent it on later. That will be another learning experience.

Learn more about this author, Vicky Harper.
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