Four Jar Allowance Method - Time To Teach Your Kids How To Be Financially Independent
Four jar allowance method
Have you heard of four jar allowance method? It's one of the most innovative ways to teach your children the significance of money management and the secret tricks of savings. As per this four jar allowance method, you should ask your children to gather their money in four see through glass jars and instruct them to spend those money in a planned way. To make them realize the importance of hard earned money, you have to play tricky. Read on the four steps, which can lead your children towards financial independence. Make sure during this you must act not only as a responsible father but also as a perfect financial manager. You must pay your bills right on time and set an perfect example to your kids.
How it works
Set four jars named as alms-giving, the spend-as-you-wish, small time savings and big time savings and present it to your kid.
Alms-giving strategy
Kids simply love the concept of charity. So, you don't have to try hard to make them understand it is good to help others and they should donate at least 10% of their weekly allowance to the deprived people. However, as a guardian, you must look after the disbursal of these charity funds, because after all your kids are naive and can easily be cheated in this charity business.
Quick Cash can
Quick cash can is there to give your children the full liberty to spend on anything they like to. This is actually the best place to determine whether your children are financially responsible or not. However, better put some restrictions on buying excessive comic books, junk foods or bubble gums otherwise they will end up hurting themselves. Your aim should be to check whether they are using or misusing their freedom, while things are unobjectionable.
Small time saving jar
Small time saving jar is the best tool to teach you children the value of patience and sacrifice. If he insists on buying anything expensive, ask him to save for it for a couple of weeks and if required, couple of months. Keep in mind this generation is used to instant gratification therefore it's better to make them wait to teach them the value of patience and efforts.
Long-Term Savings
Long term savings are the ultimate patience checker. Your kid should not spend the money in this jar for at least a year. It's true that initially, this will frustrate him, but down the line he will be happy. Gradually saving money will be developed as a habit and one day the glass jar will turn into a bank account and who knows soon the bank account might turn to some bigger investment schemes as well.
Trust me, once your child becomes old enough to ask for toys or candy, it means he is old enough now to gain some financial knowledge as well. Therefore, as soon as they learn to count, you can start teaching them about the concept of money management by using dollars and pennies. Actually, the sooner they learn to be responsible, it is better for their future financial freedom.
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