3 Jar System to teach Kids' about Money 2017-11-09
When it comes to teaching our kids' about money management, we seem to fumble and don’t know where to start.
Behavioral economist Dan Ariely, the author of “Predictably Irrational” and new book “Dollars and Sense: How We Misthink Money and How to Spend Smarter” says that he requires his kids to divide their allowances equally among three different containers (3 Jar System) — money for themselves, money for someone they know, and money for someone they don’t know. Ariely is encouraging his children to understand that they do have control over some of their decisions when it comes to money, but there are always trade-offs.
I think that we all agree that trade-offs that have to be made throughout our lives. We as parents are continually doing trade-off, especially now that the christmas season and winter is here. How much should we spend on gifts, how much on kids’ activities (e.g. skiing and snowboarding) and how much can we save for our family winter getaway? The sooner children start to recognize that, it will help them become better in money management and be involved-in and support parent’s decisions.
Ariely also indicates that his children don’t get allowance or compensation for household and individual chores. “They’re part of my household and we all have responsibilities. Just because you do the dishes doesn’t entitle you to more money,” he said.
To learn more about Dan Ariely’s new book click here.
PS. Photo by Olga DeLawrence on Unsplash