All parents want to be able to teach their child to be a responsible handler of this resource called money. However, many parents struggle with their own financial status and feel ill-equipped to teach their children about money. Some avoid the issue alike, while others teach what they know, which may or may not be adequate for their children's future.
I discovered a way to teach children how to be a responsible handler of money through a jar and a notebook. I wanted to create my first investment portfolio. So, I decided to save $ 100 in quarters for each paycheck and record it in my notebook. Over a six month period, through a combination of savings from work and certain financial windfalls, I saved $ 2500 in quarters. On New Year's Day 2001, I sat in my living room and roled the quarters in $ 10 wrappers. The next day, I walked into a local bank with two grocery bags of quarters. I received my savings in big bills, paid rent and purchased a $ 1000 money order to open my account.
Over time, I developed a system that takes five jars and five notebooks. I labeled each jar in the following manner:
1. SAVINGS : This jar is to develop a savings. You must save with a purpose. it's purpose must be a POSITIVE one. NEVER save for a “rainy day”, but for a “freedom day”.
2. INVESTMENTS : This jar is to develop a fund to put to work. This money is to produce income-generating assets (real estate, stocks, bonds, annuities, etc.)
3. TITHING : This jar is to give to one's house of worship or a charity. I call this the “test of faith” jar because it operates the Universal Law of Compensation: Give and you shall receive.
4. EDUCATION : This jar is to finance your self-education in personal development and wealth creation, be it books, CD's, DVD's, seminars or home study courses.
5. STARTUP CAPITAL : This jar is to raise capital to start your own business. Apple was started with only $ 1500. The late Rev. Ike built his multi-million dollar prosperity office in 1959 with $ 200 he saved from his unemployment checks.
For example, if you give your child $ 100 per week, take the first $ 50 and spread it even among the five jars ($ 10 per jar). Record each “deposit” in a notebook for each jar. This exercise will help not only the child, but the parent as well. Go to any restaurant and ask for five empty jars. Clean and label each jar. Get a notebook for each jar. Then, let the savings begin!
Happy Wealth Building!