Today we have a great guest post from Anya Bennett. She gives some great advice. I prefer my “The 6 Magical Piggy Banks – Money Management Method” but greatly appreciate Anya’s generosity in sharing her ideas with us. In the end we all just need to go with what works for us. Enjoy Anya’s article and please leave her your feedback below so she knows that she’s appreciated. ;o)
Cheers…Amanda…Excited Life Enthusiast! ;o)
Four jar allowance method – Teaching kids money management to avoid debt by Anya Bennett
Most of the families do not discuss about finance, daily budgeting and debt worries with their children. Due to this, the children hardly get to know about money related matters such as saving for the future, debt management plan or check their pass book while they are growing up. The children need to be educated on money matters from their childhood so that they may grow up as financially responsible adults. This would prevent them to accrue debt in future. But, later in life, if your child still faces debt problems, they may take the help of suitable debt relief programs, where debt counselors serve the debtors with prudent advice to get them debt free.
The four jar allowance method – What is it?
The four jar allowance method is a smart way to educate your children about managing money in the most efficient manner. You may guide your child to save money in four glass jars separately and spend them in a systematic way with the help of this method. Presenting the weekly payments to your child will not help you much in this matter. Let your kids do several kinds of jobs and then earn money from you. This will make your child realize the worth of the hard-earned dollars and they will be able to become financially responsible. As parents, you should remain honest, disciplined and steady during the implementation of the entire plan. Only then you will be able to set an ideal example to your child.
The four jar allowance method – What are its functions?
The four jar allowance is the method where there are four jars labeled as alms-giving, small time savings, the spend-as-you-wish and big time savings.
- Alms-giving – The children can easily appreciate the idea of charity. So, you should make them understand that they should help the poor and the needy and donate at least 10% of their weekly allowance to them. You should administer the spending of the charity funds for few days because your kids are innocent and can be evaded in this charity business.
- Small time saving jar – This jar teaches your child the value of sacrifice and patience. When your child wishes to purchase anything costly, ask him to wait for at least sometime so that he can make the necessary savings for it. Their accomplishment of wish will be unique only when they put some efforts into it. Immediate satisfaction is the main problem of the present generation and has put millions of people into the debt trap. In this situation, the youngsters will have to opt for debt relief options to come out of such problems.
- Quick cash can – The quick cash provides the children full freedom to spend on anything they want. This is the place where you can recognize the interests of your child and you’ll be able to understand if your child is learning to be financially responsible. You may put some limitations on purchasing too many comic books, junk foods or bubble gums. Keep an eye on your child and find out whether or not they are using or misusing their freedom.
- Long term saving jar – The money that your child keeps in the long term savings jar should not be used for at least one year. Although this may frustrate him in the initial stage, he will feel very happy by saving in this jar in the long run. He will adopt this habit and the glass jar will become bank account in future. The long term saving jar is the best probable way to make a final sense of independence, pride, responsibility and contentment into your children.
As your child grows up, it is very important that they increase their financial knowledge too. This will enable them to stay away from the unnecessary debt problems. Thus, the sooner they learn to spend money responsibly, the better it will be for their financial future.
Author Bio: The article is a courtesy of Anya Bennett, a financial writer associated with Oak View Law Group. She helps ample of people to rid their debts totally and lead life with financial freedom. For more information on debt relief, visit the site.