Creating a piggy bank system is a great way to show your child the process of putting money towards different purposes- basically how to budget!
Here’s how it works:
Get 3 piggy banks. They don’t have to be fancy (surprisingly, they don’t even have to be pigs), just something secure that your child can put their money in. Glass or plastic jars out of the recycling work just fine. Then label each jar: 1.) Saving, 2.) Spending, 3.) Sharing. Make sure that the label is large and clear. Decorate the piggy banks together to make it a special event.
Now, when your child gets money, be it allowance, a gift or something else, talk to them about what they want to do with the money.
- Is it money that they want to spend on a treat the next time you go to the store? If so, it goes in the Spend piggy bank.
- Or, maybe they want to put some of it towards saving for a more expensive new toy or activity they’ve been dreaming of. Split the money between the spending jar and the saving jar.
- Finally, encourage that they put some of it (even just a tiny amount) towards a gift for someone they love or a worthy cause in the community. It could be buying a small piece of chocolate for that loved one or giving a few coins to someone in need. Teach them it feels good to give.
Some parents decide to have set percentages, for example having 50% of money go into saving and 10% into sharing. Some decide that cash gifts of certain amounts automatically go into saving, such as any gift over $50. Others decide that instead of contributing money to sharing that the family is going to gift their time by volunteering once a month. For your family, just start wherever it feels appropriate.
