My daughter’s school recently hosted a walk-a-thon.
My wife suggested that she donate $25 of her Share jar (more about the three jar system here) money. We looked in her Share jar (now that she’s a tween it’s a digital version of the Share jar so we actually looked on an app). Because we hadn’t done this in awhile and because a portion of her allowance always goes to the Share jar, she had over $100!
I suggested that maybe she could donate $50. Without hesitation, she said yes.
Setting up the automatic transfer sets our kids up for money-smart success.
Friend and fellow podcaster, Larry Hagner (listen to our podcast conversation here), had a similar experience with his son. He had recently started up his own allowance for his kids and when his son was in line to make a purchase, the cashier asked him if he’d like to donate to a local charity. His sons’ eyes lit up as he asked his dad if he could use the new Share jar money for this.
What do you think his dad’s answer was to that question?
By putting that Share jar money aside consistently, both kids had the money available when it was useful. By doing it automatically, neither noticed any effect on his or her day-to-day spending. And as parents, it’s important to intentionally make that point after these experiences so that they understand the power of automatic deductions. This is something we want them to carry forward to adulthood.
Now imagine if I asked my daughter to pull $50 from an unallocated stash of her money (not from a Share jar)? When the opportunity cost of that donation is a movie, dinner with friends and strawberry & lavender ice cream, suddenly it’s a much more difficult choice. And as much as I’d like to believe that my daughter would offer those 50 bucks to her school in the same way, I simply need to think back to how I might have behaved given the same choice at thirteen. That money was coming to the movie!
Setting up the automatic transfer sets our kids up for money-smart success.