When should young children learn to save, to spend, and to use money as a form of helping others? Research indicates that children as young as age three can begin to understand the value of saving and spending. By age seven, many children have already developed habits and mindsets for how money is earned and what to do with it. Currently, thirty-five percent of adults in America have debt in collections, therefore teaching our younger generation how to be mindful consumers, savers, givers, and investors is imperative if we are to improve the amount of debt our future generation creates.

Parents are the most influential teachers for their children’s financial behaviors. We can begin creating a healthy mindset by reading books with our young children about the adventure of saving, spending, and giving. The Book Three Cups, written by Mark St. Germain, details a heartfelt story of a young boy who learn to split his allowance into three cups: Saving, Spending, and Charity. Deciding how to use the three cups details the adventures in life. This is a great book for children between ages four and seven. My five year old even selects it as her choice for a bedtime story.

Young children also need to learn that if they really want something, they should wait and save to buy it. This valuable lesson creates a framework for later spending habits and self-regulation. Give your child opportunities to hear the word “no” when it comes to wanting something in a store. Parents can provide simple statements such as, “We are here for groceries and not candy or toys today” or “Do you have your spending cup? Is this how you would like to spend your money? Make sure you have enough.”  These repeated confirmations of financial boundaries give children experience in making decisions and waiting- both are lessons of paramount importance.

Additionally, learning about money can be fun. Just like Three Cups suggests, create three artful jars – each labeled “Saving,” “Spending” or “Sharing.” Each time your child receives money for doing chores or from gifts, equally divide the money among the jars (also a great math lesson). Deciding how the money in each jar is spent becomes a meaningful family discussion and sets a tone for independence and the importance of giving back to our community. Most children love to help community causes such as food drives, toys for other children, and animal shelters. Let them choose a cause that is important to them and use their “Sharing Jar” money to contribute to something for it.

Lastly, make sure you are always consistent. This is a life-long lesson that when taught well early on, it can have impactful outcomes of personal well-being and financial responsibility.