Today’s Wall Street Journal includes a story of how one family has started their son on the road to financial literacy using his allowance. The article, found here, features adorable Ryan Emah, a 7 year old second grader, who gets $3.00 a week from his parents for fufilling “basic expectations ” like emptying the dishwasher and folding clothes. He and his mother use the website threejars.com to help him manage his money. He divides his weekly allotment among three “jars”: saving, spending and charitable giving. In a wise move, his mother set up the virtual savings account with a high interest rate–she used 28 percent–so that Ryan can see and understand how interest builds on even a small amount of savings. Ryan dips into his spending jar to buy a new Beyblade as often as he can, and is considering where he will donate the funds from his charitable account.
It is very important for our sons (and daughters) to learn financial literacy. How are you working with your children to make sure they become responsible money managers? As this article demonstrates, you can start when they are young, and there are websites available to help you. GCP will be researching and sharing tips for helping your children understand the value of money and the benefits of saving and investing it. Stay tuned!