For starters, we stopped giving them an allowance for doing chores. The kids both have tasks that are expected of them as members of our household. They are not rewarded for doing these tasks. They do, however, receive an allowance and conversely, we would never take away their allowance as a punishment. The problem is that Jake in particular was not learning or grasping the concept of saving for something special - if we were at a store, he would spend his allowance whether he had $10 or only $1 and the only reason he ever accumulated any money was because we hadn't been to the store in awhile.
Enter the Money Savvy piggy bank, which comes complete with four dividers - a slot for spending, a slot of saving, a slot for donating and a slot for investing. I wasn't so sure that they were old enough but the instructions that came with the bank say it is for kids age 4 and up. I explained to Jake and Jadyn that they would get $4 a week, $1 for each compartment and I explained what each compartment is for - money to spend on everyday things, money to save for something special, money to donate to a charity of their choosing and money to invest for their college education.
Now a couple of caveats - for starters $4 is quite a substantial allowance for a 3 and 5 year old, but it made sense to choose a number that was equally divisible by four and in reality they only have full control over how they spend $2 of those dollars a week. Also, while the concept is meant for them to save for something big like a new bike or a car when they turn 16, I would just really like to see Jake in particular choose a toy or game he really wants and then work toward that goal. While he is still free to spend his $1 a week, hopefully he will eventually see that by adding his spend and save money together, he can reach his goal twice as quickly.
And I have to say, the banks were a big hit and it was so cute to watch the kids put their first 16 coins in the slots. Then to top it off, they dumped the money from their old piggy banks out and I told them they could put those coins wherever they wanted - and both put quite a bit in the donate compartment and talked about how they wanted to help people and animals in need.
Here they are posing with their new piggy banks:
Some people may think this all seems awfully complex for such a young age and I had my doubts but the reality is that the kids see me paying for everything with a plastic card and think I can just go to the "money store" as they call it and get more whenever I feel like it. Maybe that's my fault. I haven't always been the smartest with money and I do consider shopping one of my favorite pasttimes. I just really want to try and get this right and after seeing both a mix of what I think and hope was comprehension and excitement on their faces today, I think the money savvy pig might be the right answer for us.