Beliefs, attitudes and behaviors are developed at an early age. Much effort is spent to save our children, educating and teaching them important values, but what about the importance of money and savings?
Many parents give pocket money without developing basic financial principles. By teaching a framework that you are comfortable with at an early age you will install not only the importance and value of money but lifelong values to set them in the right direction.
Money Box One they have total access to the money and can take out to the shops to spend on whatever they like, they also like to role play with the money.
Money Box Two is only for special items they are saving for, eg a special toy or game that may take some weeks to save up for and then buy it themselves, giving them a sense of pride that they have achieved a valuable purchase.
Money Box Three has a secure lid and shows the how much money can grow over the years, which when full gets placed in their bank account. This is used in later years to invest in shares, showing them whatever your particular strategy is. Mine is again a 3 bucket share strategy with high risk, medium and low risk with varying percentages within each depending upon their age. Speak with your financial advisor to see what strategy best suits you and your family.
This helps install a principle which should follow them through life, (I know because my parents did a similar strategy with me…which made me passionate about saving and investing). As a family we also have investment funds set up for the children and I hope that when they come to the age of receiving this money they will have the common sense to invest it wisely!