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Anyone remember being told as a kid never to talk about money, politics, or religion? This familiar parental advice surely has good intentions – but one unintended consequence can be missing out on the opportunity to raise financially literate kids that are confident in their ability to manage money.

While it might feel awkward to talk about how much we earn, save and spend – it’s an important conversation for kids to hear. Because while it might seem like they have plenty of time before they need to understand complex financial topics – the reality is that by 17 and 18 years old, teens are being asked to make big financial decisions, especially as it relates to education after high school and student loans.

The longer we wait to talk about these “taboo” topics, the harder it will be to instill good habits. So, before you take money talk off the table, start with three words that can help kids as young as kindergarten age get off to a good start: save, share, spend.

Save, Share, Spend

Save, Share, Spend was developed as part of the Invest in ME Kindergarten Program and is designed to help kids begin to understand budgeting, and making choices with their money. It centers on the premise of taking any income, whether that’s from a job, an allowance, or even birthday or holiday money, and separating it into three buckets: some to save, some to share, and some to spend. For younger kids, you might start by dividing the money equally, and as children get older you can encourage them to start making decisions about the allocation themselves.

Invest in ME Kindergarten is a joint project of The Alfond Scholarship Foundation (ASF) and the Finance Authority of Maine (FAME) to make digital resources and materials easily shared with students and families, regardless of where and how learning is taking place.

For Younger Kids

Younger children often have an easier time understanding things that they can physically see and touch. That’s why ASF and FAME recommend setting up three jars that they can use to separate their money. When they get a gift or reward for doing a small job, help them decide how to allocate the money between the three jars: some to save, some to share, and some to spend.

Remember, dream big but start small. Before you start, brainstorm with your child about what they want to do with the money in each jar. For example, maybe they want to save up for a new toy – or donate their “share” money to an animal shelter. Once you’ve landed on a goal for each jar, label the jars accordingly, and use a chart to track how much money has gone into each one.

For Older Kids

For older kids, you might use this opportunity to help them set up their first bank account. Many banks and credit unions now have checking and savings accounts designed specifically for kids – without cumbersome fees or minimum balance requirements. Help your child open a savings account (for longer-term goals) and a checking account (for shorter-term spending). You might also choose to open a third account for “share” funds – or simply allocate a percentage of one of the save or spend accounts to designate as “share” money.

The Value of a Dollar

While the benefits of saving and sharing are pretty obvious – there is also a lot to be learned from the “spending” portion of your child’s money. Deciding what to buy (and what NOT to buy) is an incredible life skill for kids and teens. Since the vast majority of us will never be able to buy everything we want, the earlier we begin practicing this type of financial decision-making the better.

Having their own spending money is also critical in helping kids learn the value of a dollar. After all, it’s difficult to understand how much money is “worth” when its supply is seemingly endless! Having to make choices with a limited supply of money helps kids learn to make smarter financial decisions, weighing wants versus needs, and often inspires them to work harder so they can earn money for the things they truly desire.

While Save, Share, Spend is a simple concept, the life skills that can be learned from it are plentiful. From patience to budgeting, to philanthropy, to the true value of a dollar – there’s something for everyone in this simple, yet effective practice.

Learn more about Save, Share, Spend and download related worksheets for kids here: https://www.nextgenforme.com/invest-in-me/invest-in-me-kindergarten/educators