Money Matters: School Allowance and Money Management

A few years ago, I came across the three jars concept in teaching kids about finances and money management.

The three jars concept teaches kids to divide their money in three jars labeled for giving, for saving, and for spending.

In most videos I’ve watched on YouTube, the money that goes to the giving jar is meant to teach the child to give to charity institutions and for those in need; the jar for savings is meant to teach the child to learn to invest; and the jar for spending is for his own expenses.


School Allowance

I’ve taken note of the three jars strategy and have started teaching it to our eldest son since two years ago. But since our kids are home-schooled and we’re usually just around when they join activities, it has been unnecessary to give them school allowance until this school year.

This year, we enrolled them at a nearby blended homeschool center where they get to join Music, Arts, P.E., Values and elective classes once a week.

Unlike in their previous MAPEH center, they now have to be in school for 8 hours, so I thought it was a good opportunity to start giving our eldest son school allowance, after all he’s eleven and needs to learn how to manage his own money.

The failed strategy

We tried another strategy years ago, the one where we give Pablo money for completing chores around the house, but it didn’t work for us.

For one thing, I think that there’s value in teaching kids to do house chores without monetary rewards. Not only are these practical life skills, we also teach them that being part of a family means taking your place and doing your part.

And it teaches them stewardship. They learn to take care of the things that God has blessed them with- like our home, their toys, their things.

Secondly, we kept running out of money to pay him, haha! I thought it was unfair to pay a child in coins for “working,” and paying Pablo fifty pesos a week (and more for bigger chores) went beyond our budget that time. We had to rethink our strategy!

Our modified version

This school year, we started giving Pablo a hundred pesos for every MAPEH day.

Instead of jars, Pablo uses labeled envelopes to divide his allowance. And instead of labeling them for giving, for spending and for saving, we taught him to label them tithes and offering, savings and spending.

I’ve mentioned before that we practice giving our tithes and offerings to remind ourselves that it is God who gives us the ability to produce wealth. We want to pass this on to our children.

Then of course the savings envelope is for teaching Pablo to make financial investments for his future, which I also think trains him against instant gratification.

We’re opening a mutual fund for him at the end of the school year and that’s where his savings money will go. He goes with us everytime we make deposits in our own MF’s and we’ve been talking to him about why we’re doing it.

I’ve also heard that the best way to make kids excited about stocks and investment is to help them put their money in a company they already care about. For example, if they like Jollibee, then help them invest in that company.

So maybe Pablo will be interested in investing in an animation company he knows very well. We’ll see.

The principle of sowing

As for the rest of the money, he’s free to use it however he pleases. The kids bring lunch boxes, snacks and a bottle of water each anyway, so the money is really a bonus.

If you’re wondering why we took out the “giving” label, it’s because we are teaching our children to give from what they have.

To choose compassion, generosity and kindness over their own wants.

And I’m glad to see Pablo practicing this. Yes, he would buy himself something once in a while, but I’ve also witnessed him buying something for a hungry friend or brother. It’s a good start.

One day, we will teach Pablo to include “giving” when he budgets his money, but for now, we want him to practice the principle of sowing generously.

Remember this: Whoever sows sparingly will also reap sparingly, and whoever sows generously will also reap generously.  Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver. 2 Corinthians 9: 6-7.

The key is to let your kids spend some of their money, because it’s when they experience its benefits that they start understanding its value. I think it’s easier to teach your kids how to save and invest if they understand the value of money.

Now the question is, will they be willing to let this “value” go to help another human being, for a worthwhile advocacy, or to stand on their convictions?

I believe that they have better chances at this if we train them young.

Of course we want our kids to lead financially abundant lives when they’re adults, but we also want them to live full lives – knowing how to love people and knowing how to honor God.

Does the strategy work?

So far, this strategy works for us. Every time we give Pablo his allowance, he automatically divides his money and puts them in their respective envelopes. He doesn’t dare spend until he has done this.

So I think we will use this strategy for our other two kids when they’re old enough to remember to wait for their change before walking away from the counter with their ice cream , haha!

For now, we talk and teach them the principles which they will eventually have the opportunity to apply in a few years time.

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  1. In our home, I don’t give money when my son do chores because I believe that everybody should do their part in our house. I allot monthly allowance for my son, I give school money but not everyday, I just give pag nagspend siya. Yung hindi nagalaw dun sa monthly allowance niya, nilalagay ko sa savings or stocks niya. Most of the time, nababawasan lang yung baon niya pag naggive siya sa school, meron sila sharing piggy bank.

  2. Kids these days are very fortunate to be receiving financial education very early. Maybe if we had all these information when I was growing up, maybe I wouldn’t be worrying so much about finances. Haha! But I’m learning and that’s the good part. Good job to Pablo! ????

  3. I didn’t apply the money for chores. 🙂 I want them to think it’s more of a responsibility. We do commend them whenever they do a great job at home.
    Mine don’t handle money yet, but we try teaching the principles of giving with their toys. There’s a plastic bag where they put toys to be given to other kids. 🙂 Whenever there’s a birthday party at school, we let them bring a gift or prepare the gift to practice giving. 🙂

    1. Giving their beloved toys away is such a nice practice. I have a friend who does that, too, every Christmas season. 🙂 We can’t apply that here because the toys here are old and most of them are not in great condition anymore.

    2. Bata ka pa, mommy Liz! Kami nga ni Jay, we started very very late. As in, we were in our mid-30’s when we started cleaning up our act and took us until we’re 40 to start on our investments. 🙂 Kaya mo pa yan!

  4. I love what you said about allowing kids to experience the benefits of spending their money on something. I’m guilty of being too focused on the savings part that I might be accidentally teaching my boys to hate the task, hehe. Must be the Ilokana in me, haha 😉

  5. Now that my son is 2 yrs old, I’m trying to make him experience how it feels to have a piggy bank. Malapit na syang mapuno, but allowances, not yet, I think that will happen when he goes to school or start joining Sunday School. I hope he will grow up to be financially independent and smart too.

  6. How young should we start teaching our kids the value of money? My 8 year old also brings baon to school and they are not allowed to go the canteen so I dont give him allowance yet. I see though that he is cost conscious… when we bring him out for shopping, he would check for an items price and compare quality, function.

    1. According to Raising Up Moneywise Kids by Chinkee Tan, we can start teaching our kids about money at the age of 2. But of course there are age-appropriate lessons for their ages. For kids 6-8 years old, it says here that it’s the time to teach them to budget,keep a bank account and the value of hard work. The preparation for it (ages 4-5 years old) would be teaching them to pay and save. 🙂

      We did it late and hits and misses with our eldest, and that’s okay. Kids can catch up even if you didn’t start them at 2. 🙂

  7. I practice Money Envelopes in budgeting our household expenses. It’s super effective! I haven’t thought of the money strategies you practice for your kids though. But surely, I will be teaching my son these strategies and money principles, too! I love that you’re educating your kids about investing and saving money for the future. Thumbs up to that, Mommy May! 🙂

  8. We have already grown ups or adult children. I haven’t remembered that our 6 children had been taught about savings. When they go to school, we just gave them enough allowance for them for that day. But back home, we have a set aside money for their future needs in school, during vacation, and even in holidays. When time comes, we tell them that we save the money for them. We believe that by our example will do the same later for their own family.

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