Teaching the Save, Spend, and Share Money Method
This article was recently updated on 4/16/2021.
As a parent, you may have thought about when a good time to talk to your kids about money would be.
While teaching specific money methods might need to wait until they’re starting to earn a paycheck on their own or taking a young adult finance class, the good news is there’s one thing you can start teaching as early as four or five, to lay a foundation of good financial habits.
Let’s take a look at the Save, Spend, Share method.
How to Break Down the Save, Spend, Share Method:
Step 1: Saving Money
The first step in managing our money is to save. We always want to save half of our money, or 50 percent.
What does it mean to save money?
Saving means setting aside money for a future use. Saving money allows people to buy something in the future they don’t have enough money for today. This could be something you want to save for quickly, like new bike or video game. Or, you might be saving for an even bigger purchase, like a car or college.
Our Earn & Learn Savings Account is a great account for young savers. It will help them reach their savings goal while they learn the valuable lesson of saving.
Step 2: Spending Money
The second step in managing our money is to spend. We can spend up to 30 percent of our money to stay in budget.
What does it mean to spend money?
Spending money means using your money to buy something, like a product or service.
A product is something you can hold or touch. This could be a new soccer ball, book, or even going out for ice cream.
A service is something you do something someone does for you, and can usually see the action taking place. There are many types of services you could pay for, such as getting a haircut or buying tickets to go to the movies.
This step might seem the easiest to do, and it usually is! The trick is thinking about what you would like to buy with that 30 percent, so you’re buying things you know will use or like until the next time you have money to spend.
Step 3: Sharing Money
The final step in managing our money is to share. We should share the last 20 percent of our money.
What does it mean to share money?
Sharing means giving some of your money to a good cause. This can be any organization that is important to you, such as an animal shelter, food back, a local church, or any place that helps others in need.
Donating to a worthy cause should feel as good as spending it. Teach your kids to donate wisely. Whether it’s a dollar in the church offering or selecting a charity or cause, try to show saving and spending are great, but it’s also important to give.
Looking for another way to think about the save, spend, share method?
Watch how Tracy and Kayla break down the Save Spend Share Method with pizza:
Still not sure where to start on the financial education journey? There's good news--our credit union offers a number of interactive learning modules covering a range of money topics: How to Save, Building Emergency Savings, Checking Accounts and more! Visit the Helpful Resources section on our site to view these and others.
When it comes to money lessons, you don’t have to be Warren Buffet, just starting the conversation is important. Remember, if you don’t know how to start teaching your young ones about money, turn to your Credit Union. We offer a variety of youth accounts that earn interest and come with various incentives.
