Teaching kids about money with the 3G bank

rachel moneyWhen our granddaughter, Rachel, turned five, we started giving her an allowance of $5 each time we talked. Since she and her family live on an island in Alaska, we primarily interact with them via Skype. Our usual calls conclude with reading two books; a longer picture book for the older girl and a board book for the two year old. It gives us a way of engaging the children, since we can’t take them to the playground.

3 cups bookWe were looking for an additional way to connect with the girls. When I read about Three Cups system of teaching children how to save, spend, and be charitable, that seemed like the perfect adjunct to our Skype sessions. Five seems like a great age to start integrating the three-cup system, even though the White House’s financial literacy guidelines target 3-5 year olds. The WH website has 20 things kids need to know to live financially smart lives, although the list is a good reminders for all of us. There are four principles preschoolers should know about money:

  • You need money to buy things
  • You earn money by working (or getting an allowance if you’re a 5 year old)
  • You may have to wait before you can buy something you want
  • There’s a difference between things you want and things you need (this one is tough to grasp, even for adults)

rachel ballet blurWe weren’t really sure whether this would be a sustainable, long distance activity, but figured that we’d try and Rachel’s parents were agreeable with the idea. With a stack of $1 bills, we introduced the jars to our granddaughter. With some direction the first time, she instructed us on how much to add to each jar: save, spend, give. At some point, we will need to transfer the cash to her, but not yet. Rachel’s Mom has helped with differentiating between the save and spend categories. Saved money can be used for a purchase over $20. A princess leotard for ballet is the saving + spending goal at the moment. During our Skype call, Rachel was describing her desired acquisition and asked for a tallying of her treasure to see how much she has accumulated. [And in case you’re wondering, our younger granddaughter watches, but doesn’t seem to feel left out.]

We trade our time for money; a tool that allows us to buy necessities, comfort, memories, frivolous purchases, and toys. It can buy experiences that contribute to happiness. It’s okay to indulge occasionally.

Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time. –Johann Wolfgang von Goethe

Parents want their children to learn responsible money habits and an allowance is a good teaching tool. It is also important to teach children about generosity. While the 3 G Bank (GG & Grandpa’s Bank)  is NOT opening a branch near you, it seems to be helping Rachel understand a bit of math and personal financial management. Now during our Skype time, Rachel asks for her money, even before books.  And yes, maybe it’s a bribe, but we figure it’s a good way to start her money management skills early.

© Joan S Grey, 18 Jan 2016

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