There is a big, colourful jar of jellybeans sitting on the table.
It is full to the brim.
There are three ways the jar could be emptied:
Scenario 1 – You grab a small handful of jellybeans
Everytime you walk past in a day, you grab a small handful. You would start seeing the jellybeans going down rather quickly.
Scenario 2 – You grab just one jellybean
Another way would be every time you walked past you took only one jellybean. Even walking past multiple times a day, the change would be hard to notice.
Scenario 3 – We tip the whole jar out
Tipping the jar out on the table and gorging yourself with jellybeans is another option. All the jellybeans are gone and you have a nasty stomach ache!
Savings and jellybeans are no different.
If you have your cash sitting on the table and every time you walk past it, you take a fist full of it, it’s not going to take long for that money to go.
If you take only one of the bills every time you go past it, it will go down slowly (depending on how many times you walk past it!). Eventually it will go.
Finally, if you splurge, take all the money and spend it, there will be nothing left over.
This analogy in a lot of ways explains how people learn how to spend and/or save.
Applying this to children & saving.
When a child starts earning pocket money, they have the opportunity to start filling the jar with money.
There are two different ways to approach saving.
One is, the jar sits out in plain view on the kitchen table. At every available opportunity, they add some money to it. Other times, they take money out. The levels will fluctuate.
An alternative approach would be to create two jars.
One sits on the table. The other is hidden away by Mum & Dad and is out of sight. Everytime money is added, it is split between the two jars.
The hidden one keeps growing, but is not visible on a day to day basis.
It keeps growing & growing and eventually the child will be surprised how much money will build over time when checked.
In a lot of ways, this approach (albeit a simplistic one) is how children could learn about savings.
Have a split between fun money (for day to day expenditure) & savings (for longer term strategies).
Teaching these principles from an early age will provide the foundations and set your children up for life.
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