For ages, we have taught kids how to Save & Spend - that's it! Absolutely NO mention of the word Invest. Honestly, it's no wonder we have generations who need good investment techniques! Financial Literacy and Money Management needs to be revamped and rethought if we are to really empower our youth.
Concepts of good investing need to be taught early if you want your child to truly appreciate how money can grow while they are getting on with life. At Explorer Hop, in our Kid’s Camp Millionaire we teach 6 year-old’s the 3-jars technique with a twist!
It works for kids as well as it works for teens & adults! It doesn’t matter how you divide your money - just make sure you follow the rules.
What is a "Jar"?
For little kids, the "Jars" could be different piggy banks, but for older kids and adults, we recommend going straight to bank accounts, money market accounts and trading accounts.
Jar 1: SAVE!
Yep! It sounds a little too simple but the first step to managing your money is Saving it! Now, before you think I’m stating the obvious, let’s see what that actually means.
Saving your money means putting a breaker on that credit card and waiting before you use it!! Like seriously, instead of splurging $1200 on that awesome iPhone 12, take a pause, go for a long walk and keep that credit card in your pocket. Instead of embracing instant gratification, have a fling with the idea of waiting and buy something that’s not only nice but affordable!
Jar 2 : SPEND!
I know I literally just said that rule number 1 is to Save, but hear me out before you walk away.
When I say "Spending", I mean Spend Responsibly.
Buying an iPhone12 when you can’t really afford it is the opposite of being responsible with your finances. Instead, hot the pause button and save that money! Look for deals, wait for promotions and make sure you can actually afford it! (Putting it on a Credit Card is not affording it.
Prioritizing your expenditure is the first step in doing just that. Say you really want to buy a new phone but you also really want to buy a gaming console, figure out which one you want more, then when you save enough (see rule above) to actually buy it without getting into debt, go for it! .
Jar 3: INVEST!
Wake up everyone!!! Millennials are entering the gig economy, COVID has pushed us into remote working norms and all governments have outspent themselves to keep their country safe during COVID. Future pensions are poof! Gone! It's up to you to ensure that you have a good future and that investment starts now.
Investing allows you to actually grow your money while you are figuring out what to do with the rest of your life! It gives you the breathing space you need and the ability to lead a life that does not require you to take a job just for the sake of working. Learning to invest can actually allow you to follow your passions!
Keeping your money in the savings account gives you about 1% return, learn to invest and play the stock market and you are looking at around 10%. Which one makes more sense?
At Camp Millionaire we see just the impact being financially savvy has on youth and it is an inspiration for the future!
Re-purposing the 3 jar rules that Grade 1 kids use, can not only help your money grow, it can quite literally change your life!
Taking care of yourself is as much about your finances as it is about your health. Whether for yourself or your kids, money management and investing skills need to happen, and what better time than now?