To many kids, the concept of saving money is about as foreign as the notion that carrot sticks make a much yummier snack than cookies. My kids love Valentine's Day and birthday cards received in the mail because they know there's likely some cash inside. Those dollar bills burn holes in their pockets until they're spent.

Spending — Saving — Donating

At one point my seven-year-old actually had over $100 in his piggy bank. Impressive. But a Dollar Store trip here, a visit to Target's toy section there, and that money dwindled away. In addition, my son loves helping those in need. I swear sometimes elementary schools prey upon the benevolence of their students. I lost track of the number of donations my son made to school fundraisers. Please know that I am so proud of his awareness that there are many less fortunate than he. But when he tried to donate $20 to the school's Pennies for Peace campaign, I felt the need to intervene. We compromised and donated $5 instead.

So I'm implementing a solution for helping he and his sister better understand the value of money. It's called the Spending-Saving-Donating Plan.

Three Piggy Banks Are Better Than One

Forget one piggy bank. My kids now each have three. Bank No. 1 is labeled "Spending." This is the bank from which they make withdrawals when they feel the urge to buy that toy the next time mommy visits Target. Bank No. 2 is marked as "Saving." This bank is a true piggy bank, one that can't be accessed without the hammer. It's money that shouldn't be touched. And bank No. 3 is tagged the "Donating" bank, the one where money can be accessed the next time there's a call to give.

To the best of my abilities, my kid's allowances are given in increments easily deposited into all three banks. Gifts from grandparents are trickier: My son found out the hard way that tearing a $10 bill into three parts doesn't work! But we're learning.

The Spending-Saving-Donating Plan is newly initiated in our home, so I don't have a success rate to cite yet. But I can already see the impact it's making on helping my kids understand where money goes.

Lots of lessons to learn! How do you teach your kids about money? If you don't have a strategy, try the Spending-Saving-Donating Plan. Let us know how it works!

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