Saving is one of the first financial lessons that kids learn, and many experts promote the idea that the earlier children can start putting money aside, the better off they’ll be. The logical progression from this idea is usually to have your kid putting some money in a jar or piggy bank on a regular basis. (Even better, your child should have three banks or jar, one for saving, one for spending, and one for giving/charity.) A family savings jar can be just as important to your child’s money education.

What Is a Family Savings Jar, Anyway?

A family savings jar is just a jar or bank that everyone in your family puts some money into. Whereas the other jars your kid might use involve his own money and his own financial decisions, the family jar is collaborative. In the best case scenario, everyone has a right to say how the money gets spent and to set goals for it, because everyone contributes.

What Does a Family Savings Jar Teach?

Like a personal piggy bank, a family savings jar encourages your child to set some money aside for a special cause or rainy day. It is different, though, in that it teaches him to work together with others on money issues. By contributing to the jar and being able to participate in plans, he learns the power of pooling funds, and that what he thinks and says about money matters in the big picture. He sees the family as a unit and has the opportunity to think outside of himself.

What Can You Use It For?

Anything! People use the money from their family savings jars for things like family vacations, a replacement television, entertainment fees, and much more. The main thing here is just that, ideally, everyone agrees that the money will go toward a specific product or service.

How Long Should the Family Save?

This just depends on the goals your family sets. If you set a goal to do something together that costs $20, then you might meet your objective in as little as a week. If you’re saving a few hundred dollars or thousands for something like replacing the family car, it can take months or even years to reach your goal. The general guideline is simply that the goal should be far enough out of reach that there is delayed rather than immediate gratification.

Where Should the Money Come From?

Kids often contribute to the family savings jar from their allowances, chore money, or other funds like birthday cash. Older children may put in some of their regular wages if they have a job. Younger kids usually don’t have as much money to offer, so if you’re going to make contributing required, then a good practice is to rely on percentages instead of dollar values to be fair. Kids can contribute more to the jar than you require, but not less. Alternately, you can just have family members put in what they can, when they can. Family members might contribute very disproportionately this way, but you’ll know that whatever is contributed is given completely out of free will, which you can praise and reward. If you use this system, you might want to set a contribution goal. If your child doesn’t meet the goal, there’s no penalty except not being able to have a vote in how the money is spent.