My path to financial literacy started with three jars
When I was 9 years old, my parents gave me three mason jars. Inspired by Joline Godfrey’s Raising Financially Fit Kids,and their own unique experiences, they believed in the power of building positive financial habits early in life.
It was an unusual gift for a 9-year-old, almost like receiving coal on Christmas morning. But after hours of explanation and years of experience, I realized my father had been laying the groundwork for me to become financially literate.
Every Sunday, my dad and I would sit at our dinner table, lay out my three jars, and open a navy-blue ledger. These weekly paydays began with a calculation of my set allowance plus however much I was owed for completing chores around the house.
We would then take a trip to the ATM to withdraw my pay and come back home to divide up my earnings.
Together, we would deposit my earnings amongst the three jars. They were each labeled “Spending,” “Saving,” and “Giving.” We would place 60% of my total earnings into the spending jar, while the remaining 40% were split evenly between the saving and giving jars.
“Your money is your money,” my dad would say, giving me freedom to do what I wanted within the confined purpose of each jar. As the weeks went by, I gained fundamental habits of personal finance, such as allocation and saving.
With this new unchecked freedom, paired with convenient access to my spending jar, I relished the thought of buying everything from Lego sets and Nerf guns to stuffed animals at the zoo. But I noticed how quickly my money would run out by Saturday — the day before I got paid.
Funny enough, the only time we could visit the Lego store was Saturday and at that point, I could no longer afford the pricier sets I wanted. I was forced to reckon with the feeling of living paycheck-to-paycheck, something 61% of American consumers experience, according to a new report from LendingClub. I had to get my spending under control. I began to track my expenses in my ledger and would reconcile the difference in balances between my ledger and jars.
On the other hand, I almost never touched my savings jar. Initially I was saving for LEGOCon and iFly Indoor Skydiving, but as I grew older, my goals expanded to include my first car and even college. I came to understand that if I wanted to achieve such goals, keeping my earnings in a “Early Saver” Savings account with minimal interest would not get me there. I eventually split my savings, opened a custodial brokerage account and bought my first stock in August 2020.
So why the giving jar? I asked my father that very question a couple of years ago when we were transitioning my jars to bank accounts. I had grown skeptical and had all this pent-up cash in my giving jar, and I figured it could be better used in one of my other two jars.
His response, “because money has the power to change the world,” makes more sense to me now.
Giving, and especially the act of giving money, detaches you from your own earnings. The giving jar demonstrates the valuable lessons of humility, giving back and making others smile. Each time I bought a birthday or Christmas present for my family or used my giving jar to inspire change through donations to organizations that I supported, I felt an immense sense of pride and heartwarming gratitude.
Looking back on my experience, it was the hands-on nature of going through the process with my dad, week after week, which instilled in me not only positive financial habits, but also a keen interest in finance and investing. The three mason jars were effective in teaching me to rationalize my spending, grow my savings for future use, and make giving a regular habit.
While everyone’s financial education is different, by exposing your children to these fundamentals at a formative age, they will build a mental toolkit to better tackle financial decisions later in life.
Diego Wright is a rising senior and the President of the Investment Club at Eastlake High School.
