Parents often have money questions, both big and small. 

This month, our guest coach Mr Money answers a top question from our community: How do I teach my child to save money?

Dear Parents,

I always encourage parents to introduce 3 Money Jars to young children, around age five or six. This is where they can put their allowance or gift money into 3 jars:

1. Save Jar: This jar teaches children the value of delayed gratification. Money here is set aside for future goals, like a bicycle or a new book set. The goal is to show that consistent saving leads to achieving bigger dreams. You can teach them to allocate 20% of their allowance or red packet money to this jar.
2. Spend Jar: This jar is meant for small and immediate pleasures like snacks, small toys, or a fun activity. The goal is to practise making thoughtful choices instead of impulsive purchases. Allocate about 70% of available funds to this jar.
3. Share Jar: This jar is used to help others, support a cause, or do something kind for a friend or family member. The goal is to teach children that money isn’t just for ourselves — it can make a positive difference for others. Allocate 10% of funds to this jar.

By "jars," I do mean physical jars or clear containers. These are ideal, as they allow children to visually track the growth of their money. This makes learning more tangible, especially for visual learners who benefit greatly from seeing how their choices affect each jar.

Even as children grow older and additional jars are introduced, I still prefer maintaining the use of physical jars. 

Using bank accounts or credit cards to represent certain jars should only come later, and only for those who have already shown consistent discipline managing physical jars. Without that foundation, the shift to digital money management can be premature and ineffective.

Bonus Tip: Start a weekly allowance “money moment,” where your child drops coins into jars and talks about what each jar means!

For Teens: Move Towards 6 Money Jars

As children grow, their money world expands. Think school trips, gadgets, sports gear, tuition, future education, and even investing. A single “Save” jar can’t hold all these different needs.

Moving from 3 to 6 jars helps achieve three powerful things:

1. Match Money to Purpose. Different jars = different goals with different timelines. There is the movie they want to catch this week, the new game that is being released next month, and in the longer term, courses that they might like to take, as well as higher education.
2. Build Decision Skills. With more categories, children practise allocating limited resources. Think of this as a mini version of family budgeting and investing.
3. Model Real Life. Adults don’t just have one big bank account. We manage necessities, long‑term savings, investments, learning, giving, and lifestyle choices. The 6‑Jar system mirrors healthy adult money management, so kids can grow into it naturally.

Age 13 to 17: Split the Spend Jar

This is where you teach your child to replace a single Spend Jar with 2 jars, to cater for:

• Necessities: Daily or routine spending you must cover, e.g. transport, school snacks, basic supplies.
• Long-Term Savings for Spending: This is for longer-term goals to save towards, e.g. class trip, better headphones, sports gear.

Now, your teen has 4 jars to manage:

1. Save (20%)
2. Necessities (40%)
3. Long-Term Savings for Spending (30%)
4. Share (10%)

Age 18+: Split the Save Jar

This is where your young adult takes the original Save Jar and splits it into 2 jars for:

• Financial Freedom: Money that is not meant to be spent. Instead, invest it to build assets and future passive income.
• Fun: Guilt-free enjoyment money. Spend it to prevent burnout and reward discipline.

Now, there are 5 jars to manage:

1. Necessities (40%)
2. Long-Term Savings for Spending (20%)
3. Financial Freedom (20%)
4. Fun (10%)
5. Share (10%)

This coincides with the fact that they will likely have some additional cash due to part-time work, holiday income, or National Service.

Age 21+: Add an Education Jar

As your child fully enters adulthood, they are ready to put aside funds solely for education or self-growth. This can be to advance their career, or simply to help them become better people.

Now, there are 6 jars to manage:

1. Necessities (30%)
2. Long-Term Savings for Spending (10%)
3. Financial Freedom (30%)
4. Fun (10%)
5. Education (10%)
6. Share (10%)

The fund allocation suggestions are just guidelines. You can adjust them depending on allowance size, family values, and financial goals.

Who is Mr Money?

Meet Ernest Tan — author of Raising Financially Savvy Kids, founder of Jopez Academy, and financial literacy educator who has conducted workshops for students at Hwa Chong Institution. From financial hardship to millionaire mentor, he now helps families shift their mindset and build lasting wealth together.

Found Mr Money’s advice helpful? Here’s your chance to learn more from him! 

Members of our KiasuParents community can enjoy access to his Financial Parenting Masterclass (worth S$199) at the special price of S$29, with the discount code KSPHUDDLE2604, while slots are available. Find out more about the masterclass, which has long-term benefits for the whole family.

This article is brought to you in partnership with Jopez Academy.