It’s time to set up your money buckets as part of the Barefoot Kids summer challenge

You’ve earned your first stash of cash and now it’s time to divide it into three money buckets as we enter week two of Scott Pape’s Barefoot Kids summer challenge series.

Welcome back to the Barefoot Kids School Holiday Challenge!

Last week I showed you how to pick out a couple of pocket money jobs that you can do each week — and you should’ve done them! Plus, you’ll hopefully have wowed your parents by helping out around the house with some parent pleasers and, hopefully, are ready to have your very first payday! After this week you’ll never have to nag mum or dad about buying you stuff. That’s right, when you’re done with this challenge you’ll have your own cash!

Are you ready?

Then let’s rummage through the kitchen cupboards ‘cause you’re going to need some jam jars.

Stash your cash

Imagine having your very own treasure chest, with loads of gold coins spilling out the top.

That’s what this step is all about.

See, you’ve already done the hard work of thinking up three jobs you can do around the house, so now it’s time for the really fun stuff: watching the money hit your hot little hand!

That’s what payday is all about.

Scott Pape’s new book.

When you get paid, you’re going to divide your money into three money buckets. Here’s how it works. Each payday you’re going to put some money into each of these three money buckets.

It’s pretty darn simple, right?

And by following my money bucket plan your buckets won’t leak and you’ll be a better money manager than most adults.

Seriously!

Okay, let me get one thing clear:

I am not saying you need to use plastic buckets that your mum puts beside your bed when you’re going to spew. That would be kind of weird (even for me!).

Money buckets are just a simple way to think about where your money goes.

Instead of an actual bucket, you’re going to keep your money in jars, or envelopes or perhaps in a bank account.

Get out your jam jars to create three money buckets.

Here’s what you’ll need to set up your buckets with Jam Jars:

● Three containers — Use whatever you have around the house as your three ‘buckets’: old jam jars, envelopes, plastic pockets and so on. Your parents might have decided to pay you using a bank account, but you could still set up your Splurge bucket as a wallet.

● Pens, pencils, coloured markers. Now for the fun stuff — it’s time to decorate your money. I want you to draw up three labels that say SPLURGE, SAVE and GIVE and stick them on your containers.

Here’s what you need to do to set up your buckets using a bank account:

When you get a bit older you’ll graduate from using jam jars or envelopes to having your own bank account. A bank is a place where people store their money. The bank then gives you a plastic card to access your money, which you keep in your wallet or purse. You then pull it out and tap at the register in the shop to buy stuff.

The bank sometimes charges you a yearly fee for keeping and protecting your money, and they also reward you for saving by paying you some ‘interest’. This is when they top up your savings with a little bit more money . . . just to keep you interested!

Your parents will already have a bank account that they probably access via a card and an app on their phone. Most banks only allow older kids to set up their own bank account, so it pays to do your research.

Here’s what to look out for:

● No bank fees: You don’t want to be charged any fees from the bank. That means no account-keeping fees, and no ATM fees (for when you use an ATM to get your cash out).

● Multiple savings accounts: You want the option to set up multiple savings accounts. In fact you need three, because these accounts become your money buckets. Name them SPLURGE, SAVE, and GIVE.

MY TIP?

The first thing you should do is google ‘best Aussie bank accounts for students’.

Do your jobs!

Once you’ve done your jobs really well . . . all of them, plus your Parent Pleasers and you get your first pay then I have a very important step for you to complete.

Are you ready?

Alright, now I am ordering you to go out and SPLURGE! Chocolate? Lollies? Pokémon? A fart cushion? Pens? Something online? As long as your parents approve, the choice is yours.

You’ve worked hard. You’ve earned it. So enjoy your splurge

Oscar is a Barefoot Kid.

Meet Oscar, he’s a Barefoot Kid

My mum pays me $7 a week for doing my three jobs. Splitting my money into three buckets means I always have money for the stuff I want!

My favourite thing to SPLURGE on is Pokémon cards!

I did extra jobs around the house and bought a really cool Bakugan with the money in my SAVE jar.

I use my GIVE jar to give money to poor people on the street so they can buy food and blankets.

Kids Q&As

Q: Who gets to decide what jobs I do?

A: You get to suggest the jobs, your parents get to decide (they’re the ones

paying, after all!).

Q: But I already do this using jam jars!

A: That’s great! You’re at the head of the class. Go eat some jam.

What about buying stuff online? How does that work?

That’s up to your parents. The easiest option is to give them some money

out of your SPLURGE bucket, and they’ll buy it using their account.

Q: Should my parents pay cash or via a bank account?

A: It’s totally up to them. They’re the ones who are paying. Both work. In fact there are some special accounts just for kids that they might want to check out. The most important thing is to make paying you as easy as possible

Q: Do I really need three money buckets? Why can’t I just have one instead?

A: Yes, you do. It’s the only way to make sure you have money set aside to get what you really want. This isn’t just a cute idea for kids. I’ve taught my money bucket strategy to millions of adults, and every day someone, somewhere, tells me that it completely changed their life.

And it’s going to work even better for you, because you don’t have to spend years walking around with a hole in your bucket. You’re learning the right way from the very start.

Q: I’m 14 years old and I don’t really want to use jars and coins anymore. Mum said I should get a bank account but I don’t know where to start.

A: Congratulations! It’s a great idea to graduate from jam jars to a bank account.

A bank can reward you for saving by paying you some ‘interest’. This is when they top up your savings with a little bit more money . . . just to keep you interested!

Your parents will already have a bank account that they probably access via a card and an app on their phone. Most banks only allow older kids to set up their own bank accounts, so it pays to do your research. The first thing you should do is google ‘best Aussie bank accounts for students’.

You want to make sure your bank won’t charge you any fees and give you the option for multiple savings accounts. In fact, you need three, because these accounts become your money buckets (remember? They are called SPLURGE, SAVE, and GIVE).

A Note to Parents and Grandparents …

Let me be straight: most parents who pay their kids pocket money are only doing it half right.

Getting them to do a few chores and paying them a few bucks is only the first step.

The main money lesson comes in what they do with their pocket money.

It’s standard practice to use three containers to teach kids. There are fancy options like Moonjar Australia’s three-part Save, Spend and Share money box and US-based financial guru Dave Ramsey’s Smart Saver Bank, which does the same thing.

If the whole idea of dividing your money into three sounds familiar, you’d be right. If you read The Barefoot Investor, you’ll know that I have the simplest money management system going round. In fact, it’s so simple I sketched it out on the back of a serviette on my very first Date Night with my wife. Which is why I call it the ‘Serviette Strategy’.

Well, you’ll see jam jars are the new buckets for kids.

After all, the point is they will transition from the jars to bank accounts when they’re older.

And there’s power in kids being able to see they’re using the same kinds of accounts their parents have.

Remember, having a plan for teaching your kids about money isn’t about corrupting them, or making them obsessed with money, or turning them into snooty, spoilt money-grubbers.

It’s the opposite.

For me, money is about values:

It taught me about working hard and doing a good job.

It taught me about setting a goal, saving for it, and spending wisely.

It taught me about the life-changing power of giving … the amazing buzz I get from helping people.

And it’ll do the same for your kids, too.

teaching your kids about money isn’t about corrupting them.

Hi Scott,

Just want to say thank you for the super engaging book you wrote that has already captivated both my 10 and 12 year old girls. They were so excited that a delivery came for them (it’s usually a box of wine for mum and dad) that they ripped the box open and begun reading straight away. The afternoon started with a bit of snickering and chatter and even some excitement about the stickers and tricking mum and dad.

Then the 10 year old borrowed my phone to set up a reminder for me to let her do some jobs and took a page from the “weekly meal planner” and replaced “meal” with “job”. Not long after, I got off a work call and heard an eerie silence...found the kids tucked away in my bedroom reading with the door closed. When asked why they were in there it was because I was being too loud and they couldn’t concentrate!

I’ve just been “pitched” and another sticker has been earned already! And now they are updating their jam jars because the last ones they had were too “kiddie” (they did them about 4 years ago).

I can’t wait until they go to sleep so I can have a peak at this book.

Thank you! Love what you do...

Heather

Next week

You know what’s even more exciting than seeing a couple of shiny gold coins sitting in your jam jars? LOTS of shiny gold coins sitting in your jam jars! Next week’s step is where the real money’s at, and I reckon it’s the best one of all. So, get ready for the next step in your journey because you’re about to get a promotion.

Originally published as It’s time to set up your money buckets as part of the Barefoot Kids summer challenge