The Jewish jar is a system used to teach children financial discipline from as early as the age of 2, once the child begins to talk. Although the principles are drawn from the Holy Bible, it doesn’t matter if you are non-religious. What we actually need to understand from this system is the underlying principle behind it that has made it yield tremendous results across many Jewish generations.
In every Jewish household, every child keeps five jars, which are carefully labeled as Tithes, Giving and Offerings, Savings, Investing, and Spending. If a Jewish child gets $10 as a gift from someone, the child is expected to deposit $1 in the jar labeled Tithes, another $1 in the jar labeled Giving and Offerings, and another $1 in the jar labeled Savings. $2 is expected to go into the jar labeled Investing, while the remaining $5 is expected to go into the jar labeled as Spending.
On Sundays, when going to worship in the temple, the child opens up the Giving and Offerings jar, and from the money gathered in the jar, they give alms and offerings in the temple. The Tithe jar is opened at the end of the month with all of its proceeds given to the temple too. The content of the jar labeled Savings is only open when there are special happenings in the family, e.g., when there is a big need in the family. When the jar labeled Investing is full, the child is allowed to open up the jar and decide where to invest the money. The parent does not help the child with the decisions they make regarding where they want to invest their money; they allow the child to choose what they want even if they know that the child will fail. The jar labeled Spending is the only jar from which the child can buy whatever they need.
LESSONS FROM THE JEWISH JAR
1. Tithes – The tithe jar teaches the child to take on financial responsibilities and debt management. It teaches the child to handle monies belonging to other people responsibly. Tithing is compulsory for Jewish people so, the child knows that it is a debt that they owe and must not spend the money in the tithe jar for any reason. Instead of tithing, you can setup this jar to help you pay off your debt and other compulsory monies you have to pay.
2. Giving and Offerings – The jar labeled giving and offerings teaches the child to set aside some money to help others in need. It teaches them to be generous and to give to charity which, is a very healthy practice that positively affects the child.
3. Savings – The savings jar teaches the child to put away some money for savings until the time when they’ll need it. It could be targeted to meet a particular need, or for emergencies. Savings guarantee that the child will not fall into debts before they can buy whatever they need.
4. Investing – The fourth jar labeled Investing teaches the child that they can grow money. Not as they would a plant, but will show them how they can make their money double with time.
5. Spending – Jar five, which is labeled Spending, is the very last jar. This jar teaches the child to set out other monies asides first before dipping into the money to spend. It means the child knows that before spending any dime, they must take care of all financial obligations, and set apart money for savings and investments.
The underlying principle behind the Jewish jar example shows us that the Jewish children are allowed to exercise power to make decisions and take responsibility for their decisions. Through the use of their jars, Jewish children become very familiar with money and gain healthy money habits. They also know that by making wise decisions and taking on responsibility, they can gain more success.
I am not a Jew, neither do, I practice tithing and giving offerings, but I have found the Jewish jar example to be a very good first step to understanding how to deal with and manage money.
The Jewish jar example employs a simple strategy that can help you understand savings, investments, assets, compound interests, and other important but basic financial knowledge you need to begin building wealth.