I am a mom with two absolutely precious children. My job is to raise them to become fully functioning, taxpaying adults. The taxpaying part is especially important since my husband is a Certified Public Accountant.

Recently, as I was busy working around the house, I came up with a question: “What if my kids do not learn to be responsible about money? Since it is my job to raise them then how can I teach my children to be self-sufficient law-abiding citizens around their money?” Seriously – there is so much to learn about the ins and outs of making money, saving money, spending it and, most importantly, paying taxes. That is a lot of information for children to learn and truly understand and I was not certain how to teach them about it. I could not recall what my parents had taught me beyond – go get a job.

So, there I was a few days later plopped in front of my TV taking a break from my day when the answer to how I was going to teach my kids about money. Oprah was doing a show on teaching children about money using three jars. I was so impressed and excited by this system that I knew I wanted to use something like this for my kids. Immediately after the show I called my husband to tell him about it. Shortly thereafter, we came up with our own version – here it is.

I set up four mason jars for each of my children and each one of them is marked for the different categories and kids’ names. The system helps them divide their weekly allowance, and any other money they get like gifts etc. into four categories. The first jar is marked “Spend”. This jar is for the kid and it is the money they can spend on whatever they want. I have taught them that this is where the money to pay for owning a home and food would come from if they had to pay a mortgage and buy groceries.

The second jar is marked “Charity”. Ten percent of their money goes directly into the jar and throughout the year they give it to a charity of their choosing. (You do not need to do this one; however I think it is a good idea to start teaching children about social responsibility at a young age.) The third jar is for savings and is labeled “Savings”. In this jar I have them put twenty five percent of their money. I know that you are probably thinking that twenty five percent is a lot, but it is only twenty five cents of every dollar and it teaches them to save money before they have a chance to think about spending it. It also helps them save for big things that I will not buy for them. I have also told them that this is probably where their money to buy a home would come from. Once they get over $50 in this jar, I put their money into a real savings account for their college fund – or for down payment on a home or a car in the future.

The last jar is for taxes and has a label “Taxes” on it. They are taxed at fifteen percent. (I wish I could get Uncle Sam to do this for us.) They are not too happy about this one and we do get the occasional tantrum. I think it is better for them to learn about paying taxes now than to find out the hard way later. Since they are still pretty young, I have not really tried to teach them about the tax advantages of owning a home, but I figure this will come when they get into high school.

When one of the kids asks for something that is not in their budget, I tell them to see if they have enough in their “Spend” jar. If they do not and they do not stop begging, my husband and I become their creditor. For this they get an “I owe mom and dad” and we put a slip of paper, like their loan paperwork, in their “Spend” jar. They are charged 1.5% as well. I think its funny, but they do not like to “owe” us. They usually pay us back pretty quickly.

With this system in our household, my kids have a head start on the concept of saving money and living within their means. I get pleasure out of knowing that they are learning concepts growing up that will last the rest of their lives. I wished that I would have been taught this way about money, I might not have gotten into debt at such a young age (I did get out of debt). I would like to thank Oprah for inspiring this training idea. For those reading this article, I advise you to try it or develop your own; feel free to use any or all of my ideas. They really do work.

Written by Jennifer Janek-Markey. CEO of her own soap manufacturing company. She is also an Author, Wife and Mother of 2. Jennifer is a freelance contributor to GetPreQualified.com, a mortgage, real estate, and credit education web site. In Jenn's spare time she prepares taxes in her husband's CPA firm ...