“Do as I say, not as I do.” Even if you as a parent have not uttered this phrase to your children, there is a good chance you heard it from someone in the past. But ask yourself, is my handling of our family’s finances shouting the same message to my children?
I often get asked about how to talk with your children about money. There are a number of step-by-step experts out there with endless opinions on the correct way to teach your children about personal finance. I hate to be the bearer of bad news, but, regardless of what guru you decide to follow, your children will most likely glean most of their knowledge about personal finance from watching you. Have you started sweating yet?
It is easier than you think to start a financial revolution in your family; one that will transcend generations. But, it all starts with you. You have to be an example for your children.
Where to Begin?
I believe it all begins with the acknowledgment that everything we have, possess or earn belongs and is provided by God. We are expected to be faithful stewards of God’s resources. Once we accept that, we can earnestly instruct our children about God’s plan for their finances.
I am always amazed at the generosity of children. But do we adults unknowingly dampen or snuff out our children’s enthusiasm for giving to others?
Several years ago, my church was leading a campaign to build new children and youth facilities. Children at church had lessons on giving and stewardship. One evening at dinner, we started a conversation about giving when my 4-year-old son announced that he wanted to give all of his money to help build the new building. Of course, I was proud but I also had to bite my tongue to keep from blurting out my reflex reaction….which was to not give away all of his money. That’s how adults think. But, that day I learned a lesson from my son.
Create a safe environment for giving in your home. Encourage your children to give back to those in need first. Help empower them to give back with the limited means they have as children.
Recently, I met a young man in his early 20s who had accumulated quite a significant amount of savings for someone his age. He said he learned most about money from his grandfather when he was very young. He started early and kept at it. Saving is a discipline best learned early in life. If your child starts strong saving habits before they are over-exposed to our materialistic culture, they will have a better chance of carrying those good habits throughout life.
Discourage Use of Debt
Now it is unlikely your toddler is asking for a second lien on their tricycle but the concept of debt is exposed to children at an early age. Have you seen the Shopping Spree Barbie doll? She comes equipped with her own credit card with a $500 spending limit which resets to $0 when she runs out of money. I have a hard enough time explaining my way out of getting money from the ATM let alone how Barbie stays solvent.
The fact of the matter is that our children will most likely adopt the debt philosophy of their parents. Our family’s goal is to live debt-free and I hope to instill that in our children.
Lifestyle Comes Last
When we adopt an attitude of stewardship, what we have left over to fund our lifestyle is a blessing for our enjoyment. For children, I recommend establishing goals for savings. Most kids respond well to an object-oriented goal such as that toy they have been wanting.
For young children, set up a few mason jars labeled Giving, Saving, and Spending. If they are earning money or receiving gifts, have a plan for how much they should set aside for each of those categories starting with Giving first. As they mature, you may want to think about opening up a savings account at a local credit union, which has programs designed to encourage your child to save even more.
Children who are grounded in biblical wisdom for their finances become adults that live out those principles in practice. Talk with your children about being a good steward and revolutionize your family’s finances.