Teaching Kids About Money & Stewardship

The following guest post was written by Philip Dean. Phillip runs RandomActsOfParenting.com – a parenting blog to help you enjoy the lighter side of parenting and supplies ample opportunities for both laughter and encouragement.

How can we teach our kids about money and about being good stewards?

We all know the importance of being good stewards. We understand the benefits of a budget and the peace of mind that comes from being debt free, even if we haven’t mastered either. Many of us can also explain the difference between a stock, mutual fund, and an annuity. We know lots of things. We even practice many of them. Why then is it so hard for us to teach our kids about money. Why are so many of our kids making the exact same mistakes we did as young adults? Well now, aren’t those good questions? I don’t know that I have all the answers, but I do know of a few things that will help our children gain a Biblical view of money and how to master it instead of being mastered by it. Let’s look at a few:

Utilizing the Allowance

My wife and I decided our children will get an allowance. It isn’t free money though. They are expected to do their chores without complaining and on time. We don’t use our kids as slave labor, but they are expected to help around the house and be contributors to the health and cleanliness of our home. This helps them learn that money is not easy to come by and requires hard work to obtain. This is a worthy lesson for anyone.

Levy Some Responsibility

Older children should be given an allowance large enough for them to be responsible for some of their purchases. This may look like requiring the high school student to buy their clothes out of their allowance or even an elementary student buying school supplies. Be sure to provide an allowance suitable for this. This gives many great opportunities for them to learn responsibility and the purchasing power of money. Do they really need the $75 pair of jeans? What will they have to give up to be “in style?” There is always a limited supply of money. The earlier they learn to make wise decisions and understand delayed gratification the better.

Require Giving

We tend to naturally give out of our excess. It is important to teach our children to give first then buy for self. Set down with your child or children and work with them to find where they would like to give. It may be to your Church or to a local non-profit. They may pool their resources and sponsor a child through Compassion International or World Vision. Regardless, as soon as they are old enough to receive an allowance they should be learning how to give back to God.

Budget as a Family

This is probably one of the harder things to do. We like to keep our money private or at least quiet. However, we need to be an example for our children. To do this, sit down as a family and have a monthly or quarterly budget meeting. This lets them see that the requirements you are imposing on them are also imposed on you. It helps them see and understand some of the challenges and trade-offs required in keeping a budget. It also is a great way for them to learn by experience (yours) and not make similar mistakes as they grow up. If they don’t see how to manage their money and be a steward from you, they will get it from the TV. Where would you like your kids to learn the basics of money management?

Made Decisions as a Family

Kids, especially older ones, understand much more then we give them credit for. It is important to include them in money conversations and decisions. This also shows them that they are an important and active part of the family. I am not saying let them run the show, but seriously consider their input. If you are considering forgoing a family vacation to pay off the remainder of the car loan then talk about it as a family. Listen to their thoughts and concerns and use this as an opportunity to teach and learn. You may be surprised by their perspective. As they see how you make decisions and include them in these conversations they will be much more likely to come to you for advice with their decisions.

I am sure there are other ways to develop good stewardship in our kids. These are a few that have been very helpful in my life. I am now using them to teach my own kids. There are no guarantees when it comes to kids or money. However, if you are proactive and open with your finances you will provide the role model your kids need to learn how to be Biblical stewards of their money. It isn’t easy, and it isn’t natural, but it is worth it.

Do you have any other ideas about teaching kids about money?

Ready to Quit Living Paycheck-to-Paycheck?

Just click to join 163,000+ others and take our FREE email course to better manage your money, pay off debt, and save!

  1. Adventure-Some Matthew

    These are great tips, and all very practical. I especially like the last one, make decisions as a family. I never knew what was going on, financially, in our family, and I believe that knowledge would have cleared up some confusion I had.

    I don’t have children yet, but this advice will come in quite handy when I do.

  2. Philip @ RAOP

    Thanks Matthew, I remember my parents setting us down and going through some of the decisions they were having to make. It really help me understand what my parents were trying to do and it obviously stuck with me. I hope and pray that my kids will have the same role model in my wife and me as I did in my parents.

    Glad you enjoyed the post!

  3. Olivia

    The buck stops here so to speak. I didn’t get training as a kid, so we’ve been consciously teaching our boys how to handle their finances. We’ve used the same suggestions you’ve made. Even if they make poor choices, (like not leaving enough clothing money for underwear and socks), they have a good framework to reference. They have a safe place to learn. Decisions won’t impact their safety. It’s scary to be on your own, without a net, and clueless.

    Another thing worth considering is teaching your kids basic skills, like threading a needle, preparing a recipe, rewiring a lamp, changing a tire, choosing a good vegetable, using power tools. Sure these have financial impact, but the more skills they master, the more confident they become to attempt new things.

  4. michele

    Our children also have chores that are required just because we are team. I would also “hire” them to do extra work. It lightened our load, taught them life skills, and taught them the value of working, earning, saving & spending.

  5. Adventure-Some Matthew

    I certainly agree with teaching kids basic skills. It amazes me how many of my fellow college students have no idea how to take care of themselves. Any time something goes wrong (flat tire, dead battery, hole in shirt, new recipe to try, cook anything not out of a box, etc) they have to call the parents or hire someone. Sure, you can’t do everything, but there are plenty of resources out there (books, websites, experienced adults) who can teach you to be more self-sufficient. As you said, this impacts life confidence and also the financial bottom line.

  6. Philip @ RAOP

    Well said Olivia! The time you take to teach these life skills will also go a long way to build your relationships. As the kids get older this is a great way to start transitioning from parent to friend / peer.

    Michele, I also agree with the “Team” approach. There are lots of ways to do it. The important thing is that the kids have a way to make money and have responsibilities with that money. There are some things our kids do just because it is expected. We don’t like to call those chores, those are just being part of a family.

  7. Excellent article! You definitely give some great, practical ideas for training children in good money management. My parents gave me an allowance and helped me to manage my money through it. My mother handled our finances and always allowed me to “help” her.

    @ Olivia, training our children in a skill is a great way to teach them personal responsibility, and will definitely help them as they grow into adulthood.

  8. Missy

    A lot of these are great ideas, but they seem like they are geared towards older kids. I will definitely be doing some of these when they get older.
    It is so hard to teach kids about money management starting young.

  9. Kiddy Money Mentor

    Great article and sound comments! Teaching kids of all ages about money has never been so important. With the recent credit crunch and ever rising living costs, it make us, parents think how important money skills are for our lives and how important it is to teach our kids about money. There are so many things parents can do to get the idea of healthy money habits to their kids. As comment above, including your kids into family budget discussions are a good way to start. I teach my kids everyday, everywhere about money. Happy teaching!

  10. It is a nice act to make kids used in handling money, with what they can do with it but reminder for parents; teach your kids about the danger that can be cause of money. Also share to them that according to the Bible, Money is being said to be the root of all evil.

    Sharing decisions as a family is also a great factor, let them feel that they are part of the decision making in the family. And the most important is to pray to God together for the strength of the family and for the kids to learn their lesson not in hard ways. Thanks for the article, it is a great help!