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.
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?