Teaching Children about Money

Lord willing next month we will welcome our fifth grandchild into the world. If she is anything like the other four, she will be nothing but pure joy. Over the next twenty years there will be a lot of concern about her learning all sorts of things from how to walk to how to live in a very complex world. I am so thankful that many of the things that she will learn will be based on the Word of God. But how much time will be spent on teaching her the principles of what the Bible says about money?

The Bible is clear that we should…"Train up a child in the way he should go, even when he is old he will not depart from it" (Proverbs 22:6). Isn’t it interesting that we seem to be concerned about teaching them about the birds and the bees, how to earn a living and be polite, but we spend so little time instructing them about how to handle their money? Yet the Bible is clear that how they handle money could result in a lifetime of bondage (Proverbs 22:7) or a life without sorrow (Proverbs 10:22). God is concerned about how we handle money (Luke 12:34) and it is our responsibility to teach our children and grandchildren the principles of God’s Economy.

So how do we do this? Well here are a few ideas that could be starting points. I would love to hear other ideas you may have.

Involve children in family finances. This is a lot easier said than done. We like to keep our money private; however we need to lead by example. I would encourage a time to discuss finances as a family at least once every three months. With our family, we found during family devotions was a good time. Some nights our family devotions were more like a “family meeting” as we included a wide variety of topics and one of those was family finances.

If you are beginning to live on a family budget or trying to control impulse purchases, it is much easier to explain this in “family meetings”, than in the car every time you pass a McDonalds with a car load of hungry kids. Use those “family meetings” to help children understand that if you are buying a pool this summer, you will not be able to afford a vacation. Let them experience the joy of paying off the car loan and credit cards with you.

Children understand more than we give them credit for, especially pre and early teens. Involving them in the conversation and decisions will yield tremendous dividends in unity in the family, self-confidence with finances and training for adult stewardship responsibilities

Start early and start simple. As soon as your children have the opportunity to handle money, get them set up on a very simple three category spending plan. The money may come from a number or sources such as chores, allowances or gifts. By using three banks, jars or envelops make sure they have a simple plan to manage their money.

The three starting categories would be giving, saving and spending. As they get older add categories such as clothing, entertainment and even automobile (assuming they are old enough to drive ). Even if you are funding some of the categories, like clothing, let them learn the consequences of buying designer clothes vs. buying the same thing at Wal-Mart for 1/3 the price.

Get money in their hands. I have been in many discussions about paying children for chores. I have also heard the concerns of giving children an allowance with no responsibilities attached to them. But the important thing is to get the money in their hands so they can learn how to handle it. You can’t teach a person how to drive without an automobile.

I personally prefer a combination of some paid chores and some unpaid chores that are their responsibility as a family member. In addition to the chores, I suggest a small regular allowance. But above all don’t give them the keys to the car (money) without the proper instruction.

Practice family giving. Christmas is a wonderful time to pick out a family or ministry in need and share as a family. But this family sharing can be done anytime throughout the year. Pick a ministry that might be age appropriate for your children (youth ministry, camping ministry, adoption ministry, missionaries with children) and encourage your children to give to that ministry and together as a family talk about how God is using your contributions.

Remember that society will make sure our children learn about political correctness, gay and lesbian lifestyles and a host of other things that are either unimportant or an abhorrence to God. Things that are important to God such as how we handle our money (Matthew 6:21) will be neglected by society and must be taught by parents and grandparents.

I would love to hear of some other ideas on teaching children about money.