It is very important that you teach your children about money as early as possible. If you want your children to handle money successfully, you must teach them exactly how to be money smart.
If your children are young enough not to have picked up any bad money habits, you still have a chance to start out on the right foot. However, if your children constantly bug you for money or have no concept of its value, it’s time to make some changes, and QUICK.
Habits can be changed and money dilemmas solved. Every family is different in how they run their household, but there are some basic ground rules for teaching all children about money.
Learning Money Skills
You must take deliberate steps to teach your children specific skills if they are to handle their money responsibly, now and when they get older. Even if you feel like your upbringing in this area was poor, don’t give up, you can help your children start out on the right foot by teaching the following simple money skills:
- One of the first things children learn about regarding money. If you personally tithe and give an allowance, it might seem silly to expect your children to tithe in addition, but don’t neglect providing them with the opportunity to show their appreciation to God for His gifts. Even a young child can put money in an envelope and drop it in the offering plate at church or mail it to a favorite ministry or charity. be sure it’s clear that the money is not going back into your pocket, and show older children how to include tithing in their budget too. (Leviticus 27:30 – ” tithe of everything from the land, whether grain from the soil or fruit from the trees, belongs to the Lord; it is holy to Him.”)
- Spending money wisely
- Of course, this is the first thing children learn to do with money–spend it. It takes no time at all for them to learn how to exchange a quarter for some candy. But teaching them how to spend it wisely is the key. First, place limits on how much you give to them. Even if you’re someone with a disposable income or you feel guilty about the divorce, do your children this favor. It helps them understand that money has value and its supply is not endless.
- Secondly, give advice on how to spend smart. While the example you set for your children is highly important, don’t assume that they will pick up wise spending habits just through observation. Make them aware of prices. Teach them about coupons, discounts, sales, etc. Never purchase on a whim and always try to calculate your spending ahead of time.
- If your children are employed or have some source of income, it’s time to teach them a simple budgeting system. Begin by showing them your household budget, and let’s hope you have one. Not only will this give them a good idea about budgets, but it will show them how important it is to plan and know where each dollar is going. Let them create their own budget. Make sure they know how to set goals for purchasing larger ticket items. Budgets allow tracking of expenses and helps goals become attainable.
- The older children get, the harder it becomes to teach them good money habits. “You can’t teach an old dog new tricks,” holds true. Your children will get older and they will get used to buying what they want now. The key is to start teaching them as young as possible. If they are already in high school, don’t worry, start now. Identify something they really want, something you might normally buy them, and explain they will have to save and buy it themselves. But then don’t just turn and walk away. Go with them to their budget and show them how to save and how long it will take. Keep it simple and understandable.
- We grew up on writing checks, but now it’s Debit or credit cards. We swipe and barely give it another thought. It’s a simple way of life these days. Kids need to know that magical card (debit or credit) is NOT FREE money. Give them practical everyday examples in borrowing so they can understand if they borrow today, the money must be paid back at a later date. I literally just found out that my daughter thought a credit card limit was something the store gave to me and I didn’t have to pay it back. WOW, I’m so glad I recently hired her to be my personal assistant. She is learning a lot and asking more questions now. I took it for granted that she understood that process. BTW: She’s going to the 11th grade. So, don’t assume anything. Explain, explain, explain. Don’t allow them to borrow money from siblings because that can start a pattern. Also, there won’t always be someone around that they can borrow from and bail them out in the future.
Stay tuned for a future blog post on What age to start teaching about Money?
Any money ideas that you’ve learn over the past years? We’d love to hear from you