One of our main roles as parents is that of an educator.  While there are many things that we allow our children to learn about at school, we know that money management is not a priority at most schools around the country.

     With that in mind, it is important that we play an active role in helping our children obtain the skills that they will need to be financially sound adults.  This is not a skill that can be learned overnight, so it is imperative that we start to apply these principles to their lives early.  While we can show them by talking to them and leading by example, they also need hands-on learning.  Consistent practice will lead to developing good habits.

Proper divisions

     Our children should know how to divide any money they receive into three categories: tithes, savings, and spending.  If we show our children how to tithe off of their $1 bills, it will be completely natural for them when they start earning $1,000 paychecks.

     We should impress upon our children that God is the source of all of our increase.  It is only right to give Him His tenth.  We can also use the opportunity to teach them about helping those who are less fortunate than them, whether they are donating money to a particular cause or giving away toys and clothing that they no longer use or need.

     Our children should also put aside a portion of their earnings for savings.  They can create both short term and long term goals that they would like to accomplish, such as saving for a special toy that they’d like to buy or saving for their own college education.  Learning to save well in advance will keep our children from getting into pitfalls like debt.

Allow them to earn

     We cannot fall into the trap of giving our children everything that they ask for.  I have personally seen the disasters that result.  These children are much more likely to grow up to be irresponsible adults who expect everything to be handed to them.  They may place a high value on materialistic things and look to these items for a sense of self-worth.

     Rather than giving our children everything they ask for, we should develop some type of allowance system that teaches them the value of money and helps them learn that they must earn the things they want.

    Many children have a misconception about money.  The ATM machine will not dispense money if there is none in the account.  They don’t fully appreciate that we go to work every day to earn the money that buys the things they ask for.

     For example, children may not fully understand the difference between a $20 CD and a $200 video game system.  A gift is a gift to a child; the price is often irrelevant.  As parents, we have to help them differentiate between the two.

     If, for example, the child’s allowance is $20 a week, they will quickly learn how to budget their money.  They will see that it takes one week to get a CD, but it takes 10 weeks to get a new video game system.  Our children will have a greater appreciation for the things we give them, and they will be more selective in the things they ask for.

     The sooner we begin teaching these very important skills, the better off our children will be when they have to face the real world without us.

     God has provided us with a great responsibility as parents.  While important, our focus should not be strictly on preparing for a long retirement.  We have been chosen by Him to teach our children how to live as respected Christians.  Paul reminded us that we are the driving force in our children’s lives.  Paul told us in Ephesians 6:4, “Fathers, do not exasperate your children; instead, bring them up in the training and instruction of the Lord.” (NIV)  It is up to us; society and our schools cannot do it for us.

Talk to them

     We need to talk to our children.  When Moses received the Commandments, the Lord instructed us to teach our children constantly.  Deuteronomy 6:6-7 reads, “These commandments that I give you today are to be upon your hearts.  Impress them on your children.  Talk about them when you sit at home and when you walk along the road, when you lie down and when you get up.” (NIV)

     Communication is important to their development.  They should learn about life from us, not the streets or television.  They need to feel comfortable coming to us about anything, whether good or bad.  As parents, we have their best interest in mind, and advice should come from us, not their peers.

     We should be talking to our children early on about the importance of finances.  This information is not taught in the schools, especially from the Christian perspective.  Since the media do not provide positive information, we need to be on the offense in teaching our children so that they will be ready to defend themselves when they step out on their own.

Be an example

     Talking isn’t enough.  We also need to lead by example.  If there is one thing I’ve learned about being a parent, it is that children are quick to imitate what they see.  I have to be very careful about what I say and do around my daughter because she often imitates my behavior.  However, I can use that to my advantage by showing her the right way to manage finances.

     Our children should see us budgeting our money and paying our bills on time.  They should see us using credit cards only to the extent that we can pay them off in full when the bill arrives.  They should see us living below our means rather than trying to keep up with the Joneses.

     We should also show our children that we are responsible for the bills we create.  What kind of example are we being for our children if we ask them to tell the bill collectors that we’re not home?

     While we may come from households where parents did not discuss the household finances with children, we do not have to carry on that tradition.  Children seek direction and guidance.  Our children are eager to learn, and we can be their best teachers.  We can show them what to do – and what not to do.

     We don’t like tainting our children’s image of us.  But, they should know that we are not perfect.  Let’s be genuine with our children and allow them to learn from our mistakes.

     Parenthood is a truly amazing experience.  In essence, as parents, we are responsible for a tiny, helpless human being.  Over time, our children do grow up and develop skills toward self-sufficiency, but the type of people our children become has a lot to do with the instruction we provide to them.

     Proverbs 22:6 tells us, “Train a child in the way he should go, and when he is old he will not turn from it.” (NIV)  While the Bible may not be speaking specifically about finances in this verse, money matters are a part of life.  Teaching money management skills is an important area that should not be overlooked as we prepare our children for life on their own.

     There are several financial lessons that we can share with our children.  The idea we discussed last time – about preparing a budget – is best learned when young.  Let’s look at three more lessons we can teach our children.

Proper allocation of financial increase

     Every time that we get paid, there are numerous things that we have planned for those funds.  While the tendency is to pay our bills and squeeze in some fun time, we want to make sure that we are teaching our children the biblical way to allocate our increase.

     Tithing should come first.  The tithe is 10% of all increase.  It is our way of thanking God for providing the resources and helping to further His Kingdom.

     On top of that, we should also make sure to pay ourselves.  The general rule of thumb is 10-10-80.  We tithe 10%.  We put 10% into savings.  We spend the remaining 80%.

     Our children should understand this concept from their first dollar.  Break it up into 10 dimes.  Have them decorate 3 jars, one for each category.  Have them put one dime in the tithe jar, one dime in the savings jar, and the remaining dimes in the spending jar.  Let them know that they are free to reallocate the 80% into either of the other two jars if they wish.  But there should be no diversion of funds from the first two jars.

Money should be earned

     How many of us are able to pull funds out of an ATM at our leisure?  It’s not very likely, right?  If we don’t put money in, then it will be difficult to pull money out.

     In the same manner, we should teach our children that we are not walking ATMs with an infinite access to cash.  Every dollar that we give them for their needs and wants comes from the hours that we put in at work.  Since we work for the money we bring home, we should teach them to work for the money they hope to use to buy the things they enjoy.

Delayed gratification

     We live in a microwave society.  We want everything right now.  However, we are not able to get everything that we want when we want it.

     We should not give our children a false sense of reality, either.  Sometimes, it takes saving money for long periods of time in order to build up enough to get the things we want.  Show your children how to plan ahead and aim for big goals.  Help them create a dream board and show them how to save up for those things.  It will help their motivation and prepare them for a successful financial outlook in adulthood.