As a parent, you may feel like you’re on your own when it comes to teaching your children about money.
I know, because I’ve been there.
We really want to help them grow into smart decision makers, but we really also want to buy them that $11.00 toy they can’t stop talking about.
But if we want to help our children learn the value of money, we have to be comfortable talking to them about money.
Yet as parents, few of us are.
When we talk about money with our children, it seems like we talk right over their heads. How could our 9-year-old possibly understand the discipline it takes to setting up a budget, paying the mortgage on time, adequately saving for the future… all while being generous stewards with what God gave us?
As a result, many of us avoid talking about money until our children “are older” and well, that conversation ends up happening far too late for many of us.
“Parents are the number one influence on their children’s financial behaviors, so it’s up to us to raise a generation of mindful consumers, investors, savers, and givers.”Beth Kobliner
Here’s what I think Beth is trying to tell us: whether we like it or not, we are the number one influence on our children’s spending habits. Our children see others spending money, but they don’t see the behind the scenes of it all… and that can really confuse them. But when we intentionally teach our children about money, and how we should be spending it, we can set them up to be successful financially.
But how do we go about setting up our children for financial success?
Little by little.
When do you start? Now.
And you can do this.
Here are 3 exercises you can do this week with your children to help teach them about money. These exercises are aimed at elementary aged children, but you can adapt and adjust accordingly.
#1: Spending Exercise – Give your child $5-$10 to spend and take them somewhere to spend it. Let them only buy what they can afford, and once it’s gone, it’s gone.
This exercise will begin to help your child understand the value of money and how quickly it can be spent. Helping a child think through spending decisions is one of the best gifts I feel I have given my children (now 14 & 18 years old).
Like most of us, they spend money on frivolous things. However, they are equipped to think through the purchase:
- Is it worth it?
- How much money will I have left?
- Is this something I will really use?
- Is this something I really want or really need?
As a parent, you cannot begin these conversations too early.
The hardest part of this is letting them spend the money even if you do not agree with it or know they will have ‘buyer’s remorse’ tomorrow. But this is all part of the learning.
I have helped ‘guide’ my children out of a few purchases along the way, but ultimately, it has to be their decision.
We all learn best from tough circumstances; especially if our decision causes the bad circumstances.
#2 Saving exercise – Give your child a small amount every day and make them put it in a visible place. Help them “wait” and not build patience to purchase something they really want.
Saving is not something I am good at. I have gotten better as I’ve gotten older, but maybe like you, there are for sure times that ‘money has burned a hole in my pocket’. Therefore, I’ve learned that teaching our children to save is an amazing gift. This is certainly tied to the first exercise.
Help your child think through a purchase decision today because whatever they spend today will not go into savings and will prolong the purchase of something they really want.
Many of us have used the old analogy, ‘saving for a rainy day’ but I am not sure a child can grasp that concept or that it really applies in this instance.
Children can however grasp delayed gratification.
My son wanted an iPad when he was 10 years old. We decided not to buy that for him.
But we did tell him he could purchase it on his own once he had enough money.
I was in the process of teaching him how to mow grass, so he began mowing grass for the neighbors. He did end up making enough money for the iPad purchase, but it was a struggle for sure to keep him from spending the money on smaller and often frivolous items.
The cool part? He still uses the iPad today (even though it is 8 years old).
A lot of lessons in this one.
#3: Giving exercise – Surprise your child with $10. Later, present an opportunity where their $10 could really help someone else.
“It was never really yours anyway”.
This is line with the parable of the talents. Have you read that one? Check out Matthew 25:14-30 if not.
It is a great opportunity to teach our children that the money given to us (or earned by us) is not really ours.
Everything is a gift from God and how we steward those gifts is a direct reflection on how much we love and respect God who is the provider of all things.
Once your child really begins to really get impatient about spending the money, take a moment to read the parable with your child and teach for a few minutes. Then, encourage them to use the money in a way that could help solve a problem or further a good cause.
Whether it is giving to a homeless mission, church, or to someone at school who is raising money for a good cause, the lesson learned here is a lifelong one.
It is better to give than to receive.
I look forward to hearing about how these exercises play out within your own home. Give an exercise a try this week and come back and drop a comment to let me know how it went. You might even encourage someone else to teach their child to be generous!