3 Principles for Teaching Your Kids Finances

As the hot California sun streamed down, I huffed and puffed on my knees along the rock-walled flower garden. Weeding those rocks was a chore I hated. Not only was it grubby and uncomfortable, but sometimes big scary spiders were lurking in the weeds – anathema to a little 7 year old like me. (Actually, big scary spiders are still anathema to me!)

So why was I sticking with it? Because Mom and Dad promised my sister and I weekly allowances if we completed certain chores – one of them being the weeding of the rock wall.

It was so exciting when we got our allowance on Saturday (assuming the chores were satisfactorily completed). My sister and I each had a piggy bank on our dresser. Hers was a little fat pink pig and mine was a lovely green pig. The CHINK of the coins dropping in was such a satisfying sound.

Each Sunday, we felt excessively generous as we plinked our little coins into the offering plate. I can still remember the sudden grins of the deacons as they watched us importantly drop in our nickels and pennies. The story of the widow’s mite in the Bible always made me feel that God would probably do something amazing with my little ten cents – maybe save an entire continent or fund a new Bible translation or something.

And the part of our savings that we got to spend was fun too! After several weeks of savings, Mom would take us to the store to buy a toy or a candy bar with our very own money! Oh, how we agonized over those choices. After all, once our $2-$3 was gone, it would take several more weeks of chores to build up the savings again. I still have some of the little dolls and doll clothes I bought with that money. (I don’t have the candy bars any more though.)

Why do I share this story? Because learning how to manage money wisely seems to be a lost art in our culture. Parents themselves often are confused about how to properly save, spend and give. So they find it difficult to come up with a good way to teach their children these things.

While I certainly wouldn’t say that running a household’s finances is easy and simple, I am here to say that teaching good financial habits to your children can be simple. There are lots of good curricula, ideas, printables and internet blogs about how to do this. But the basic principles are free and you can easily adapt them to your own family.

Principle 1: All hard work brings a profit. 

That’s not my idea, it’s actually in the Bible. (Proverbs 14:23) Starting when they are just out of toddlerhood, all children can be taught this principle. Though contributing to the family through chores should never be completely on a mercenary basis, it is appropriate to designate certain extra chores or tasks as money-makers for your children. Since you want to teach them that shirking this work leads to no profit, it’s best to pick out some tasks that don’t absolutely have to be done every week.

Children need to learn (as do adults, and our government) that true profit only follows hard work. Get rich quick schemes rarely work long-term, as we who are older and wiser know. But the person who puts in elbow grease, who is willing to learn, who wants to improve their skills, who can take orders from a boss, who can properly complete an assigned task – that person will nearly always find a way to make money. Teach this principle with age-appropriate tasks you are willing to pay for.

Principle 2: Delayed gratification now means more satisfying gratification later on. 

Or in other words, saving money today means you can buy something really cool tomorrow. Helping your children learn to save up for things they want is an excellent way to counteract our instant "microwave" culture. Children today are so used to having everything NOW that parents often have to actively find ways to teach this principle.

Help your children choose age-appropriate goals to save for. Little kids may find it hard to save for a long time, so choose less expensive items for them. Older children and teens, however, should learn to be able to save for months (or even years) for something they really want. Mom and Dad can offer to match their savings, but Mom and Dad shouldn’t always be stepping in to make up the difference if Johnny isn’t disciplined enough to save.

Principle 3: God loves – and blesses – a cheerful giver. Help your children choose an amount to save for tithing and a place to give their tithe. Obviously the Bible instructs us to support the pastors and teachers who feed us at church each week. But you can also help your child look for other opportunities to give. Maybe they can fund their own shoebox for Operation Christmas Child, or perhaps they can purchase a toy to donate to a Toys for Tots drive. Help them learn the joy of giving, and remind them that God is blessing them by making them able to earn money.

The awesome thing about these three principles is that they don’t just apply to money. 

They apply to all of life. For instance, do you want a good relationship with another person? Put in some hard work, be willing to delay gratification, and give cheerfully – and see if that doesn’t improve any relationship out there! These are actually fundamental principles of living that bring peace, wisdom and dignity to everyone who applies them.

Make it practical: As your children learn and grow, continue to apply these principles in a practical manner. It doesn’t necessarily take a super-duper curriculum or intricate plan to teach basic finances to your kids. Simply introduce them in an age appropriate way to things like bank accounts, writing checks, making (and following!) a budget, running a small business, and generally keeping track of income and expenses. Let them see you doing these things on a regular basis as well.

 People who complain about how decadent our government or culture is often forget that “the government” and “the culture” are simply made up of people like us. We the people need to recover biblical basics like hard work, delayed gratification and cheerful giving. When we do, our culture and our government will change for the better. But it all starts with one family at a time!

Written by Heather Sheen