There are so many things to consider amid all the joy and stress of being a new parent, including teaching children the value of money and preparing for the future.
For example, planning for a college education begins at a young age, says Marcus Hall, a Christian financial adviser in Dothan, Alabama.
Countdown to college
His advice to parents: “Treat your child’s countdown to college like your countdown to retirement. Start more aggressive in the early years and adjust your portfolio to become more conservative by the time they reach high school.”
But there is another aspect to nurturing a child’s long-term financial fitness: don’t wait until the child is in high school to start teaching basic money management skills and don’t depend on someone else to teach them.
As in many things, parents must be intentional and diligent about teaching “financial literacy.”
Teaching your child the steps of financial responsibility begins with a good hard look at your belief system, experiences, what you’ve been taught and where you are financially.
To get started, consider these questions:
- Do you believe God owns everything (Ps. 24:1; 50:10; Hag. 2:8) and you are entrusted as a steward (1 Tim. 6:17–21)?
- Do you trust Him to provide for your needs (Matt. 6:32–33)?
- Are you a spender or a saver?
- Do you have a save, spend and tithe budget?
- What is your debt?
The first item in your “financial playbook” is to review personal finances. Week one might involve an overview of what the Bible says about money. Weeks two through six could require taking a money management class. If you are in debt, weeks seven through 52 may require a step-by-step process on how to reduce the deficit or become debt-free.
Also use Luke 16:13 as a daily reminder: “No servant can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money.”
Remember, the Bible is your first resource for financial literacy. Study the life of Joseph as an example of stewardship, Proverbs for wisdom and the Gospels for the teachings of Jesus.
The world has changed tremendously in the past 30 years when it comes to finances and money management. Gone are the days when everyone paid cash and never had a credit card.
Today, there are debit and credit cards galore, deposits made into our bank accounts by taking a picture from a smartphone and pay-as-you-go with scanning codes. Identity theft, hackers and other financial crimes have grown in magnitude. We live in a world where we have to literally “be on guard.”
How do we teach our children and grandchildren wise money management skills? It begins early in their lives and must be modeled as well as taught.
Here’s an example: I was at the store paying for my purchase with the last check from my checkbook. My young child observed that I didn’t have any more checks, seemed panicked and said, “What are you going to do? Are you out of money?” I assured him that wasn’t the case. This experience turned into a teachable moment of the banking system and reassurance, and a bank tour was planned.
Financial fitness with a biblical approach means God’s lesson plans and principles never fail. Remember, “Trust in the Lord with all your heart, and do not lean on your own understanding” (Prov. 3:5).
Time passes quickly, but looking back through your lessons, you will recall the joys and challenges and hopefully see your children mature into responsible, biblical money managers.
Age-level teaching goals
Some of these suggestions may seem outdated; however, there is a lot to be said for visual and hands-on approaches. Remember, you are trying to teach the process behind the financial transactions.
- Ages 3 to 5. Introduce the concept of money. Use shopping to teach. Make it a point to carry cash and coins to provide a visual for children. They should begin to see a correlation between the money exchanged and the groceries you are taking home for the evening meal. Instead of paying your tithe online, write a check and allow the child to put the envelope in the offering plate or designated area. Begin to share how God owns everything. He is the provider, and giving back to Him involves obedience and the right heart attitude.
- Ages 6 to 8. When a child enters elementary school, the focus shifts slightly. Move forward with teaching more about the value of money, cost and comparison, and the difference between a need and a want.
- Ages 9 to 10. Find a method to visually demonstrate the importance of saving, spending and tithe. Use envelopes, jars or small banks. Begin to pay an allowance for things done above routine daily chores. Help the child understand delayed gratification. Talk about wisdom in making purchases, cost comparisons and the difference between needs and wants.
- Ages 11 to 13. Things begin to change, and peer pressure should be addressed. Comparison, learning contentment and involvement in the family budget can help the child comprehend what is required for family living. Assist them in establishing a budget and how to do simple record-keeping.
- Ages 14 to 16. It’s time to open a checking account and teach how to write a check, make deposits and reconcile a bank statement. Wisdom and maturity are needed regarding the possession of a debit card and consistency in logging transactions in the checkbook register. Educate about auto insurance and steps to keep rates affordable. It’s time to be looking for a part-time job.
- Ages 17 to 18. This is the time to be thinking and preparing for college, trade school or going directly into the marketplace upon graduation. Whatever the choice, lots of research and a tentative plan need to be developed and adjusted. This is also when a parent asks, “Have I taught my child the things they need to know to be wise and financially independent when they leave the nest?” Grant more independence but with accountability. Use of the phone for financial transactions should be discussed. Allow them to learn from their mistakes, reap the consequences and find the right way to resolve the issue. Continue to teach, encourage and provide guidance.