I recently heard author Andy Andrews comment that most parents have a goal of raising great kids. He noted however that is not a good goal. What we really want to do is raise kids who will become great adults.
I think nowhere is this more true than in financial matters. For good or ill money affects so many areas of our lives. But the truth is most of us aren’t born ready to be the next Warren Buffet. Financial skills are learned just like riding a bike or learning to read.
The question is, where will our children learn those skills? Sadly, for many the answer is trial and error at best, as basic financial skills are never really taught to them. This area is too important to allow our kids to learn from whatever accidental source they find. Here are three ways you can be intentional about raising financially responsible kids.
Find age appropriate ways to involve them in your financial matters.
I never actually did it when my son was younger, but I’ve heard some suggest sometime getting an entire paycheck in cash, smaller bills the better. Then count out just how many ones it takes to pay the mortgage and the electric bill and the groceries, etc. $1,000 mortgage payment is very hard for a younger child to visualize, but a stack of 1,000 one dollar bills will help them to see just how much of your pay goes to providing the roof over your heads. If you don’t want to do this with real money, you could probably use play money too, just make sure you start with small enough bills to really show the relative difference in the various expenses.
As they get a bit older, some night when you are paying bills, have your child sit down and watch, or better yet help. Let them fill out the check or enter the keystrokes required to pay the bill online. Show them the statement and answer their questions. (And if they have questions about the bills that you can’t explain, might be a good opportunity to call customer service and get the answers together.)
Take them grocery shopping and let them handle the checkout process including paying. It might be instructive to them to see just how much it costs to feed them.
When your kids are teens and have greater understanding, take them with you to the insurance agent or your financial adviser as you are getting a yearly review of what you have. Let them ask questions.
Many of these activities you do every month anyway. Take time to involve your kids from time to time so they begin to get a feel for how money works.
Set an example
This is probably the most important thing you can do. Kids are pretty shrewd at seeing through our duplicity.
Don’t tell them how dangerous it is to run up a big credit card bill, and then swipe a card every time you go out to make a purchase.
If you are trying to teach them to have honesty and integrity, what do you do when you realize the cashier gave you too much change? Sure walking back into the store is a hassle and maybe it was only a couple dollars. You are impressing a lesson on them though that they will remember for the rest of their lives.
Do you work hard? Or do you sneak out early when the boss is on vacation? They will learn to work based on the example you set.
And perhaps most importantly of all if you are a Christian, do you behave as if God really is the owner of everything?
Be an agent of truth
Lastly, help them understand the truth about themselves.
So many adults spend their whole lives chasing after stuff that they think will make them happy or will satisfy their egos. This really is at the heart of the keeping-up-with-the-Joneses mentality that keeps many from ever really getting ahead.
- Help your kids understand their self-worth does not depend on stuff.
- Teach them that while that new iPad might be able to provide some fun for a while, true happiness doesn’t come from things.
- Help them learn their “coolness” doesn’t depend on the latest fad or fashion.
- Show them how more stuff might make them happy for a little while, giving can provide them with a joy that will satisfy them in a place they might not even know they had.
The Bible says we are fearfully and wonderfully made and our Creator loves us with a love that we have trouble even starting to comprehend. If they can grasp that they will never look at stuff the same way again.
Raise financially responsible kids
As parents we are ultimately responsible for our children’s education and that includes financial matters. We all want to raise financially responsible kids. Try using some of these tips, to help get your children headed down the right path.
Obviously, as in anything it is easier to start when our kids are younger, but it is never too late to start.
Of course, sometimes we slip up in all of these areas and don’t set such a good example. That’s ok. Don’t let that leave you with a guilt trip. Do, however, take advantage of those opportunities to share with your kids what you did wrong and the consequences of your poor choice. Often, those might be the most impactful lessons of all.