Want to help your children instill healthy financial habits that will stick with them all throughout their lives? This post will help you teach your kids all about money!
One of the most valuable gifts we can pass on to our children is educating them to be financially responsible. Having a positive outlook on money can develop many beneficial qualities including self-discipline, responsibility and organization.
This post will discuss ideas to educate your children at different stages about finances, a biblical outlook on money, and some resources that may be helpful to you. Finances are something we all have to deal with in life and by demonstrating good money practices, your children will be better off and more equipped for what life throws at them.
This post is all about how to teach your kids about money.
For Young Kids:
Allowance
One amazing way you can introduce the concept of money to your young children is by giving them an allowance. Find 3 containers, envelopes or jars and help your child evenly split the allowance evenly into 3 categories: “Spend”, “Save/Invest” and “Share”. Then teach your child to use the money in each jar accordingly.
-Spend/Give can allow them to purchase items of their choice, and show them what money can buy. And can teach them the benefits of delayed gratification if they choose to save their money for a bigger and more exciting purchase.
-Save/Invest is designed to show your kids the benefits of saving for adult purchases down the road, like a car, college tuition, etc. This category may not mean much to them as a kid…But they will appreciate having a good chunk of cash to put towards their bigger financial investments in the future. They will look back and be glad they saved some money.
-The Share category can be used to introduce the concept of helping others. Discuss problems in the world that you and your child could help solve by donating money, or purchasing items to help a cause. You could encourage your child to save money to give to a homeless shelter, purchase items for a food drive, or buy dog food for a local dog shelter.
Give Them An Opportunity To Earn Extra $$$
Another way you can educate your young children about money is by allowing them to earn a little extra cash. Choose tasks beyond the normal chore expectations like helping you vacuum your car, doing the spring cleaning, or organizing the garage.
This will give your children a chance to earn more toward a purchase they desire to make and can introduce them to incentives for earning their own money.
Include Them In Conversations About Money
Speak candidly with your children about money when conversations present themselves. You can talk to them about the consequences of wise and foolish spending, point out bargains at the store, and answer any questions about household expenses, bills, or the cost of living in general.
For Teenagers
Encourage Them To Get A Job
When your kids get to be teenagers, encourage them to get a summer job, or work part-time during the school year. Working a job can teach kids the value of earning their own money instead of having to wait on an allowance. Working their own job helps them develop a strong and can-do work ethic. And shows them that with hard work they can save up for the things they really want.
Working a job is a great opportunity to see how businesses operate, can help them build up a resume and teach them how deal with people in general. (The world would be a better place if everyone had to work in customer service for at least a couple years.)
Budgeting
Next, when your kids are ready to start planning out bigger purchases, you can teach them to organize and budget their money effectively. If your child makes $250 a week from their job, you can demonstrate how setting aside a portion of that money can add up over time. And how it allows them to make their desired purchase within a certain timeframe.
This will help them delegate their money more responsibly and help introduce them to a valuable skill they will need their whole adult lives.
Discuss Their Future
This is also a good time to encourage them to start thinking about career possibilities.
One thing I have learned and observed is that college is not necessary for everyone. Many of my high school classmates went to college and either can’t find a job in their field now…Or are not even working a job that they got a degree for.
College may be the right move for certain individuals, but it isn’t worth having to pay off student loans half your life if you’re not certain about your career aspirations.
There are many other jobs that pay well including trade jobs, real estate related careers, etc. These jobs may require some schooling, but won’t put you out tens of thousands of dollars a year… Which is the standard for many colleges.
Support your children’s dreams and aspirations, and encourage them to spend time thinking about it… Without the rigidity and expectation that they must go to college looming over their heads. It may take your child a while to figure out what interests them and that’s OK!
Maybe your child has an entrepreneurial mindset and wants to be their boss. Spend time learning about different jobs on YouTube, ask about shadow days or internships, and always remind them that hard work can take them wherever they want to go in life.
For Young Adults
Pitfalls Of Borrowing
Loans, credit card debt and car payments are nothing to mess around with. And can have negative long-lasting effects if they aren’t handled properly. Explain to your young adult the importance of keeping up good credit and how credit will play into their ability to get a loan for a house, etc.
Encourage your kids to always pay all bills on time and in full so they don’t run the risk of getting into hot water with a credit card company or lender.
Budgeting
Encourage your young adult to set a budget and create a calendar for their bills so they’re always aware of bills coming up and are paying them on time.
This will help them to not spend beyond their means and stay realistic about financial obligations. Carefully planning a budget will help them understand financial necessities, wants, and where they can make sacrifices to save.
Saving Is Essential
It may reach a point where your kids want to figure things out on their own instead of having to listen to your input. But you can still try to give them words of wisdom when they seek guidance and want to hear about how you handled certain financial hurdles.
If your kids are desiring to start their own business or build their own house…You can be candid about the realistic time frame, and financial situations they’d need to make these things happen.
You may want to encourage them to start saving for these bigger purchases early on so they have a jumping-off point when they’re ready to take on a bigger financial endeavor.
Investing
Investing is a wonderful way to make your money work for you but you should be honest with your kids about the risks associated with it. Encourage them to explore and educate themselves about diversifying their financial assets and making appropriate goals for their risk levels.
You can tell your kids that if something sounds too good to be true…It likely is and isn’t worth the risk of suffering major financial loss. You can encourage them to work with financial advisors and continue their education about finance in general. And of course, let them know what you’ve learned about investing over the years.
What The Bible Has To Say About Money:
The Bible has about 2,350 verses about money, and nearly 25% of Jesus’ words in the New Testament have to do with biblical stewardship. This topic is very important to God and for good reason.
Money has no will of its own, only we do. And when we do not have a healthy and biblical approach to money, it can very easily become an idol in our lives. 1 Timothy 6:10 says that money is not evil, but the love of money is the root of all evil.
For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.
1 Timothy 6:10
Sadly, money is a vice that entraps and separates many people from God. And people will spend their lives chasing it, over a true relationship with God.
Jesus is and will always be the only thing we need. Period. This should always remain our outlook on life. And we should view further blessings as gifts out of God’s abundant love. The richest people of all are the ones who walk with God. Because treasures on earth will pass away eventually, but Christ is forever.
If we are blessed financially, we are to take good care of our households, and raise them up in the faith. It’s also important to God that we are generous with our money and do things to help others in need. At the end of the day God owns everything. And we are only stewards of the blessings God has entrusted to us.
It’s essential to teach children that it is always more blessed to give than receive. Our kindness and humility are what really matter in God’s eyes.
My Favorite Ways To Give
Here are some of my favorite ways to give to others in need.
-Contributing to go-fund-me fundraisers
-Tipping generously
-Donating items around the house that I no longer need
-Buying friends’ gifts they will really value
Resources
Finally, Here are some financial education resources that have been extremely helpful to me!
One resource that helped me grow my financial intelligence is Robert Kiyosaki’s “Cashflow” financial education game. I would liken it to a vamped-up version of Monopoly. Cashflow teaches you real-life financial and investing skills and helps you develop an entrepreneurial mindset.
- Business Board Game: Make learning stocks, money saving, and the like more fun with this concept board game brought to you by “Rich Dad Poor Dad” author Robert Kiyosaki
- Cash Game Updates: Explore the world of investing through a unique figure among board games, teaching vital and essential financial skills while updated since 2020 to suit the times of today
- Gameplay Requirements: Starting up a session is as easy as with kids games on the fly and requires only basic math skills to immerse in money education and conversation; Extra paper also recommended
- Family Game Night Option: Designed to facilitate and empower with valuable knowledge in learning stock investing, real estate investing, and business building as a collaborative family experience
- Board Game Set Specs: Dimensions (L x W x H): 11” x 3 x 15” with a weight of 2.3 lbs; Easy-to-learn, delight in this vibrant 6-player learning board game recommended for 14 years and up
- FUN AND INTERACTIVE: Turn the task of learning about money into a fun activity with Future Fortunes Academy’s Financial Literacy Flash Cards. Designed with bright, engaging graphics, these 52 cards make complex financial concepts like saving, cashflow, and investments easy and enjoyable for kids to understand, turning education into a game they’re excited to play.
- GROW SMART SAVERS: Equip your child with the tools to become a savvy saver from a young age. Our flashcards introduce key financial principles, such as the importance of saving money, creating a budget, and understanding cash flow, in a manner that’s engaging and straightforward. This foundational knowledge is crucial for building a future of smart money management.
- EASY MONEY MANAGEMENT: Simplify the world of money for young learners with our easy-to-understand financial flashcards. By presenting complex financial terms and concepts in a clear and concise way, these cards make learning about budgeting, saving, and investing accessible to kids, setting them on the path to becoming confident money managers.
- START FINANCIAL CONVERSATIONS: Encourage meaningful discussions about money with thought-provoking questions on each card. These flashcards not only teach financial basics but also spark curiosity and conversation, helping kids and adults alike explore ideas about saving, investing, and making wise money choices together.
- ADAPTABLE LEARNING TOOL: Designed to suit any learning style, our Financial Literacy Flash Cards are an invaluable resource for teaching financial concepts to kids. Whether your child learns best through visual aids, listening, or hands-on activities, these cards offer a flexible and interactive way to engage with financial education, making the learning process enjoyable and effective.
Some Of My Favorite Financial Books:
- Roedel, Miss Jemma (Author)
- English (Publication Language)
- 113 Pages – 12/01/2021 (Publication Date) – Independently published (Publisher)
- S. Clason, George (Author)
- English (Publication Language)
- 114 Pages – 04/05/2023 (Publication Date) – Independently published (Publisher)
- Kiyosaki, Robert T. (Author)
- English (Publication Language)
- 336 Pages – 04/05/2022 (Publication Date) – Plata Publishing (Publisher)
In conclusion,
Financial education is a lifelong journey and we should always strive to learn how to mange it better. Having a solid foundation, relationship and understanding of money can make a world of a difference in a child’s ability to succeed… And live a comfortable and fulfilling life. It’s important to keep in mind that money is simply a medium of exchange.
This post was all about how to teach your kids about money.
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