If you would have asked me what it meant to be financially responsible even ten years ago, I would have thrown up my hands in discouragement. See, I grew up in a family in which the discussion of money was the white elephant in the room. It was always "an issue,” but I never knew how much or how little we had.
As a pre-teen, I thought my put-together cardboard furniture was totally cool, until I realized much later in life that it was a sign of financial strain — one that didn’t last very long for my family. By the time I was a teen, all signs of cardboard were replaced while we enjoyed the luxury of having an in-ground pool, remodeled kitchen, and professionally finished basement.
My father used to say to me, “Money doesn’t grow on trees,” but I thought he must have found the orchard at harvest time.
I had no appreciation for the dollar nor how to be a thrifty shopper. I was equally unprepared to manage a budget or make wise choices as a college graduate and newly married wife. If it wasn’t for my minimalist husband, generous relatives, and our combined fear of debt, I can’t imagine where we’d be today, financially speaking. That’s why I’ve become incredibly passionate about teaching our children how money works and how to wisely use it, and I hope to give you some practical ideas for imparting financial responsibility in your tweens and teens as you prepare them for their futures.
Money management isn't some skill you get just because you become an adult at the magical age of 18.
Learning how to use money wisely is something we have the privilege of teaching our children — yes, privilege, because there is nothing like witnessing them grow and learn as a result the investment we make into their lives.
Simple Steps for Teaching Children Wise Money Management
Begin with Allowance (Elementary School)
As soon as your children are old enough to count and read, why not start with giving them an allowance?
We began with a monthly allowance equal to their age starting in first grade and explained that it was not something they were entitled to but rather a way of sharing the family income as they contribute to the family workload. Their allowance became a tool for learning how to save, wisely spend, and give, as they made decision for how to use their own money for bake sales at school, souvenirs on trips, and giving to the offering at church.
Learning the Family Finances (Junior High & High School)
What part of your family finances can you share with your tweens and teens to help them begin to take responsibility for your family’s spending and savings, and also begin thinking about their own future budgets?
It’s common place for my husband and I to do our finances together, with the kids in ear shot. They’ve watched us go through the discipline of entering receipts in our Excel-based envelope system (a skill developed after taking Financial Peace University at church), deciding which category our expenses should be attributed to, and working through our budget. At times, we’ve solicited our teens to help do the data entry, and as a result their learning how a budgeting system works and getting a sense of how much things really do cost . . . and add up. As soon as they had their first paying job, our teens established their own simple budgets with a spending/savings/giving plan with the understanding that their income, combined with their allowance, would go toward entertainment and a portion to co-curricular activities and trips.
Real Life Budgeting (High School & College)
Does it seem too soon to think about post-college life when our teens haven’t yet graduated high school?
While I’m an advocate for savoring the moment, helping our teens understand their potential debt in light of their projected salary is a fantastic exercise for every high school student as they prayerfully consider their college and career choices. With access to the internet, this is an easy process for your teen to embrace and walk through together:
- Search Google using this format: What is the pay scale of a ____________ (name of profession or position)? Do this for as many careers as possible. It’s quite the eye-opening experience!
- Create an imaginary budget using the projected salary and average expenses (search Google again): housing, utilities, food, clothing, gas, auto, medical, travel/vacation, additional education, gifts, student loans (estimate $300 a month for 10 years for the average student loan of approximately $30,000).
- Ask your teen to describe their core values, such as their priorities for family and personal time, how much money they want to spend on travel or hobbies, their desire to be involved in ministry or missions, the city or country in which they want to live in, whether they want to be married and/or have children. Ask them how these values are impacted by their “hypothetical” projected income/debt. In other words, what choices should they make concerning how much college debt is worth incurring to do what they want to do in the future?
"For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it—lest, after he has laid the foundation, and is not able to finish, all who see it begin to mock him, saying, 'This man began to build and was not able to finish'?"
Do you feel totally overwhelmed at the idea of preparing your children for financial responsibility?
Take heart and start with one small step. It might look like learning how to manage your own finances by plugging into a Financial Peace University course at your church, using Dave Ramsey’s resources online, or checking out Larry Burkett’s information found at Crown Financial Ministries.
Believe it or not, it’s your effort towards financial stewardship of your family's resources that will speak volumes to your kids!
So what’s the next step God is prompting you to take towards preparing your children for financial responsibility?
Humbly and passionately,