As with everything, our kids learn about money more by watching us than by what we tell them.
This means, that whatever we want our kids to know about money management, we better be doing ourselves.
That being said, here are a few things that we have tried to do with our children when it comes to money.
- For every cent that our kids earn or are given as gifts, 10% goes to the church as their tithe. Learning early on to give back to God a portion of what He has given to them is key in learning to be good stewards of our finances. (For more on the idea of tithing, click here.)
- In addition, we encourage our kids to also save a portion of their money – anywhere from 10%-50%. They have savings accounts and we deposit the money into those accounts.
- We don’t buy our children everything they ask for. They need to understand that there is not an unlimited supply of money and that we must live within our means, and not spend money just for the sake of spending money.
- We don’t have credit cards and our children know it. They know that when we use a card, it is a debit card and is tied to our checking account. We can only spend money that we already have. We also talk to them about why we don’t use credit.
- When they have money to spend, we try to guide their purchases to the best of our ability. Spending $20 on candy (which our daughter would totally do if left to her own devices) is not a responsible use of money. (Not to mention it is not healthy!)
- We have tried allowance, and the model we used made the amount per month equal to their age. For example, Anne, age 13, would get $13 per month. We haven’t been consistent with this in the last year because of employment and income changes, and we talked through this with the kids so that they understood it was more important for us to be able to feed, house, and clothe them, than for them to have extra spending money.
These are our guidelines. We don’t do everything perfectly when it comes to money, but we are always working on being better and more responsible. In the process, we are also trying to teach our children to be responsible with money so they can maybe avoid some of the more avoidable financial woes as they become adults.