How Do I Teach My Kids About Money?

Teaching Kids about Money

When should kids have an allowance? How much should it be? Should it depend on chores done? What is reasonable to expect for what age? How can I teach my child to save? To give? To tithe? These and many more questions plague parents.

There are two words we need to understand. Intentionality is the first one. You’ve got to be intentional about it, and you’ve got to be consistent. Doing or saying nothing will leave your kids in the default mode: that’s letting money control them. A scary thought!

The second word is Entitlementitis, which is rampant in our children’s generation. We can stem the tide by teaching them to appreciate things they have. Thankfulness is the opposite of Entitlementitis. It’s hard to go against the culture of affluence and “give me, give me,” but it can be done!

Here are three suggestions:

1)     Give them an allowance. Not a lot, but enough for them to have a little bit of free spending money that they can choose what to do with. Then give them 4 containers (baby food jars work well) with the following labels on them: Tithe, Give, Save, Spend. Talk with them about what each jar represents. Tithe is 10% which we give to God because He says to. After all, it’s He that gives us the power to make wealth (Deut. 8:18). We want to save and give some of our money because that builds character! Talk about each of these especially future goals and generosity. This can be a good discussion, and an on-going one.

2)      

 They should have the opportunity to do some chores for simply being a member of the family. Setting & clearing the table, emptying the dishwasher, feeding the pet, making the bed, emptying the garbage are a few that come to mind. Then they should have the opportunity to do some paying jobs, to earn extra money. Cleaning up the dog-pooh from the yard, helping mom or dad clean the pantry or the garage. You can probably think (with intentionality and effort!) of a number of jobs that need to be done, that kids can do. Put them in a “job jar.” 

3) Some parents pay their kids a commission based on how well or how often they do their chores. This is an intriguing idea, and may well be useful for your family. Read Smart Money, Smart Kids by Dave Ramsey and get some ideas from there.

As the kids get older, their needs change. They may want a pair of shoes for $400. Or a Smartphone! You can negotiate with them, agree to pay what a pair of “regular” shoes will cost and they make up the difference. Or pay half. My parents taught us to save for things by agreeing to pay half, and I remember saving for months to get that coveted doll.

Kids appreciate things they work for and pay for. “I will not offer up to the Lord that which costs me nothing” (II Sam. 24:24) Let’s keep on keeping on for our children’s sake. They’ll thank us someday!