By Teaching
In Proverbs 22:6 it is written, "Bring up a child by teaching him the way he should go, and when he is old he will not turn away from it." Today we will look at how we can guide our children to being good stewards of what God gives them and avoid the financial snares that exist, stepping forward towards a better path in their young lives.
As you know to be true in any area of life, there are two key ways your child will learn:
From observing you and learning from you
From doing things themselves
We want to lay a godly foundation for them by first showing them our reverence for the Lord - that He is our source and our provider, by giving to Him in tithes and offerings. Explain to them in the history of Old Testament the act of giving the tithe, and how in the New Testament that is a starting point of giving to the One who lavishly gave us His Son Christ Jesus. Share with them how God promises to those who give to Him that they will receive back from Him to meet all of their needs. Bring them over occasionally and have them at your side as you write a check, or give online so they can see the actual act of obedience take place. They will remember that.
When they initially receive their own money, from gifts, allowance or doing chores, encourage them to give back to God. One good visual method for them to learn from is to have jars which are labeled "Tithe", "Savings", "Spending". This will give them a physical place to set aside the tithe until coming to church. Teach them to make the tithe jar the first one they place their money into before the others. They will remember that.
Explain to them that there will always be more things that they will want to buy then they will have the money for, and that you too have this same desire, but that you strive to keep it under control. From the key verse of Proverbs 21:20 regarding spending less than you make, the International Children's Bible version says "Wise people store up the best foods and olive oil. But a foolish person eats up everything he has." Read this verse to your children and explain its context into money and spending. The use of the jars will help visually reinforce to spend less than they receive.
Share with them a precious nugget of wisdom in dealing with this... to wait. Teach them that when they want more costly things that they should wait and give it some days. If they do this, every time they then change their mind and decide against buying that item, it will demonstrate the wisdom of using time and developing patience, which will serve them extremely well in many other areas of their lives. They will remember that.
Regarding saving for the future and receiving interest, I have heard of parents who have rewarded their children for their patience and saving, by giving them bountiful interest compounded monthly so the children can more readily see a result and be encouraged in the practice. Even without this enticement, using the savings jar to gather up over time for a larger purpose will be an experience that will prove beneficial down the road.
On the topic of interest, explain to them how as an adult there are large things which cost more than can be easily saved to purchase, such as cars and houses. And how we agree with lenders to receive the sum of money to buy these things... but then have to pay back much more than the cost of them over time. Tell them what that time is - over 5 years for a car and as much as 30 years for a house.
If you are saving for a car to avoid a loan, share with them the process and how you are watching your spending carefully in other areas so you can make the car purchase with savings and avoid a loan to be paid for an extended period. In the same manner for your home, if you are paying extra principal, teach them how this action is saving thousands of dollars and especially how it is reducing the number of years to continue making the monthly payments.
One of the key areas to teach your children is how to handle credit cards. They will begin to encounter them at age 18, but need the proper foundation as soon as it is age-appropriate to avoid the traps. If you as a parent personally went through a season of young adult credit card folly, share this experience with your child, and how you regretted the results and regained control over it. They will remember that.
Explain to them that credit cards have the highest interest rate of any normal borrowing - currently over 22% on average. At that rate the open balance would double in just over 3 years. Tell them credit cards also have costly late payment fees. Teach them that while a credit card is a good way to establish credit early in adult life, that the golden rule is to pay the balance off every month. Show them how with your own credit card you can view the current open statement in real-time, showing how much is owed and how keeping up to date on that knowledge is valuable to avoid having the bill arrive being too large to pay off.
There is a Christian quote that goes "If we don't teach our children to follow Christ, the world will teach them not to." The same follows for being good financial stewards - if we don't teach our children wise, scriptural handling of finances, the world will teach them not to.
In closing, know that it is your responsibility to prepare your child for adult life - including their finances, knowing it is a more complicated landscape than when most of us entered adulthood. Help them to not sense a burden in this area, but that they can feel well prepared because of what they saw you do and how you taught them.
"A good man leaves an inheritance [of moral stability and goodness] to his children's children..." (Proverbs 13:22)
God Bless you and may He show Himself greatly to you (and your children)
Paul
