One of the responsibilities parents have is to educate children on how to handle money responsibly. Here are some pointers for introducing children to the basic stewardship tenets of money: earning it, using it, investing it and sharing it.
Children need to understand that everyone in the family has a job. Their responsibilities change as they get older, but they receive an allowance for the completion of their assigned task. There is a great life lesson in knowing that with hard work they can purchase something they want — and that they have to wait to make that purchase until you’ve saved enough money.
For young children, parents should start with the basics of what money looks like and the names of the coins. Later move to the cost of items and the concept of needs versus wants. Explaining the value of an item versus the price of that item helps older children determine if something is a good use of their resources. Help them to develop their own personal budget and allow them to be responsible for some expenses. As they reach high school, parents can begin to teach them about the proper use of credit cards and the danger of reckless borrowing.
School-age children can understand the concept of saving. At that age begin to explain the idea of earning interest on what they save. Opening a bank account will help them learn to regularly deposit what they save. As a family, you can discuss articles in the newspaper or on TV that discuss the stock and bond markets or investing. Specifically, children need to be familiar with basic concepts of investing their money, such as diversifying investments (using more than one type), to manage risk, saving consistently over time and the benefits of compound interest to help their money grow.
Children need to realize they need to share a part of what they have. To teach a sense of social ethics, parents need to model charity themselves — either through giving money, time or donations. Teaching children that the first tenth of all they earn should be given to the Lord should be an integral part of every Christian parent’s legacy.
Financial health package
Across three issues of the Biblical Recorder and numerous postings online, the BR staff compiled stories dealing with financial health, budgeting, teaching children about money, stewardship issues, etc. For a complete list, click here.