Who doesn’t want to see their kids succeed? Learning to deal with money can be tricky, but it doesn’t have to be! One of the best ways to instill life-long lessons for your child is to build a solid foundation now. Training them in the basics at a young age will set them up for success – both financially and in life – when they venture out into the world on their own.
Between my four children, all had their own unique way of handling money. Samantha would not be seen in anything short of a designer label. Eric saved every penny earned, and paid for his BMW with cash at age 18. Alex wanted to give it all away to those in need. And Tiffany could earn extra cash doing just about anything.
Children have their own unique money styles, and yours probably do too! With such a variety of personalities, you might ask yourself, “where to begin?” Before you throw in the towel, take heart – we have come up with a few simple steps that can help you meet your kids where they are at, and get them started on the right track.
Actions Speak Louder Than Words
Like many other things, good money management skills are more eas
ily caught than taught. As a parent, if you aren’t practicing what you preach, kids will likely not listen to what you say. Rather, if you want to produce good results, model the behavior you want to see your children develop. Do you want them to be wise, generous, or thrifty? Then make sure you are embodying these traits in your own life. While children do not always listen well, they are expert impersonators, who observe and imitate like scientists!
When unsure of how to begin, try focusing on these 5 pillars of stewardship – it makes a great starting point.
- Spend less than you earn
- Avoid borrowing & debt
- Build savings
- Create long-term goals
- Giving is greater than receiving
Dave Ramsey’s cash-based envelope system is also a fantastic tool. It helped my own children build healthy financial habits. Each child had their own set of envelopes to organize how they would use their cash. As they earned their allowance each month, they sorted their money into each envelope, labeled with the following categories:
- Giving (for buying gifts, giving to church/charities, etc.)
In this day and age, almost everything is electronic, and spending has never been easier. The ease of swiping cards, accumulating debt, and lack of immediate consequences has allowed us to abandon the concept of budgeting. However, with having their own limited funds to spend, kids are able to learn to manage money in a safe environment. If done right, children can learn from our mistakes, rather than from their own later on.
Finances don’t have to be scary; rather, they can be one of the simplest and greatest parenting tools available to you – so make them work for you! Whether you use money to teach your children how to have boundaries, what it means to be selfless and generous, the value of a strong work ethic, or even how to overcome challenging circumstances, remember you are the best example you can offer your child.
By applying these basic principles in your own life, along with using a simple envelope system, you offer your children the opportunity to enter adulthood fully equipped to handle whatever life throws their way.