Home Life

Neither my wife nor I were taught to manage money. We learned what we know in the “school of hard knocks.” We want to keep our children from making some of the same money mistakes we made. How do we teach our children to handle money wisely?

Realistically, you won’t be able to prevent your children from making some financial mistakes. The good news is you can help them learn from mistakes that are more in the range of $5 to $100 instead of $500 to $10,000. Unfortunately, most children are not being taught how to be good stewards of money. On a test of personal finance skills administered to high school seniors, students averaged a score of 57, an F on most grade scales. Only five percent received a C or better. Two-thirds of students ages 16 to 22 admitted they should know more about money management. We tip our hats to you for wanting to teach your children to handle money wisely.

Two Biblical Principles

Christian parents need to teach their children about finances from a biblical foundation. The starting point for managing money well is an understanding that God owns everything. Haggai 2:8, Psalm 24:1, and Matthew 25:14 affirm that all resources come from and belong to God. Someone asked John D. Rockefeller’s accountant if he knew exactly how much money Mr. Rockefeller left when he died. The accountant replied, “Certainly, to the penny. He left everything.” The reality is that we are managing God’s resources for a brief period of time.

Another biblical principle children need to understand is that you can’t have everything you want right now. Delayed gratification is the ability to put off today’s desires for future benefits. The world is bent on teaching your children to get all they can now—no matter what the cost will be in the future. “Just charge it” is the motto of a majority of Americans. Those college freshmen who carry a credit card also carry an average of $1,585 in debt. Personal debt has reached such a level that more than 80 percent of a typical family’s disposable income is pre-committed to the repayment of debt. The Bible teaches us to see beyond our immediate desires to what is eternally important.

Teach Through Your Lifestyle

In the early 1700s two men lived distinct lifestyles. Jonathan Edwards was a Christian man of integrity. The other was Max Duke, a criminal with a well-known reputation. A study of their descendants over a period of 200 years proves interesting. In Jonathan Edwards’ line of descendants there are 13 college presidents, 200 preachers, 60 prominent leaders, 90 physicians, 32 authors, 65 professors, and 300 farmers. Max Duke’s descendants include 90 prostitutes, 100 criminals, 145 confirmed alcoholics, 300 delinquents, and 285 who contracted various social diseases.

Parents can be wise or foolish models, and the type of model we are will influence future generations. How your children manage money will reflect how you manage money. Without using words, you pass on to your children your priorities and purchasing habits, so training your children must start with you. Keep in mind that it is just as important to model failure as it is to model success. We’ve all had failures in our lives. How we handle failure is most important.

Teach as You Go

Sitting your children down and saying, “Now I’m going to teach you about money management,” is not effective. Jesus continually taught his disciples as they went. It did not matter if they were in the middle of a field, in the temple, or at sea in a boat. He used ordinary happenings to teach them. The best time for teaching is when the student is willing to learn and can relate to what is being taught right then. Teach your children as you go—while shopping, on vacation, at church—wherever life takes you.

An “as we go” lesson that has worked well with our children involves vacation time. To teach Brian and Amanda about budgeting, decision making, limited resources, rewards, and wise buying, we set up a real life experience. As soon as they were old enough to understand money, we established a simple vacation budget with the children managing a portion of the budget. We provided lodging and transportation and they had to pay for everything else (food, snacks, souvenirs, admission charges, and so on) out of their budget. Risky? Yes! But they learned to manage money by actually doing it. They made mistakes at first, but then they became surprisingly wise. As an incentive to manage their money wisely, any money that was left over was theirs to keep. We were amazed at how thrifty our once spendthrift children became. Equipped with principles from the Bible, your good example, and teachable moments, you will be well on your way to helping your children learn how to manage money wisely. |L

Send your questions about family life to Phil and Bev Haas in care of The Lookout, 8805 Governor’s Hill Drive, Suite 400, Cincinnati, OH 45249, lookout@standardpub.com.We regret that personal replies are not always possible. Phil and Bev Haas are involved in education and family ministry in Cincinnati, Ohio. They are the parents of two children.