Written by Bob Barber
During this holiday season, many parents and grandparents will focus on buying gifts, but the greatest financial gift we can give our children and grandchildren is teaching them how to manage money wisely. By starting early and being intentional, we can help them develop habits that will serve them throughout their lives. The Bible reminds us in Proverbs 22:6 (KJV) to “Train up a child in the way he should go: and when he is old, he will not depart from it.”
Here are nine essential financial lessons you can teach them:
1) Teach them simple mathematical skills: Help them understand basic addition, subtraction, multiplication, and division without relying on calculators. Pay them in dollar bills and various coins (pennies, nickels, dimes, quarters) for small jobs, letting them practice adding up their savings and subtracting their spending and giving. These practical exercises build fundamental money skills.
2) Teach them to divide money into three categories: Give, Grow, and Spend: Use three clear glass jars so kids can watch their money grow over time. Label them for giving, saving, and spending, with equal amounts going into each whenever they’re paid. As they mature, this system naturally transitions to banking and investment accounts, teaching lifetime money management habits.
3) Teach them work is good: Pay them for household jobs like taking out trash, mowing grass, washing the dog, or cleaning windows. However, don’t pay for basic responsibilities like making beds or cleaning up after themselves, as this could create an unhealthy entitlement mentality. Work should teach responsibility without breeding expectation for reward from basic tasks.
4) Teach them about costs: Help them create budgets for things they want, like clothing or toys. Let them experience money management firsthand by physically taking funds from their spending jar, going to stores, and handling transactions with cashiers. Have them calculate their change – these real-world experiences create lasting impressions about the value of money.
5) Be their best example: Let them see you giving to worthy causes, saving for the future, and spending wisely. Avoid impulsive credit card purchases, as children tend to mirror their parents’ financial habits throughout their lives.
6) Show them the importance of giving: Let them observe you giving to church and charities. Take them to food banks, shelters, or on mission trips. When they earn money, encourage them to choose causes or people to help. Through experience, they’ll discover the power of giving and how it naturally counteracts materialism.
7) Teach Contentment: Demonstrate that driving an older, safe, and reliable vehicle is perfectly fine and that vacations don’t require traveling to distant locations. Help them understand that newer isn’t always better, and that true satisfaction comes from appreciating what we have.
8) Teach the value of work and entrepreneurship: Encourage activities like: Starting a lemonade stand, washing neighbors’ windows, pet sitting services, and yard work for neighbors. These experiences teach business basics and the relationship between effort and reward.
9) Teach money management from Scripture: Proverbs contains extensive guidance about money management. Important verses to share include:
- Psalm 24:1 – The earth is the Lord’s
- 2 Cor 9:7 – God loves a cheerful giver
- Matthew 25:14-30 – The Parable of the Talents
- Proverbs 13:11 – Saving little by little