4 Steps to Financially Savvy Kids
In this day and age, we have lost the art of being financially responsible for the way we manage our money. With the ability to get what we want, when we want, and pay for it later, we have dug a proverbial hole of disaster. It’s still not too late to come out of that hole and win over your finances. And you can prepare your kids so that they, too, can learn to never get to that same place. Here are 4 things to think about when building financially savvy kids.
Step One: Teach Your Child The Value of work
Every child needs to do things around the house just because they are a part of the family. Having your child do chores is essential to learning to be responsible and contribute to the being part of the family. There has always been debate about whether children should be paid for chores within the home, but actually an allowance can teach your children important lessons about finances and handling money to set them up to be successful later in life. Create a chore chart for your child with a check off list for each day that they have completed that chore and let them know in advance how much they could potentially earn if they are FAITHFUL to complete that chore everyday. Once they have earned that money at the end of the week, make sure they put that money in an envelope where the real lesson of managing their money begins!
“In all the work you are doing, work the best you can. Work as if you were doing it for the Lord, not for people.” Colossians 3:23
Step Two: Teach Your Child To Give
Now that they have worked hard and earned their money, it is time to teach them to give. By teaching your child to give, you are teaching them the valuable lesson to not only think of themselves and what they will do with their money, but to also think of others. The concept of giving is a hard lesson to understand, but when your child begins to give, they will reap the benefits of feeling good about themselves and hopefully become less selfish in the process. Be an example to your child by cheerfully giving of your own money also. Children follow our example and God’s work says over and over that He honors a giving heart and blesses us for doing so. Start with giving 10% to your place of worship or ministry that blesses you. You will see God is faithful to bless you for being a faithful and cheerful giver.
“God loves a cheerful giver.” 2 Corinthians 9:7
Step Three: Teach Your Child about Saving
Once you’ve given to others, it’s time to look at what needs to be saved. This is one of the most important steps in the financial learning process and usually where people go astray in becoming financially free. Learning to save and buy things outright instead of getting then paying is a lesson in delayed gratification. It’s most definitely a hard lesson to learn. But if you will help your children to understand at an early age, not only will they appreciate their things more because THEY paid for it themselves, but they will be set free from the pattern later in life that leads to financial stress that will affect their relationships, bad decisions, and where they end up for the rest of their lives! Work with your child to figure out how much they need to save according to what they have left after giving and how much the item costs that they want to save for. If an item is $12 and they have $4 left after giving, then 12/4=3. It will take them 3 weeks of saving their money to earn that item. Make a goal poster and place it somewhere within your child’s sight and mark off when they have accomplished a week closer to their goal. Save the money for your child, so it doesn’t surprisingly get spent on something that wasn’t on the list of goals, but let them be in charge of where their money goes. It is good for them to experience what happens to their money when they spend it on a whim also. It teaches cause and effect, consequences, and starting over is not the end of the world.
“On the first day of every week, each one of you should put aside money as you have been blessed. Save it up so you will not have to collect money after I come.” I Corinthians 16:2
Step 4: Teach Your Child about Spending
Now for the fun part of becoming financially savvy: Spending! Although this is the fun part, it also takes a lot of work to be wise with the money that your child has. If your child has saved for a special item, don’t just run out and buy that item. Help your child research that item and find the most efficient source of that item. Perhaps that item is on sale at one store. Perhaps there are sometimes coupons in the local paper for that item. Perhaps you could find that item for cheaper by ordering it online or on a trade shop site. Learning to be smart with your money is an important component to handling money. Teaching your child to “look into first” will not only save them money, but also teaches them self control. God wants us to be good stewards of the money we have and this is important to learn to be financially successful.
“Keep your life free from the love of money, and be satisfied with what you have.” Hebrews 13:5
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