Provide money-handling opportunities

Parents’ verbal instructions will be enhanced when they provide their children with age-appropriate opportunities to handle finances while they are in the home. Allowances often enable children to practice the financial skills—like money management and investing—they’ll need to survive in our tough economic times. 

At twelve, a child may be able to handle all of their entertainment funds. By fourteen, their financial responsibilities might include managing clothing needs, haircuts, and school supplies. By eighteen, perhaps they can begin to handle some aspect of the family budget like grocery needs or the family entertainment fund. 

When Prattville parent, Amy Alexander’s children were young, she encouraged them to save for large purchases. When they grew older and found employment, she and her husband allowed them to spend and save their earnings as they chose. “But we gave them less money, so they had to spend wisely or run out,” Amy said. “So far, they have each chosen wisely, and the boys’ high school earnings took them well into college.”

Allow children to make financial mistakes

As our children age, the stakes rise. It's much easier for a fourteen-year-old who's blown their allowance to go without new clothes than it is for a forty-seven-year-old who's buried himself in debt to deal with foreclosure. 

“The key to providing teenagers with an accurate view of money is to give them the actual experience over time of living on a limited amount,” said Mr. Brown. “When an eight-year-old blows his allowance on something frivolous, he should then be allowed to experience the consequence. Each dollar can only be spent once, and any money consumed today is gone forever.”

Loaning money to our children without consequences can be detrimental, training instant gratification, impulse shopping, and poor money handling. However, if handled correctly, Mr. Brown believes parental loans can provide an invaluable lesson on debt.  

“As the child experiences the impact of interest, the challenge of having to make payments, and possibly even having a favorite item “repossessed,” valuable life-long lessons are learned,” Brown said. “Many of us would agree that the greatest lessons learned in life are sometimes learned during periods of struggle. Look for opportunities for your children to learn things the hard way while still under your guidance and protection. There is always a danger in completely insulating a child from the consequences of their bad decisions.”

“A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences” (Proverbs 27:12 NLT).

Throughout its pages, the Bible reminds us of the value of wisdom followed by careful planning. God further instructs us to train our children with patience, forethought, and diligence. Financial difficulties, economic downturns, and unexpected expenses are bound to come. Children who have practiced delayed gratification, have learned the cost of maintaining a household, who have been given the opportunity to practice money-management skills, and who have been allowed to learn from their mistakes will be less likely to fall into debt. 

Jennifer Slattery lives in the midwest with her husband and their teenage daughter. She writes for Christ to the World Ministries, the ACFW Journal, the Christian Pulse, and Internet Cafe Devotions. Her work has appeared in numerous publications and compilation projects. Visit her online at Jennifer Slattery Lives Out Loud.  

Publication date: August 13, 2012