Christian Financial Advice and Biblical Stewardship
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Children and Finances...(Part 1)

  • Crown Financial Ministries
  • 2003 8 Aug
Children and Finances...(Part 1)
"Train up a child in the way he should go, even when he is old he will not depart from it" (Proverbs 22:6). The Word of God is very specific concerning parents’ responsibility to train their children. But where do parents start?

Where to start
The way to train children is actually very simple. Whatever principles God establishes for parents, the parents should pass along to their children. The difficulty comes in deciding which principles to teach at what age and how to get children to understand. However, there are three principles that are applicable to both parents and children.

  1. Teach by example that God owns it all. Parents need to demonstrate that they’re willing to put aside indulgences and personal wants in order to meet the needs of the family and others. Parents should let their children see them pray for God’s provision concerning material needs and let the children know that borrowing is not God’s best for the family. In addition, parents need to show by example that the tithe is the first thing that is faithfully paid out of every paycheck. This will instill in the children the principle of tithing and giving back to God the firstfruits of their income. Then, as soon as they begin to receive money, children need to be encouraged to pay the tithe first.
  2. Exercise self-control. There’s no way parents can establish financial discipline in their children if they themselves are not disciplined. Parents should share their budgets with their children and show them how to save money to buy clothes, repair the car, buy Christmas and birthday presents, or take vacations. Parents need to not only teach but also practice moderation, regardless of their ability to generate income. God’s instructions require that we exercise discipline in everything we do.
  3. Live on a budget. No matter what the family income is, a budget is needed. Begin at an early age teaching children how to manage their money and how to divide it into different parts.

General training
The family is a community, and everyone in the family shares in the opportunities, responsibilities, rewards, and income of that community. As part of the family community, children are responsible for certain household duties for which they are not paid. These could include cleaning their rooms, doing dishes, and picking up toys. However, for children to learn the value of money they need to have an income.

Many parents choose to give their children an allowance—especially younger children through preteen years. An allowance should not be tied to work-for-pay projects. It is strictly money given to children with no strings attached. Nevertheless, parents need to set allowance guidelines. The allowance should be large enough that the children look forward to receiving it, but it shouldn’t be so large that it takes care of all wants and needs. They should learn how to save for the things they want. Just like parents receive raises at work, children also should receive allowance raises.

In addition to allowances, parents also should provide paying jobs for their children. These might include mowing the lawn, weeding the garden, cleaning the garage, washing the car, washing windows in the house, and so on. Children should be paid equitably according to what parents are able to afford. Not only must parents be fair, they also should be firm and insist that their children observe some simple rules.

  1. Pay children only for jobs completed. "He who tills his land will have plenty of bread, but he who pursues worthless things lacks sense" (Proverbs 12:11). For children to learn the value of being paid for work done, parents should not pay them unless all the work has been completed that they had agreed to do. In other words, parents must avoid paying 50 percent for 50 percent of work completed. After the work they had agreed to do for a certain amount of money is complete, then they should be paid the full amount. Nonetheless, parents need to reward exceptional or extra (more than what was agreed upon) work with bonuses.
  2. Pay for quality work. "Whatever you do, do your work heartily, as for the Lord rather than for men" (Colossians 3:23). Children should understand that they will be paid for work well done. This does not mean that they have to do things perfectly; they may not have the ability to do things as well as adults. But it does mean they need to do the best they can do and take pride in their accomplishments.
  3. Pay fairly within the family budget. Parents must pay their children a fair wage but not excessive. Paying children too much for work likely will cause a distorted value system after they get older.
  4. Encourage sharing. Encourage children to set aside a portion of their wages to give to missions, the poor, or to other worthy causes. This is in addition to the tithe.
  5. Encourage saving. "There is precious treasure and oil in the dwelling of the wise, but a foolish man swallows it up" (Proverbs 21: 20). Parents can discourage debt by encouraging saving. Children who learn how to save for the things they want, rather than having parents get it for them by charging it, will as adults be more inclined to save for wants, rather than going into debt to get them.

Govern spending habits
One of the best things parents can do for their children with regard to financial discipline is to establish some ground rules that will serve to govern how much money they will receive and how they are allowed to spend it. Nevertheless, these rules cannot be too restrictive; parents should want their children to experience the freedom of spending their money on what they want to buy. In addition, this will give them room to make occasional mistakes in their purchases—mistakes they can learn from later.

Children should think hard about spending choices, but their mistakes should never be over-emphasized. Rather, when parents see their children make wise buying decisions, it is time for plenty of praise.

With regard to financial management, parents’ goals should be to slowly develop financial discipline and wisdom in their children. It doesn’t happen overnight; but, with consistency the seeds of responsibility that parents sow will eventually take root in their lives and yield results in their future financial dealings.