A Basic Framework for Teaching Your Kids the Value of Money
- Austin Pryor
- 2003 12 Aug
Every parent wants his or her children to be wise in handling money. As in other areas of life, we hope to equip them so they will not repeat the costly mistakes we may have made in years gone by. Here is the strategy my wife Susie and I applied when training our three sons about the handling of money. They weren't original with us; like a lot of young parents, we sought the counsel of others whose experiences seemed to validate these principles.
Concerning allowances. Contrary to the most common advice concerning allowances (give them as a reward for completing assigned chores), we gave allowances unconditionally. They received allowances because they were part of our family and the allowance was part of our provision for them. We used allowances to teach the boys about God's grace and faithfulness. They didn't earn them or deserve them; they received them because their parents lovingly chose to provide them. Nothing they could do would result in their allowance being reduced or taken away.
Concerning tithing. The first tenth of their allowances and other income went into the "Lord's bank," and we helped them decide where to best invest it for Him. In addition to our church, they were also encouraged to support parachurch missions. We had a globe of the earth, and pins were stuck in all the places where our family had given to the work over the years. We wanted them to see their giving as an exciting opportunity for our family to team up with others and help change the world!
Concerning chores. The work we assigned to them was given on the basis that we're a family, and in a family, everyone has to help pull part of the load. We helped them see that cleaning and maintenance was part of the cost of having a nice house, nice clothes, and so on. Over the years, they each did their share of house cleaning, folding laundry, vacuuming, lawn mowing, and leaf raking, but they were not paid for any of these chores. Helping out was simply expected of them as family members. To earn additional money, they took on additional, non-household related jobs.
Concerning saving. When they were young, we helped them open their own bank accounts. To encourage savings, we had a matching arrangement where for every $1 in interest they earned, we added $2 (which was gradually phased out as they got older). We also let them know that, unlike many of their friends, their first cars would be "used" and relatively inexpensive because it was primarily their responsibility to save and help pay for them. While we (along with their grandmother) would contribute generously, the amount they would ultimately have available would depend on their own planning and initiative.
Now that they're grown and married, I can report that these principles worked … sort of. They worked in the sense that all three sons have a strong work ethic, are faithful in their giving to the Lord, are averse to debt, and none are unhealthily focused on earning high incomes. Unfortunately, part of the cost of developing these important traits has been that none of them has reached their full emergency fund savings goal as yet. But they're building on a solid foundation and will get there in due course. Their mother and I are proud of their ability to keep money and possessions in an eternal perspective.