I’m not a parent yet. I’m not even married yet…but I do have some ideas about how I intend to teach my children, God willing, how to manage the resources that they are given. It’s taken me a while in my life to figure it out for myself, and for that I feel blessed, as I probably would not have done a very good job teaching my kids how to manage money had I married and multiplied earlier. It could have been a disaster.
As an adult, I am subject to the same money principles that my kids will be subject to. I will pay taxes, I will earn interest, I will give, save, and spend. The three activities that you can do with money are:
- Spend
- Save
- Give
That’s really it. That’s all you can do. You can’t do those without having an income, however, and I intend to teach my children not only how to generate an income, but what to do with the money they earn.
Negotiation
I will teach my children how to negotiate to set a price for the value they bring to the table. It will enable them to handle the decisions they’ll need to make when considering how much they believe they are worth to the marketplace. If they want to purchase something, they will need to earn the money they intend to spend, and they will understand what it means to spend.
Withholding
I will be my children’s tax entity. If they earn money around the house, I will withhold from their paycheck an amount that would be proportionate enough to establish the understanding that we are currently in partnership with Uncle Sam, and Uncle Sam gets paid first. At regular intervals, I will go over their “tax situation” and show them how refunds work, and how having control over your hard-earned money, rather than letting the government be your savings account can be beneficial. They will file their “taxes” and learn how it works.
Tithing/Charity
I will give my children a positive example of giving, but I won’t force them to give. They will have every opportunity to learn and understand the difference between tithing (if you don’t believe in tithing that’s okay) and offerings. Giving is not something the government will chase after you for avoiding. It is a heart issue.
Savings
I will create family mutual funds, teach them how to deposit part of their income so they can watch it grow, and show them what it means to invest in mutual funds. I’ll come up with a way to demonstrate passive income through real estate investments, somehow. I haven’t figured that one out yet.
Debt
I’ll demonstrate the pitfalls of borrowing money through a family issued “credit card” which will help them understand how debt narrows the field of vision when it comes to making decisions about what you want to do in life.
Basically, my intention is to emulate what really happens in life to the adults, so they have a clear picture of what’s really going on. I used to get $3.00/week from my mother just for good behavior. I would save it if I had my eye on a prize, but usually that $3.00 was blown within the hour at the convenient store. Had I been exposed to the reality of how money works, I’m certain that I would have avoided some of the decisions that I made and would be well on my way to the goals that I have so recently realized are possible. So, I’m a bit behind, but that’s okay.
I’m curious to know how you and your family teach your children about money and how it works. What is working for you? What challenges have you faced that you didn’t expect? Have you been intentional about teaching your kids how money works, or are you still living unintentionally yourself?
Let me know by leaving a comment.
