Knowing how to talk about money with your kids is difficult. For most adults, everything is on a piece of plastic and we rarely carry cash. All of our bills and all of our giving is digital or automated. It’s important for us to pass down good money principals, but how do we do that when our kids can’t see what’s happening with our money? My wife and I have two daughters, ages 3 and almost 5, who are just starting to learn about the concept of money—these are the five financial principles we are beginning to pass down to them.
1. Money is earned We talk with our girls about why people have jobs. They know that Daddy and Mommy work because we love helping others at our jobs, but also because we need money to pay for things like our house, food, clothes, and the activities they are involved in. It follows then that if our girls want a new book or toy, they can choose to do work around the house to earn money to buy what they want. We have a simple chart on our wall that shows the earning potential of various chores, so, if my 4-year-old wants that Frozen book at the store we can show her what she has to do to get it. There are many kid-friendly chore charts out there, but this is the one we use.
2. Money is a gift from God Money is a tool. It is a resource that is earned from our employer, but ultimately provided for us by God, and we get to decide how we use it. The first thing we are teaching our kids about money is that it is a gift, and when you are given a gift you say thank you to the gift giver. This leads to the next principle… 3. Money is fun to give away One way we show our thanks to God for the money He provides is by giving some of it away, and we involve our kids in that generosity in tangible ways. My wife has enjoyed shopping for boxes for Operation Christmas Child since she was a kid, and for the past two years our girls have been able to help choose the items and pack them in the boxes. They really enjoy it, and it’s so fun to have them involved in that tradition. Another tradition we want to start this Christmas is going through a gift catalog (World Vision sends us one each year) and choosing something, as a family, to send to a family who is less fortunate than we are.
To foster generosity year-round, whenever we eat somewhere that gives toys with kids’ meals, we encourage our daughters to set that toy aside for our OCC boxes because there are so many kids who don’t have what we have. And whenever they earn money to buy something they want, we also have them give a small amount to our church and we talk about how that money helps fill our church’s food bank and helps our church tell people about Jesus. Passing along a legacy of giving is one of the most important life values we want to teach our girls. Money touches everything, and if we can create good habits in this area, they are more likely to be generous in other areas of their lives as they grow. 4. Money is fleeting We are not to this point with our daughters yet, but a simple piggy bank like this one allows kids to put their money into four categories: Spend, Save, Invest, Donate. Using a tool like this is a tangible way to help kids understand the purposes of money—to provide for ourselves both now and in the future, and to help others who are in need—and to divide their money wisely between those purposes. As our kids get older, introducing them to tools like Every Dollar by Dave Ramsey will be helpful for them to designate where their money goes. 5. Money is not the answer to all our problems The comparison trap is real for all of us. My wife and I want to show our kids that while we strive to provide for our family’s basic needs (and also some of those “wants”), we are content with what we have and they should be too. We have to set the example for them and be wise with our purchases, rather than spending money on things we won’t actually benefit from.