Teaching young kids (8 years-old and younger) about money is far simpler than adults believe. You don’t have to be a financial guru (I’m not) to set your kids in the right direction for finances. You need a solid foundation and some good principles to start. Let’s begin there!
The Foundation: God owns everything.
To teach kids about money, we need the “how” and “why” behind our financial decisions. For believers in Christ, it’s simple: God created everything, therefore, He owns everything. To rephrase that statement for younger kids: All of our stuff belongs to God. Kids can learn this theological concept in it’s simplest form.
That’s it! That’s our foundation to start. We have certain ways of handling money because everything belongs to God. He created it all, therefore, He gets to determine how we manage it.
As parents, we can build on this foundation for many years. While our conversations with our kids and the financial knowledge we convey to our kids will become more complex, the foundation will remain the same.
The natural question that flows from the foundation of “God owns everything” is: How does God want us to manage our money? There are some basic key principles to teach our children. I like to call these the “stones” used for building on the foundation.
What are those key principles? They too are simple.
Key Principles: Give. Save. Live.
Give-Save-Live is the pattern of finances we see in scripture. Another way to state this concept is that we GIVE first, SAVE next, and then LIVE on the rest. God calls us generously and joyfully give our best and our first fruits to Him. He also wants us to be wise in saving, while enjoying the blessings he has bestowed upon us.
Teaching kids about money shouldn’t be complicated.
These three concepts, Give-Save-Live, are not only easy to teach kids, they are easy to build upon in complexity as our children get older. Art and I have created some simple and kid-approved definitions for these words that you can use with your own children.
GIVE means to let someone else have or keep something.
SAVE means to keep money for later.
LIVE means to use the money you have leftover.
Here are some tips on how to teach your children to GIVE first, SAVE next, and then LIVE on the rest.
1. Keep it Simple.
Young kids don’t need great complexity, nor should we expect it. Start simple and build upon over time. First we “give,” then we “save,” and then we “live” on the rest.
2. Repetition works. Repetition works.
Kids learn best through repetition. This truth is backed by science, but we also see evidence of this in Scripture—“Trainup a child in the way he should go: and when he is old he will not depart from it” (Proverbs 22:6, KJV). Technique is mastered with practice. Think of athletes training; the best athletes practice over-and-over again. Repetition works.
In the book of Deuteronomy, Moses tells the Israelites to teach their children God’s commands and miracles.
How were they supposed to teach their children?
Deuteronomy 11:19-20 tells us, “Teach them to your children, talking about them when you sit at home and when you walk along the road, when you lie down and when you get up. Write them on the doorframes of your houses and on your gates” (NIV).
Teaching God’s commands was to be apart of daily life for the Israelites. They were to repeat them, live them, and model them. Let’s do the same with our children. Repetition works.
3. Provide opportunities for practice.
Young kids won’t understand “10%” or “20%,” but they can grasp concepts like “more” or “less.” Provide both verbal and visual cues, while letting your child participate in setting aside or donating the money. Here are a few examples:
If you child earns $1.00, allow them to count out 10 dimes. Next, have them place 1 dime in a GIVE jar, 1 dime in the SAVE jar, and then count the remaining dimes for the LIVE jar.
Allow your child to use his or her GIVE jar money to buy presents for a child on an Angel Tree at Christmas.
Have your child put his or her own money in the offering plate at church.
When your child buys an item with his or her own money, allow your child to hand the money to the cashier.
4. Model what you teach.
It’s hard to lead someone to a place you are not willing to go first. If you want to cultivate generosity and healthy financial stewardship in your kids, first live it yourself. Let your kids see your generosity and let them be a part of it. Steward your home, your car, and your things for Christ’s glory. Essentially, put your money where your mouth is.
Teaching kids about money shouldn’t be complicated. Stick with simplicity, repetition, practice, modeling, and solid biblical principles. Lay the foundation and build upon it for years to come. Your kids will thank you later.