Work/Life Balance and the Debit Card - What You Leave to the Kids (Part Deux)

Work/Life Balance and the Debit Card - What You Leave to the Kids (Part Deux)

ONLY RECENTLY, have I begun to pray for wisdom when it comes to investing and counseling our kids about money. However, even without divine intervention, Steve and I did have some “teachable moments” with our kiddos. You might find a few of our tips—and some we learned from other parents along the way—helpful as you lay the foundation of wise money management for your little ones.

At age 2: Introduce the concept of delayed gratification. Begin when they’re old enough to sit in the shopping cart. I don’t care how loud they scream at Target—just smile sweetly at the mother standing in line behind you and tell her your child is embracing the concept of delayed gratification.

At age 3: Introduce the concept of giving. Hoarding money is as unhealthy as refusing to take financial responsibility for yourself, so instill the habit of giving. The average three-year-old will clearly understand the concept of sacrificing a toy in order to buy one for another child in need; as a matter of fact, they seem to enjoy the act of sacrificial giving. Get them in the habit now of giving of their first earnings in the form of a tithe or contribution. Explain how such gifts are used and why the organization depends on their financial help.

At age 4: Introduce the concept of pay yourself first. Encourage your child to pay themselves 10 to 20 percent of their allowance or earnings before shopping. Children as young as four should have three piggy banks—one for spending, one for saving, and one for charitable giving. As they get older, replace the physical saving bank with a passbook savings account. Now is the time to get them in the routine of stopping by the savings piggy bank before heading to the toy aisle. It will make the drive-through at the bank second nature by the time they’re fifteen.

At age 7: Introduce the concept of the 401(k). For every dollar your children save, match it dollar for dollar. This concept can be grasped by the average seven-year-old, but let me tell you, by the time they’re teenagers (and eyeing a new jacket or electronic equipment), they will totally embrace this plan! And there will be no question about how a 401(k) works when they’re twenty-five.

At age 7: Don’t introduce credit. If you are teaching delayed gratification (see first tip above), you will not be tempted to allow your kids to “pay you back later.” This is a bad habit to start; the only thing it accomplishes is getting them comfortable with borrowing and debt.

Tell them to use their money to do good. They should be rich in good works and generous to those in need, always being ready to share with others. (1 Timothy 6:18)