One of the most important, yet often overlooked, aspects of parenting is teaching our kids how to handle money.
Kids who know the basics of healthy money management have a great opportunity to become adults who make good financial decisions. But teaching kids about money is not a one-size-fits-all situation. You have to treat each child and teenager differently based on their age and what they’ve already learned about money.
Let’s walk through some of the different aspects to consider based on your kid’s age:
Lead the way. As a parent, you have years of opportunities to set an example for your little ones. If they see you making good decisions and not stressed about money, they’ll be more likely to follow your example when they get older. Whether it’s budgeting, using cash only, or simply spending in order to keep up with the Joneses, your kids will sense whether or not you have it together financially by what you actually do.
Teach them real-life examples. It’s important they know that everything you buy costs money. As you walk through Target or the grocery store, point out what different things cost. Even better, let them use their money to buy toys they want. Taking a $20 bill that was given as a birthday present and making a decision on whether they want a Batman figurine or a new LEGO set is a basic form of budgeting.
Make your teaching clear. Use something like a clear jar so they can see how much money they are saving. As their Christmas and birthday money builds up, they’ll have a sense of pride and may not be as willing to blow it all on one thing. They might even (wait for it!) learn a little patience!
Say no to allowances. Instead, make them earn their “allowance” by doing chores and basic tasks around the house. It doesn’t have to be complicated—taking out the trash, cleaning their rooms, sweeping the porch. The idea is that money is earned. It doesn’t just appear out of the blue because you exist, though wouldn’t that be nice?
Be reasonable about purchases. Middle schoolers have no problems spending money. It’s just in their blood at that age. But don’t give in to their every demand. Video games aren’t needs, no matter what your 13-year-old tells you. If they just can’t live without it, let them save for whatever they want, then meet them halfway and match them with the rest of the money if you are able.
Teach giving. Following Jesus’ example, show them why it’s important to give. Let them pick a charity or get involved in a fundraiser. It’s so important for kids this age to learn empathy and that everyone doesn’t live like them. Giving helps them take the focus off themselves and see the needs of others.
Help them understand cars cost money . . . a lot of money. Life isn’t a Lexus commercial for most people. Cars don’t just show up in the driveway with a bow on top. So, just like a middle schooler buying a video game, it’s not a bad idea for your teenager to help with the costs of a car. That might mean they need to start saving as early as 12 years old, so they can match what you pay—assuming you’re able—to help them buy that ride when they turn 16. The important point is they understand that a car is a huge responsibility.
Teach contentment. Comparison is a huge temptation at this age. Someone in their class will get a sweet SUV when they turn 16. Another might have an over-the-top birthday party. Someone else might have all the designer jeans and dresses. Understanding contentment—the ability to appreciate what you have—is vital for teenagers. Social media might communicate that there’s always someone with something cooler and more trendy, but contentment is the only true way to find happiness.
Let them practice real money management. In just a few years, things will start to get real when it comes to money. Allow them to practice good money habits now so they are prepared when they’re on their own. Open a bank account. Download a budgeting app. Show them how interest works for you (when you save) and against you (when you take on debt). If they mess up, that’s okay. Now’s the time to make mistakes so they’ll be ready when they’re out on their own and those first bills start coming in.
Every child is different. Lean into their differences and let them learn at their own pace when it comes to money. As a parent, you have a great responsibility. Use these formative years to teach your kids healthy money habits so they can ultimately pass on those same truths to the next generation!