Talking Money with Kids
An Action Plan
Did your parents’ teach you about saving early in life? Do you wish that you had a chance to learn how to manage your personal finances earlier in life? The fact is that most children adopt the habits and philosophies that their parents have about money.
Parents will often spend large amounts of time teaching skills that children will naturally pick up, but never teach or even discuss one of the most important habits in life, how to handle savings and money.
“Odds are your kids will figure out how to tie their shoes. I do not see many adults without this skill, but I meet people every day that haven’t learned how to save”
– Todd Burkhalter
This conversation goes best when you have an action plan.
Start by giving your child an allowance for chores completed. An allowance isn’t a birthright, but payment for work completed. Getting this wrong breeds entitlement!
Next, use this simple yet powerful phrase, Give Save Live, to instill an important life lesson on how to manage money. We Give first, Save next and then Live on the rest. Allow them to own this philosophy by controlling these three areas:
Giving – allow your child to give to something/somebody that he/she wants to help (where they will see the result or impact) This creates joy in giving as opposed to feeling obligated.
Lesson/Verse: 2 Corinthians 9:7
Saving – allow your child to see and understand where their savings is going – Discuss the statements and how/why it grows. In time, allow a portion of their savings to be used for a larger purchase, thus reinforcing the impact of saving. Older children should be allowed to invest a portion of their savings into companies that they like and will want to follow. This step increases their enjoyment and understanding of investing
Lesson/Verse: Proverbs 13:11
Living – allow them to enjoy the remaining portion
Remember that children often mimic what they see in their parents. So I encourage everyone to live by the premise: Give, Save, Live. Even us parents.
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