5 Ways to Create Financially Fit Kids
In this post you will learn 5 habits to teach your children to help them become financially fit adults.
Lottery winners spend their prize money in an average of three years. About 70% of them eventually end up filing for bankruptcy, according to several studies. These staggering statistics prove that we parents have a lot to teach to our children about financial fitness (and perhaps, a lot to learn ourselves). More money, even millions of dollars, does not guarantee security, stability, or satisfaction.
So what can we teach our children, and what habits can we start to engrain in them to help them become financially fit adults?
1. Contentment
Scripture tells us that Jesus is our satisfaction (Psalm 37:4 and others). Examine how you model contentment or the need for more stuff to make you happy. Notice how much time your kids see you shopping online. Beyond being able to afford basic needs, study after study proves money does not buy happiness. To maintain that happy feeling you get when you buy something new, you have to keep doing it; it’s a never-ending cycle. But Christ is the source of our never-ending contentment. A great way to help build contentment is through expressing gratitude. Make it a part of your nightly dinnertime conversation or ask your kids name three things they’re grateful for each night before bed.
2. Tithing
Scripture tells us that the Lord is our provider (Deuteronomy 8:18, Psalm 147:8, and others). Everything we have belongs to him. Getting your kids in the habit of tithing – giving 10% of birthday money, allowance, etc. – helps them adopt this mindset. To realize all our money is God’s helps us feel the responsibility of stewardship. Our money is not ours to spend, but God’s to steward.
3. Earn It
Kids need to understand all those fun things and extras they want are not free. I don’t necessarily mean they cost money, I mean they need to be earned. Establishing an “earn it” mentality demonstrates the benefits and rewards of work. It also helps them appreciate what they get. If they want a new app or a new toy, they earn it through chores or good behavior. This doesn’t mean you can never surprise them with an ice cream cone simply because you love them, but for the most part, extras should be earned.
4. The 2X Rule
Getting a child to save up their allowance or birthday money for something special they want is a great way to communicate the value of money. To cement this in their heads, have them save twice as much as they want to spend. Not only does this provide more time to consider their purchase, it shows them you must always have a cushion. Spending 100% of your money is not wise.
5. Be Open
Somewhere around age 10, kids start to notice their home is smaller or bigger than that of their friends. Friends seem to have more toys and clothes or go on more vacations. This piques their curiosity about money. When they begin to ask, share age appropriate information about your finances with them (making it clear this is information is not to be shared with others). Show them your water and electricity bills. Have them help you create your monthly budget. Include them in conversations about the costs of groceries, activities, and the importance of saving for later.
Financial fitness is about a mindset, not achieving a certain level of income. The more you establish this in your kids, the better off they’ll be! And above all else, we want to teach our children to honor God with what we have been given.
Warmly,
Lauren
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