Last week we talked about some principles for teaching our kids about money, focusing on giving and saving. This week we'll talk about a financial principle that's a lot more fun: spending. I'd love to hear your thoughts in the comments!
“One for God, one for saving, two for spending.” Our family mantra.
B learned it another way when he was growing up: “Give ten percent, save ten percent, and spend the rest with joy and thanksgiving.”
Those numbers may have been tweaked a bit over the years, but the principal remains: if God has blessed you with money to spend, enjoy it. Don’t squander it, make sure you’re giving, but also don’t feel guilty about it.
When our girls were younger we adopted an allowance principal that my parents made up for me when I was a teenager. It taught me so much about how to budget and how to handle money that we thought it was important to share with our girls. (Let me say right here that I know lots of parents who have different philosophies about allowance. This is just what has worked for us.)
Once our girls reached high school we put them on a bi-weekly allowance. Their allowance is an amount that B and I decided upon together, one that we feel is fair, that allows our girls to pay for their clothing and entertainment expenses. We still, however, expected them to tithe on their allowance. If they don’t feel like they have enough money for all of their expenses, then they needed to get a job to make up the difference.
Believe me, as a parent this freed me up so much because I didn’t have to make on-the-spot decisions about whether I could afford to pay for this expensive pair of jeans or that trendy top. The girls had to make those decisions for themselves based on whether they needed it, wanted it, or could afford it. I didn't have any input, and the way I saw it, the whole situation was a win-win all the way around.
As soon as our kids turned 14 (the youngest age our bank would allow) we got them a checking account and a debit card. This way they could write checks to church for their tithe and transfer money into their savings account using the ATM machine. (Today they do all of that online.) We also wanted them to have the responsibility of paying a bill each month, so we make them pay for a portion of their cell phone bill.
Some of you may be reading this and thinking, “Wow, that’s harsh! Making your kids pay for their own clothes AND camp (see last week’s post) AND still give some away. What do your kids think about it?”
Well, I asked them, and they all said they liked the allowance concept because they didn’t have to run to me for money all the time. They could make decisions for themselves about whether they wanted to pay to see a movie with their friends or whether they wanted to save their money for something else. If they wanted to buy expensive jeans, they could; if they preferred to buy cheaper jeans and something else, they could do that too.
As I was writing this post the first time around I asked Kate, who was almost 18 at the time, about some of the financial lessons she had learned over the years. Here’s what she told me.
• It’s very easy to get into trouble with your money. You must be very wise with how you use it.
• Saving money now will make you happier later. (At this point I thought I had to do some re-teaching, but Kate clarified her point. She knows that money does not bring happiness, but what she meant was a sense of security, maybe a sense of peace in knowing that there is a little money saved up for the future.)
• She said she’s learned the value of a budget through getting an allowance. Getting into the habit of paying a bill every month has been good too.
• She said it has been good to do her taxes with her dad instead of him doing it for her. B takes the time to walk through the tax form with her each year, showing her how it’s done rather than just having her sign on the bottom line.
• It’s O.K. to spend money on yourself . . . as long as it’s not in excess.
• She also learned the importance of staying out of debt. (This is a biggie for a kid! Start teaching them this NOW!)
Kate’s final comment to me really made me stop for a second. She said, “You and Dad have prepared us to be poor when we get out of college.” She said that our stories of really struggling in those early years have made an impact on her, and they made her realize that she probably wouldn’t have much money right out of school. And that’s O.K.
She also said that too many kids her age just think that they will get out of college and live the way their parents live. Kate knows that she will have to work for what she has, she’ll have to budget with what she has, and she will have to be a good steward of her finances because, after all, it’s God’s money in the first place.
I warned her that there are no guarantees that she’ll have much money EVER, and that’s O.K. too. In the day and age we’re living, we really need to give our kids a realistic picture of what may be ahead for them. (Believe me, my financially savvy husband does not paint a rosy picture of the economy.)
But by giving our kids some good, solid financial principals to live by, they can be on a healthy path toward financial freedom. By helping them to become good stewards of their money now, we are helping them to, hopefully, stay out of financial trouble later.
Now talk. What have you done to teach your kids about money? What changes do you need to make to teach your kids sound financial principles? Leave me a comment!