How to Raise Financially Responsible Children

As parents, we typically desire our children to want for nothing — to be well provided for and never even think about money. But in reality, it is more beneficial for our children in the long run to teach them about money from a young age, even if it might be a little awkward at times. Introducing the concepts of budgeting and how to manage money responsibly makes the concept concrete as they grow into adults who will be responsible for their own finances. It is our responsibility to each our children how to spend less than they make, save for the future and be generous with others. So how do we do it? Here are a few tips on how to instill financial responsibility in our kids.

• Let them manage real money. From a young age — even preschool — kids can understand the concept of managing money. By setting up a structure in which your kids are given an allowance (whether earned by chores or given as a gift), then required to put away a portion for the future, you are giving them tangible lessons on money management. As believers, we are also called to be generous. You can encourage your kids to do this by using labeled jars for giving, saving and spending, or even opening a savings account for them. The generosity fund can be used to bless another child in need with a gift at Christmas time, or as your family hears about needs in your own community. You may be surprised how much they love blessing others with their own money.
• Teach the concept of delayed gratification. Most adults struggle with this, let alone kids. In a world where everything is at our fingertips and increasingly near instantaneous, it’s more important than ever to help our kids be ok with waiting. If your child sees something they’d like to have in a store or on T.V. and it is more money than they’ve saved, be sure to stay firm and let them earn the rest of the funds to purchase it over time. This will teach them not only that we work for what we have, but that sometimes we have to wait for it. It will also help them be more invested in their purchases emotionally, having had to work and wait for it. If it’s not worth the work or the wait, they won’t buy it. Plus, it will mean more to them when they finally are able to get what they want. These tangible experiences will help them grow up with a sense of how money works in the real world.
• Start a job board. A job board is a great way to teach your kids about earning money in addition to what they are required to do around the house. If they’d like to earn more money or are working toward a goal, you can establish a job board of tasks outside their typical chores they can choose to accomplish to earn more cash. Try putting a dollar amount next to each task so they will know how much they can earn for each job. This teaches financial responsibility as well as how to take initiative to get what you want rather than waiting for someone to give it to you.
• Teach teens about budgeting and bills. As your kids grow, it becomes more important to put real-world stakes in place. Begin to introduce your pre-teens to what things actually cost — cell phone bills, gas, restaurants — so they understand that a quick swipe of a card doesn’t mean it didn’t cost anything. For older teens, consider requiring them to pay their portion of a cell phone bill and for their own gas. Expenses for older kids add up, so a part-time job is a perfect way to teach your kids how to earn, save and budget — not to mention develop a good work ethic. In addition to bills, entertainment like going to the movies with friends or to a concert can then be paid for by the teen themselves.

They may not always like it, but teaching children how to manage their own money in a responsible way will be far more beneficial to them in the long run than paying for everything yourself. They will gain a sense of ownership in their lives and pride at having done something for themselves.