Children and Finances
Written by Rev. Dr. Scott Paczkowski
“The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to want. ”
Family finances can provide blessings or pain. Debt is one of the main reasons marriages suffer. The earlier in life we learn to control our finances, the better we will be at not allowing money to rule our lives. Simon Hill in wired.com wrote a fantastic article I shared with my daughter and her husband. The report is entitled “How to Teach Your Kids About Money.” Hill surprised me when he said, “Research in the UK from Cambridge University suggests that the money habits kids will carry into adulthood may be set by the age of 7 years old.”
Parents need to begin talking about money earlier than most imagined. Hill continues, “…children are aware of the concept of money, usually around the ages of 4 and 5.” Mary Gresham, an Atlanta-based psychologist who specializes in finances and families, recommends, “Give an allowance and then have your children divide the money into four categories: spend, save, give away, and invest.” You may decide to provide matching funds for what your child saves, gives away and invests, to affirm the benefits of saving and caring.
The article recommends discussing family finances with children and allowing them to ask questions and express their opinions. When your child makes a purchase, wait a few weeks, and then ask the child if she/he made a good choice? It helps the child reflect on purchases made. Further, children now live in the digital age and need to learn how to become comfortable with manipulating their finances online. Hill recommends having children use an app like “RoosterMoney” to create savings and give to charity. Talking openly about family finances also helps children see their role in family spending. Hill said, “my daughter pays toward our Disney+ subscription, and my son chips in for Microsoft Game Pass.” When the child is older and preparing for life after High School, these responsibilities will not be a surprise, and the parent(s) will be able to guide and instruct while the child while still living in the home.
Today, pray for the courage to discuss finances with your children or grandchildren. It can feel embarrassing if your financial situation is not ideal, but even struggles are learning moments. Discussing what got you to this place and the plan to improve can be beneficial. A little discomfort is well worth providing the wisdom to make sound financial decisions as he/she grows older. Throughout the process, pray for God’s leading so you can speak in a way your child(ren) can understand at each stage of their development.
