215 – Teaching Children Good Money Habits

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Teaching Children Good Money Habits

It’s never too early to begin teaching your kids good money habits!

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Welcome to this unique episode on teaching your children good money habits! It’s never too early to start teaching your little ones the importance of saving and giving, as well as working hard to earn your finances. Bob and Shawn go over several ways to help instill good money routines into your kids – starting from easy concepts for little ones to more abstract ideas for older children. So, sit back, listen, and grab a pen and paper to write down these tips when it comes to teaching your kids good money habits.

Mentioned In This Episode

Bob (00:00):
Pay them for jobs around the house. Examples can be taking out the trash, mowing the grass, washing the dog, vacuuming the car, cleaning the windows. But you notice what I have here, there’s some things I don’t think you should pay for.

Shawn (00:21):
Welcome back to Christian Financial Perspectives. I’m Shawn Peters. This is Bob Barber, and today we have an exciting episode for you on teaching children good money habits and as a father of two young children, one 6, one almost 3. I’m definitely taking this one to heart, not just from a, “Oh, I’ve already got this handled, but definitely going to be something that I’m going to have to continue to work on and make sure I’m leading by example on what we cover today.” You’re a little bit further down the path. Your children are slightly older than mine, right?

Bob (00:55):
Well, one of them is your wife.

Shawn (00:56):
One of them is my wife. Yeah.

Bob (00:58):
So this comes about truly from 35 to 40 years of experience in teaching.

Shawn (01:06):
No mistakes ever, right?

Bob (01:07):
I’m sorry.

Shawn (01:08):
No mistakes ever, right?

Bob (01:09):
None. Never any mistakes. Everything was always perfect.

Shawn (01:12):
It’s amazing. That’s how that works though, right? The longer the memory is from ago, I guess you’d say the longer the time period, the rosier it always seems to be like, “Oh, I don’t remember the bad stuff.”

Bob (01:25):
Yeah. Well, I dunno about, but I think that’s why I have all this gray, and I tell you right around this Christmas season, your children are off for a couple of weeks and it’s a good time because you’re going to be with your children because they’re going to be out of school. And it’s a good time to kick this off and to not only take these principles during that time that we’re going to tell you today to teach to them, but to teach them throughout life. And there’s no perfect children, no one’s perfect. And I always love what our church says. If you’re perfect, you don’t want to come here because we’re a bunch of imperfect people. But these principles are time proven principles that you can teach to your children. Proverbs 22:6 tells us that, “Train up a child in the way he should go. And when he is old, he will not depart from it.”

Shawn (02:15):
Amen. That’s right. Teaching your children good money habits can help them become more responsible, healthier, and happier adults over their lifetimes.

Bob (02:23):
Yeah, it’s over a lifetime. And the way that you, and I’m pointing to myself when I say this, I mean, every time you point a finger at somebody, you got three point right back at you. But the way that you handle money personally yourself is also very essential because those children are watching how you give and save and spend and how you invest.

Shawn (02:47):
That’s right. That’s right. So the lead by example is very important. So from the beginning years, we must teach these, as we’re going to be covering, these nine things to our children and grandchildren, which we will be discussing, going with number one, teach them simple mathematical skills.

Bob (03:07):
I tell you, I had so much fun with this. We used to go to school – and everybody’s going to say, okay, I know how mathematical minded you are – with my children. I’d say, so what’s 305 plus 610 at five years old? But I was teaching them math and we started talking about math when they were like three. But just teaching simple addition, subtraction, multiplication, and division. Here’s the key – without using a calculator, they need to learn to do math. Simple math, I mean like 9/3 is 3. 27/3 is nine. I mean, just a simple math like that they need to learn, and they need subtraction. They’re going to use this throughout life, especially in how they handle money. And I like the pay, we used to pay our three in $1 bills or all kinds of different denominations like pennies, nickels, dimes, quarters.

Shawn (04:11):
Which is good practice to have to add up the different kinds of denominations.

Bob (04:15):
That’s right. Let them add all that up when they’re saving them and subtract when they’re spending. When we would spend money, I’d say, “How much are they supposed to give you back now?” If you gave them a dollar and it cost 73 cents, nothing cost 73 cents anymore, but it did 30 years ago.

Shawn (04:32):
Sure.

Bob (04:34):
How much are you supposed to get back? “Lemme see, Dad. Okay, that’d be 27 cents.” There you go.

Shawn (04:39):
Yeah, that’s right. And then number two, teach them to divide money every time they make it into three basic categories: give, grow, and spend.

Bob (04:50):
And you can get some jars to do that. Some glass jars or some plastic jugs, however you want to do it. But you label one of them “give”, one of them “grow”, one of them “spend”. So when you give them money for chores that they are doing around the house, they put a little bit in each one and they watch that grow. And this really teaches them good habits because giving is part of that – growing, investing, saving.

Shawn (05:20):
And the three categories are great to see this visualization of the jars because then in later years, they’re not going to be using jars, but actually having a bank account, investment accounts. And so it’s a visual that also helps them practice the principle of, okay, you have money coming in, there are certain ways you can use that money. So be practiced with dividing it up.

Bob (05:45):
And now the world’s way to do it is just all spend, right?

Shawn (05:49):
Yeah.

Bob (05:49):
It’s not give and it’s not save for the future. It’s just all spend.

Shawn (05:52):
And we also teach the give, grow, owe…

Bob (05:54):
Live, Give, Owe, Grow.

Shawn (05:57):
Sorry. I was like, wait, I’m missing one.

Bob (05:58):
We teach that here.

Shawn (05:59):
I think especially for a kid that give, grow, spend is probably just a little easier for them to wrap their head around.

Bob (06:06):
They don’t have to worry about the owe part right now. They don’t have to worry about the taxes or the debt. And of course, we try to emphasize that you don’t go into debt for things especially that depreciate.

Shawn (06:17):
And that takes us into number three, teach them work is good. And in Genesis, if you look at the story, you see that God gave Adam and Eve work before the fall, before sin.

Bob (06:30):
Yes.

Shawn (06:31):
And so the principle of work, God first modeled it through the creation story and then gave mankind a work that they were supposed to do. It’s just that sin made things harder and added some extra challenges to it.

Bob (06:47):
Yeah, the weeds.

Shawn (06:47):
But work is not a byproduct of the fall. And I think that’s something that’s very important to teach our kids.

Bob (06:55):
And work appears in the Bible – you can do this yourself. You can just go to the biblegateway.com and put in the word “work”. You’re going to see that it appears in the Bible more than 500 times. And I use the NIV version a lot or the New American Standard, NASB, and it’s over 550 times. So work appears a lot in the Bible. We’ve talked about this many times, retire only appears one time. So work is a good thing. And pay them for jobs around the house. Examples can be taking out the trash, mowing the grass, washing the dog, vacuuming the car, cleaning the windows. But you notice I have here, there’s some things I don’t think you should pay for.

Shawn (07:36):
Don’t pay them for things that they should be doing as responsible people. So for example, they made their own bed, they cleaned up after themselves, maybe after dinner or something like that, or after they’re playing with their toys. Because when we pay our kids for these things that should just be part of being responsible, you’re teaching them that, “Oh, you should just get paid for anything and everything that you do.” It’s like, well, no, no, no, there’s responsibility and then there’s work. You’re actually doing something that’s outside of just your normal responsibilities. And so, I think this is definitely a big part of helping them to not be spoiled and have an entitlement mentality, but know the difference between responsibility and work.

Bob (08:18):
Yes, that’s right.

Shawn (08:19):
Number four, teach them that things cost money.

Bob (08:22):
Yeah, they do. They sure do. And that’s why you need to teach them a little bit about budgeting for clothing or a game or a toy they want to buy. They’ve got to save for that.

(08:31):
Rhonan is right at that level where I have this conversation and he’s like, “Well just buy it.” Or it’s like it is like, “Well Dad, I’ll give you money and then you can buy the thing that I wanted.” It’s like, Rhonan, where are you going to get the money from? And then it’s like, oh wait, I don’t know.

(08:48):
So he needs to save up for it by doing some chores that are out of the ordinary. And when it comes time to buy that, they can go into that spend jar and pull that out so they can experience firsthand this is costing money. Right? And going to the store and…

Shawn (09:08):
And having to hand over…

Bob (09:09):
The cash to the cashier.

Shawn (09:10):
Exactly. That’s right.

Bob (09:11):
And then remember that math we told you, having them tell me, yeah, this is how much I should get back and this is real time. This is not a debit card. They’re watching it leave their hands, and they know, “Wow, I had to work for that.” So maybe they don’t need that extra toy as bad as they thought they did.

Shawn (09:30):
Once you buy that toy, you don’t have the money anymore to buy the next one, unless you earn it.

Bob (09:34):
That’s right.

Shawn (09:35):
Number five, be their best example.

Bob (09:38):
Nothing works better than your children seeing you giving to a worthy cause or saving for the future. Spending wisely. Investing. They see that. They also see when you’re using those credit cards and if you’re being reckless about that and you’re buying endlessly on impulse without even thinking about it, they’re watching and they see that. And don’t be surprised if you’re doing that when your children get older, if they’re going to do the same thing and find themselves in high debt.

Shawn (10:09):
One thing on that for being the example is talk about it. I know my wife and I, we don’t hide the fact that we’re, well, we don’t have enough money to buy this or that, or we can’t go on this trip just yet, or whatever the case may be. And we try to use that as a teaching tool that it’s not just that we’re having this conversation, but it’s also, I want Rhonan and Ophelia, I want them to hear us talking about this delayed gratification. We’re not just like, oh yeah, just put on the card. It’s like, no, no, we’re saving up for that. Or that’s something we want to do, but it’s not really in the budget today, so we’re going to work towards that. And so I think making that part of your practice is not only helpful for yourself, but again, is a great way to be that example to your kids. So number six, show them the importance of giving.

Bob (10:58):
This was so big growing up. And when we would tithe to the church when we were in church on Sunday morning, I would give the check to one of our three children and let them open it and their eyes would get really big. That was a lot to them. And put that in the offering plate. A lot of churches, they don’t do the offering anymore, and I think they ought to because I think it’s a time of showing who it all belongs to. But a lot of churches, they’ll have at the back of the sanctuary.

Shawn (11:33):
Well, if that’s the case, Bob, I would encourage anyone listening, watching, that if your church doesn’t pass the offering plate, then make it part of your normal giving routine that you have your kids actually take some of the money your family’s giving and go put it in there either right before or right after the service starts. So they get to participate in that. And I would argue, I totally understand, Jenna and I do the same thing. It’s set up on an ACH, it’s automatic, but you could hold a little bit of that back and have actual cash. So it’s just part of it. But that’s something that your kids can see some of the money that’s going in and participate.

Bob (12:09):
And also of course, they have their giving jar.

Shawn (12:10):
Exactly.

Bob (12:11):
So, they can take from the giving jar and they can decide, give some of this to the church. Maybe I want to give some of this to somebody that needs a meal. And those are all good things, and it’s very important, as you know, maybe you don’t know, but giving breaks the chains of materialistic thinking.

Shawn (12:30):
That’s right. It forces you to focus on someone other than what’s inside the circle.

Bob (12:36):
And we’re getting down to the last two or three.

Shawn (12:39):
So number seven, teach them contentment.

Bob (12:41):
Yes. And let your children see, I know they see this in you, Shawn, because you drive an older car.

Shawn (12:50):
That’s right. We’re right at the 10 year mark. We’ve done some maintenance on it. But I’m really excited to maybe have Rhonan drive that as his first car if we maintain it.

Bob (12:59):
I think it’d be good for him. And he’s not watching that, “Oh well dad, mom, have to buy a new car every year or every two or three years.” They’re seeing that you’re content with driving that car and you’re taking good care of that car. You get the brakes changed.

Shawn (13:14):
Certainly less electronics issues too, so there’s a practical value to it as well.

Bob (13:19):
A reliable car is good to drive. It doesn’t have to be a brand new one or a vacation. It doesn’t have to be the other side of the world.

Shawn (13:26):
Yeah. We like to go camping. So instead of we’re going to do something fancy, like, well, we might drive a couple hours away and go camping and hiking and just be out in nature.

Bob (13:36):
There’s a good scripture and Paul, he talks about, “I’ve learned to be content and no matter whether I have plenty or whether I’m in need,” finding contentment and not in material things.

Shawn (13:50):
And number eight, as we come to our second to last one, teach them the value of working for others or starting a small business. Bob, you have a few examples for this.

Bob (13:57):
I’ll tell you, I learned so much. When I was a kid, I had a lemonade stand and my grandma helped me. I remember selling lemonade all summer long and going to people and giving them a cup and saying, “Would you like a cup?” And they go, “Well, we don’t really want to buy a cup.” I say, “Well here, try it.” And they would try it and they’d say, okay, we charged the nickel back then. Or washing the neighbor’s windows for money or dog and cat babysitting is a big thing today. But there are good examples of working for others or being an entrepreneur. I think it’s great to teach – my dad instilled within me free enterprise and that we live in a free country where you can start your own business.

Shawn (14:41):
That’s right.

Bob (14:41):
And make it on your own.

Shawn (14:44):
And so to wrap up quickly here, number nine, teach them the importance of scripture and what it teaches about money management.

Bob (14:52):
And I think Proverbs, for me, has been the number one book in the Bible on money management. I’ve never seen anybody hurt by following all the wisdom principles of finance that is found in Proverbs. It is amazing. There’s 31 books of Proverbs, and many months have 31 days.

Shawn (15:13):
You’ve got to double up on some months.

Bob (15:15):
You may have to double on some months. But it teaches so much about it, about how to handle money, not getting into debt. saving little by little. Proverbs 13:11 is one of my favorite ones, “Save little by little and watch it grow.” But there’s many other good scriptures, too. And I think Psalms 24:1 is one of the best ones, don’t you?

Shawn (15:35):
Yep. “The Earth is the Lord’s”. 2 Corinthians 9:7, the earth, sorry,”God loves a cheerful giver”. Matthew 25:14-30, “The Parable of the Talents”. And Proverbs 13:11, “Saving little by little”.

Bob (15:47):
All these are stories around them. You can really use a story around “The Earth is the Lord’s” and what does that mean? Well, that means everything and about giving. The parable of the talents is a very long book to read. But you can get into talking and maybe show them, here’s three pennies. Here’s five pennies. Here’s one. And use examples to teach your children and take that scripture to real life.

Shawn (16:10):
Yeah. Well, thank you for joining us. Our hope is that you will have many teachable moments with your kids or grandkids depending on family situation during this Christmas and holiday season and in the following years. If you ever have any questions, comments, feel free to call or text at (830) 609-6986 or hit us up in the comments. We’d love your feedback. Thank you and God bless and Merry Christmas.

Bob (16:35):
Merry Christmas.

[DISCLOSURES]

* Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.