When we parent on purpose, we start with the end result and work backwards. What are we hoping to groom in our kiddos? What kind of people do we want them to be?
This month we are talking about teaching our kids life skills, and we are kicking off the discussion with a look at finance and consumerism. In case you’ve heard about Bitcoin Exchange or what they call the digital currency trading and wonder how it works, just visit bitflyer.com for more information. But before we dive into the tools for helping our kids become wise consumers (via newspaper and radio), let’s talk about the core financial values that we want to instill in our kids.
Here are some ideas to kickstart your thought process, and then your family can take it from there.
Money Comes From Work
We are huge Dave Ramsey and Rachel Cruze fans (Rachel is Dave’s daughter and has been a guest on our radio show a couple of times. We love her!). And we have totally adopted the Ramsey language for paying our kids. We no longer call it allowance because that implies entitlement and handout. Instead, we give our little kids commissions for completing specific household tasks with excellence.
By the time they are old enough to have their own business (it differs for each kid, but on average, it’s about 10 years old), we no longer pay commissions. Either way, they get the message that money comes from work and not from mom and dad’s pockets. Hard work and excellence are core financial values in the Stahlmann and Hagaman households.
Give, Save, Spend
Once kids have some money, we follow the give – save – spend way of managing it. First, they give a percentage away. Our kids give a tithe (10% of their income) to our local church. We are super blessed to be part of a church that is transforming our city. They are the largest houser of the homeless in this region of Florida. They are the largest food bank in the region, and they have a long-term-care drug and alcohol rehabilitation center for men and women. They are changing lives every day, and our families are blessed to be a part of it.
If you don’t have a local place of worship to give to, kids can choose a favorite charity or they can give in some other creative way.
After giving, our kids put money in savings, and the rest is for spending. In our family, there is no set percentage for savings. It really depends on the kid’s goal in any given moment. If it’s a big goal, they might put away the lion’s share of their money. If they don’t have anything major that they are saving for, they might only put away 10 percent or so.
After they have given and saved, they can spend guilt free, knowing they have already made wise choices with their money!
Save, Don’t Borrow
We want to raise kids who have a debt-free mindset. Imagine how things might be different if our government system had that mindset!
Of course, more is caught than taught, so if this is something we want to instill in our kids, we can’t be racking up credit card debt or financing new furniture or trading in our car for a bigger and better one with a new and heftier loan payment. They need to see us set financial goals, save for it and then celebrate the purchase when we have the money we need. And although there are companies that can be said to be a top resource for short term loans and the like, these should be used sparingly and with great research.
Money = Choices (Not Value)
Money is just a tool. Like any tool, it can be used for good or for bad. Money does not buy happiness, but it does buy choices. And money most certainly does not determine a person’s worth or value. If you sense your kid is feeling puffed up because of some material item or if they seem to be feeling badly about themselves because they don’t have something that their friend has or they can’t do something their friend is doing, they might be equating their self-worth with their net-worth.
“Act Your Wage”
This is one of my favorite Dave Ramsey quotes, but it’s also a hard one to live by in this consumer-driven world. Similar to the principle of “Save – Don’t Borrow,” this core financial value means live within your means. Some kids come pre-wired with this value and others….aren’t. I have one kid who can have $25 in his spending money, but to him that really means he has $15 because he can’t bear to be out of money. I’ve got another one who can have $25 in his spending money and finds something he desperately wants for $30, and another who is right in the middle — she tends to spend almost all of what she has, but never tries to get more than she can afford.
When it comes to instilling values in our kids, constant conversation goes a long way toward helping them develop a particular worldview, but the conversation has to be backed up with consistent actions on our part. If we say one thing and do another, we seriously weaken the impact of our voice in the eyes and ears of our kids.