Chapter 21
Teaching Children about Money and Possessions
Sharper than a serpent’s tooth it is to have a thankless child. WILLIAM SHAKESPEARE
The less I spent on myself and the more I gave to others, the fuller of happiness and blessing did my soul become. HUDSON TAYLOR
This chapter is a practical follow-up to the last. It assumes that you are committed to teaching your children to be good and generous financial stewards.
Learning the Hard Way
Children learn by experience, both good and bad. Consequently, my wife and I occasionally allowed our daughters to make poor financial decisions, such as spending impulsively. This was hard for me. My impulse was to always explain to my kids why they should hang on to their money instead of wasting it on this little bauble or that sixty-second horsey ride. But I found that if it was always their parents’ decision, even though they were reluctantly practicing obedience they weren’t learning wisdom.
When we occasionally began letting them buy some of the things they wanted, they started learning for themselves, the hard way. When something of true value came along, they couldn’t afford to buy it. Meanwhile, the little trinket they bought last month was lost, broken, or of no interest. Now they wanted to buy a book they could keep and read and share, but they couldn’t because the money spent on the fleeting pleasures of plastic rings and colored stickers was gone forever.
We must be careful not to bail out our children by saying “Well, I guess you learned your lesson, so I’ll get you what you want.” On the contrary, the only way children will learn their lesson is by being allowed to face the consequences of their own unwise spending. If we can keep ourselves from interfering with the natural laws of life, mistakes can be our child’s finest teachers.
When a child loses or breaks a toy, a parent who feels sorry for the child will often replace the toy with a new one. Meanwhile, the child is deprived of learning the way life functions. You must care for things, because there are consequences to having them lost or broken. If the consequences are removed, the wrong lesson is learned: “It’s okay to be careless because you get what you want anyway.” The wrong behavior is reinforced rather than corrected.
If a twelve-year-old squanders his lunch money, what should his parents do? Nothing. He must earn some more money, use the money he’s saved, or go without lunch. The lessons of life are very simple and effective—if we will just stay out of the way!
“But what if it wasn’t the child’s fault—what if someone broke his toy or stole his money?” Aren’t there many losses and misfortunes in life that aren’t the fault of the person yet must be accepted and dealt with? A child whose toys are replaced and whose money is replenished by parents never learns the way life operates. He’s not being prepared for the real world of stewardship.
Suppose your child wants a bicycle. You could get him a decent used bike in a garage sale for twenty dollars or even free if you checked around. But perhaps this isn’t good enough for him. He wants a brand-new bicycle like his friends have. One way to teach him the cost of having nice things is to tell him that if he really wants it, you’ll loan him the money at the going rate of interest. Work out a payment schedule with him, showing him how much this $100 bicycle will really cost him and how long it will take to pay it off.
At this point, he may back out of the deal. If so, good for him. But if he doesn’t, let him go ahead. By the time he pays off the debt from miscellaneous chores—perhaps as much as six months down the road—he will never forget the cost of borrowing. By then a used bicycle—which is what his briefly beautiful bicycle is by now—will sound much more attractive. The lesson he learns can give him wisdom later when it comes to buying a car, a house, or anything else.
Nanci and I are pleased to see our daughters and their husbands consistently making wise and generous financial choices. We’re grateful that both our sons-in-laws’ parents helped instill this same kind of wisdom in them. That is an enduring legacy, and a precious one.
As parents, we should help our children learn to associate money with labor. Money and possessions do not fall out of the sky. They are earned through work—good, hard, and well-done work. We can encourage our children to work at tasks, make things, and sell them. We can teach them that work can be meaningful and fun as well as financially profitable.
A common mistake that parents make is to dole out money to children arbitrarily as life goes by. This teaches them to believe money has no cost, that it comes easily or automatically. As a result, they disassociate money from work. They begin imagining it’s their right to have money even when they haven’t worked for it. It’s this faulty thinking that later puts able-bodied people on welfare. Although the government fosters this kind of handout mentality, the attitude itself is—tragically—usually learned at home.
Children will always appreciate bicycles, athletic equipment, and favorite clothes much more when they’ve worked for them. The child who receives a new car as a gift on his eighteenth birthday is going to have a very different value system than the one who works hard, saves up his money, and makes his own decision to buy an $1,800 car rather than a $12,000 car.
Although money should be associated with work, not all work should be associated with money. Children shouldn’t always be paid for their chores. However, there are many “extras” that can legitimately be rewarded financially. There are jobs outside the home that children can take on as they grow older—including paper routes, washing cars, mowing lawns, and babysitting.
However we do it, it’s important that we teach our children a work ethic. On the other hand, it’s equally important that children learn to put work and other commitments in their proper place. When I was a youth pastor, I saw many teenagers suffer spiritually because they regularly missed church, youth group, and special retreats due to jobs, athletics, music, school activities, and other commitments. Although all these can be good, something’s wrong when, as a result, a student misses vital opportunities to cultivate his or her spiritual life. Any young person who is encouraged or allowed by his or her parents to put other pursuits above ministry, fellowship, and the teaching of Scripture, will live out those same principles as an adult church member—if he or she isn’t too busy making money to go to church at all.
Children learn the value of money and the discipline of self-control through saving. If your bank doesn’t permit small accounts, it’s possible to put your children’s money in your account and keep deposit and withdrawal ledgers between them and you. Pay them the same interest rate you are earning. They will be impressed to learn firsthand that saving money produces even more money. As soon as they have enough to open their own account, this is ideal.
Children need reasons and incentives to save. If they want a major item, say a telescope, help them develop a plan to save for it over a period of six months or a year. Perhaps they’ll be able to save fifteen or thirty dollars a month. Help them think of jobs to accomplish this goal. If they stick with their plan to save money over a long period of time, buying that telescope won’t be an impulsive decision. And once they’ve earned it, they’ll be more likely to take good care of it.
Children should be shown how to save both for short-term and long-term purposes. They might be saving to go skating this weekend. Or they might be saving to buy a sleeping bag three months from now or have spending money on a major family vacation a year from now.
Many parents know what it’s like to have teenagers go to costly school events. Kids may want to buy expensive dresses or rent tuxedos and go to fancy restaurants. Frustrated parents have told me that between the clothes and the dinner, it’s common for such evenings to cost several hundred dollars.
Any parent who automatically picks up the tab for such events is doing the children a terrible disservice. If your teenagers believe that these events warrant that kind of money, they need to work for it themselves—months in advance, if necessary. Then and only then will they understand the cost. When working for something is the only alternative, it’s amazing how many creative options young people can come up with and still have a great time, including borrowing nice clothes, using “old” clothes, and choosing a “cheap” place for dinner. Of course, if parents think nothing of spending huge amounts of money for a single evening out, their children will learn the same values.
We helped put our daughters through college, just as our parents helped us. However, I don’t believe that parents should automatically pay for their children’s entire college education. Sometimes they can’t. But even when they can, in some cases it might be better if they didn’t. When young people spend a year after high school working to earn money for college, they develop character and financial responsibility.
One family in our church promised to pay exactly half the cost of their children’s college education. Their son went off to school and had a great time but failed three classes. So they modified their arrangement. He would have to pay all the tuition up front, then present his report card at the end of the term. At that time, they would reimburse him half the cost of all courses in which he achieved a C or better. These are wise parents who see the importance of incentive and responsibility. They understand what many parents don’t—that the quality of a college education often improves dramatically when the student has a substantial part in paying for it.
I suggest a separate college savings account for the children into which both parents and children regularly contribute from the time the children are young. In some cases it’s possible to do this under the federal government’s Uniform Gift to Minors Act, so that the interest generated by this account is taxable on the children’s income instead of the parents’. Usually this means that the taxes will be much lower or nonexistent, depending on the child’s overall earnings.
Because some savings can be channeled into investments, children can also be taught about the stock market. When I was a grade-schooler, picking berries and harvesting cauliflower in the summer, my father encouraged me to take some of the money and invest it in stocks. This was very interesting and rewarding. Although I made a fair amount of money on the transactions, even if I hadn’t it would have been well worthwhile. I came to understand at an early age how the stock market and our economy work. That knowledge has been very helpful ever since.
The most fundamental lesson any child can learn about finances—even more important than saving—is the lesson of giving. As parents, we should teach our children to give. This is more than simply taking our own money and handing it to our child to put in the offering. In such cases the child isn’t giving—she’s simply delivering our gift. In order for it to really be giving, it must come from what actually belongs to the child.
We taught our daughters to tithe from the very earliest age. No matter where their income came from, even as a gift, 10 percent belonged to the Lord and it was untouchable. If Grandpa gave them ten dollars for Christmas, the question was never, “What can I do with ten dollars?” but “What can I do with nine dollars?”
I’ve read several sources that say emphatically, “Don’t require your children to tithe.” I disagree. That advice makes no more sense to me than to say, “Don’t make your children wash their hands before a meal, or wear coats on a cold, windy day, or put away their toys, or go to church.”
For those who say, “But giving must be from the heart, not imposed by someone else,” I’d respond, “But giving is also a habit, and like all good habits it can and should be cultivated.” There’s no better way for a parent to cultivate giving than by making it one of the family’s standard practices.
I know people raised on the tithe who would no sooner stop tithing than brushing their teeth. Tithing is so ingrained in their family that the children never express a desire to forgo it. It would be as unthinkable not to tithe as not to close the refrigerator door, not to turn off the faucet, or not to pray before a meal. Of course, keeping to a routine is no guarantee of spirituality. But the holy habit of giving is like the holy habits of Bible study, prayer, witnessing, and hospitality. These things need to become part of our lifestyle. Those raised without these habits are at a great disadvantage trying to develop them as adults.
We first started giving our girls a salary of fifty cents per week when they were ages three and five. We called it a “salary” because they had to do certain tasks to receive it. “Allowance” often means regularly doling out funds with no commensurate responsibility. One nickel of that fifty cents was sacred, designated to the Lord. They’d often choose to give more than this, and we encouraged them to do so, reminding them that true giving starts after the tithe.
But when our daughters chose to give more, they did it fully aware that they’d worked for this money and that giving it away would leave them with less money to spend. We didn’t intervene and reward them for their giving by compensating for what it cost them. To do so would have been to violate the essence of giving. We should let God reward as he wishes, in his time and his way, and not interfere.
Whenever one of the girls would say, “This week I want to give all my allowance,” we were careful not to stifle her spirit by teaching her to be “reasonable.” We wanted our children to give as their hearts were led. If this meant giving “unreasonably” as the widow of Mark 12 and the Macedonian believers of 2 Corinthians 8, then so be it. That would put them in good company! (In fact, no matter how much they give, our children will still live in unimaginable wealth compared to these Bible figures.)
When the girls were seven and five, I gave each of them three jars I’d labeled with their names and the designations “Giving,” “Saving,” and “Spending.” I told them that every time they earned their salary (which was by then one dollar per week) they were first to put at least 10 percent into the Giving jar, then distribute the rest between the other two jars as they wished. But once they put money in the Giving jar, even beyond the tithe, it was dedicated to the Lord and they couldn’t take it back. Every Sunday morning, they’d empty their Giving jar and take it to the offering box at church.
Once they put money in Saving, they weren’t to take it out and spend it except for some upcoming special expenditure. However, they were free to transfer money from Saving or Spending to Giving, or from Spending to Saving. As the jars were lined up, it went like this: They could transfer money to any jar on the left, but never to a jar on the right.
I will never forget the night I explained this new system to my daughters. They were so excited they immediately took the money they already had and distributed it between the jars. They arranged the jars just right on their dressers and spent hours figuring things with pad and pencil while their dinner grew cold. My seven-year-old asked me to show her how to figure percentages on our calculator. She was writing on labels, completely on her own, “Giving: 20¢ a week,” “Saving: 30¢ a week,” and “Spending: 50¢ a week.” For years, the use of these jars stimulated conversations about their money management. This simple system probably resulted in more financial education than anything else Nanci and I did.
Children can’t learn money management unless they have money to manage and unless that money is earned by their effort. I can’t overemphasize this point—parents who shovel out money according to the dictates of the moment are not teaching their children proper stewardship.
The Giving Family
One man wrote to me, “My wife and I have taught our kids from the earliest days to be regular givers to God and his kingdom purposes. Our family has been blessed with four young adults who love Jesus, and I believe that our faithfulness in giving has contributed to that. God’s returns are not always financial.”
When I asked a group to share their giving stories, one man, Daniel J. Arnold, told me, “Giving to the glory of the Lord Jesus Christ and the expansion of his kingdom on earth has become the common purpose of our family, our co-mission. We test the will of God for us in prayer and come together in agreement on every gift. Giving enters us into a life of faith and trust in God.” Like everything else in the home, stewardship is caught as much as taught.
I recommend that families get involved together in special missions projects. Family members can work together to financially support, pray for, and correspond with a missionary, a needy family, or an overseas orphan. Becoming aware of needs elsewhere reminds our children of the incredible abundance in America and our opportunity to share it with the needy.
If you’re planning a major family vacation, why not visit a mission field? Combine the fun with the education and encouragement to church missionary families (provided it isn’t an inconvenience to them). When Karina and Angela were eight and six, Nanci and I took them for two months visiting five of our church’s missionary families in England, Austria, Greece, Egypt, and Kenya—all for less money than many Americans spend on a car. None of us will ever outlive the impact of the trip itself or the planning, working, praying, and saving for it. We first had the thrill of seeing God provide and then seeing his exciting work in those fascinating countries. We took the girls out of school for those two months, but they learned far more in the traveling than they would have in the classroom. This trip shaped them not only for life but for eternity.
Teaching Our Children Self-Control
Few things we can teach our children are more valuable than the discipline of saying no. We must model delayed gratification and teach the discipline of avoiding expenditures when the money could accomplish a higher purpose by being given away, saved, or used more wisely. Self-control is one of the highest Christian virtues (Galatians 5:22-23; Titus 2:1-12).
A preacher told this story: “One day I asked the Lord, ‘What’s a million years to you?’ God said, ‘It’s only a second in time to me, Son.’ So then I asked, ‘What’s a million dollars to you?’ God said, ‘It’s only a penny to me, Son.’ So then I said, ‘Okay, Lord, how ’bout you just give me a million dollars?’ ‘Sure, Son,’ God replied. ‘But you’ll have to wait just a second.’”194
Sometimes we have to wait longer than we want—but that’s what builds our character and self-control. Children need help to develop sales resistance. They are by nature impulsive spenders. Self-discipline doesn’t come naturally. Every time we say no to our children about ice cream, candy, or a new toy, we can teach them something important:
• In order for things to be special, they must be the exception, not the rule.
• There are higher values than immediate gratification.
• There are better ways to use God’s money than to follow our impulses.
Children raised this way will usually follow the same pattern of decision making when they’re on their own. Self-control learned by children in one area carries over into others. Children who learn to say no to unnecessary purchases are much more likely to say no to immorality, alcohol, drugs, or shoplifting.
Children whose parents won’t give them everything they want are invariably more content than their spoiled counterparts. They ask for things less often and when they do ask they’re far more selective. When their parents say no, they can accept a no because they’re aware that no amount of begging or badgering will get them their way. (It will only result in discipline.) Children who are used to getting whatever they want continually spend their time sharpening their skills for manipulating their parents.
Obviously, parents should sometimes say yes to their children’s requests. In the context of good stewardship, giving to our children can teach the lesson of generosity, not indulgence. Tightfisted stinginess is as negative a model as indulgence. Balance is the key. Our goal isn’t to be penny-pinchers obsessed with money and fretting over every expenditure but joyful, responsible, and generous stewards of God’s abundance. The point of being careful with God’s money is to free up more resources to be used for kingdom purposes. A wonderful side effect is that it also builds more Christlike character.
Spending
Children can learn to shop intelligently, looking around and not buying the first thing they see. We can teach them how to compare values and discover the best places to buy. To avoid impulsive spending, our family has a rule of not making major purchases unless we’ve considered it for at least several months. If we still want something four months later, it’s no longer an impulsive expenditure.
I suggest less shopping for entertainment. Aimless wandering through malls and shopping centers produces unnecessary spending. It can breed discontent to look at all the latest models of things we don’t need and can’t afford anyway. I recommend a family “field trip” to a shopping center for a specific purpose—but not to buy something. Look at all the different things, then ask yourself and your children if they’re really worth the cost in light of what else could be done with the money, especially to help others and invest in God’s kingdom.
I walked through a shopping center one day, identifying the products in the stores that could be described as things I needed as opposed to things I might want. The result was more amazing than I anticipated. Other than a few items of food and the most basic clothing, the other 99.9 percent of the items were nonnecessities. When I took our girls on the same sort of tour, their job was to identify “need items” as opposed to “want items.” They had a fun time and came home realizing how few needs and how many wants we have.
An effective way to teach children how to properly spend money is to show them how you spend it. By the time children are ten, perhaps even younger, they’re old enough to be let in on the family budget.
One technique is to bring home an entire paycheck in one dollar bills (explain that to the bank teller). Or you could use play money to illustrate the same thing. Put the money in piles to show how much goes to what expenses monthly. This approach allows children to visualize where the family’s money goes. It helps them compare what’s expensive and what isn’t, what’s a priority and what’s not.
Some things will surprise the children, and they’ll ask you questions that are mutually enlightening. You’ll probably reevaluate your budget and make some healthy changes. Comparing the amount you give away to the amount you spend on yourself may be particularly convicting.
Your children may see things from a responsible perspective for the first time. Children who have been told to turn off the lights when they leave a room or to shut the front door behind them suddenly understand when they see the stack of money that goes to pay the electric bill. Children may hear their parents’ words, but until they visualize what they mean, the words don’t really sink in.
Looking at your tax return helps gauge your spiritual perspective. For example, how much you spend on interest compared to how much you give says a lot about what you believe. Do you take a greater deduction for interest on debt than you do for your charitable giving? Show your children your tax return, not just for their instruction but for yours.
As parents, our ultimate purpose isn’t simply to give our children food and shelter for the first twenty years of life. Our purpose is to one day present to the Lord, the church, and the world mature young adults who are good servants, good stewards, and good citizens.
As children grow up, they should gradually be weaned financially from their parents. Especially as they are nearing the end of high school, children should be progressively earning more money and accepting more responsibility for their finances. By the time they’re ten, most children might have their own savings account. By twelve, they might have a part-time summer job. By sixteen, they could have their own checking account. By seventeen, they might be paying for their own transportation, recreation, and some of their clothing. Of course, this will vary a great deal according to family needs, preferences, work opportunities, and a child’s development.
After they complete high school, as long as our children are still in their early twenties, it may be reasonable to provide their food and lodging. But we must discern when this stops being healthy and starts developing bad habits of dependence that will be hard to break when they finally have to function in the real world. We must also realize that what’s good for one child may be bad for another.
The goal is to help our children become increasingly independent of us—which should lead to an increasing dependence on the Lord. Dependence isn’t eliminated, it’s simply transferred. As we entrust our children with more and more financial responsibility, we should find them becoming more and more financially trustworthy. As they prove themselves trustworthy, God will entrust more and more to them, as well.
Let me repeat for emphasis what I said earlier: We parents should not transfer wealth to our grown children unless we’ve first transferred wisdom. Without wisdom, passing on wealth won’t just be wasted—it will damage our children 100 percent of the time.
In chapter 9 we saw that God uses a system of positive reinforcement, both through granting short-term rewards and promising long-term rewards. Although God has built into each of us the need for incentives and motivation by reward, some parents don’t follow his pattern with their children. Dr. James Dobson addresses the subject of rewards in Dare to Discipline:
Adults are reluctant to utilize rewards because they view them as a source of bribery. Our most workable teaching device is ignored because of a philosophical misunderstanding. Our entire society is established on a system of reinforcement, yet we don’t want to apply it where it is needed most: with young children.195
The great success of Awana, Boy Scouts, Girl Scouts, and similar children’s programs is largely due to their emphasis on achievement. This shows up in patches, badges, ranks, and other tangible rewards. Of course, like every good thing, this can be taken to an extreme. But because all children are created to mature through proper motivation, we must gear our training toward motivating them in the most effective ways toward the most healthy ends.
God rewards us for what we do, how we do it, and why we do it (1 Corinthians 4:2, 5). Because having a good attitude sometimes requires considerable work, we periodically rewarded our daughters in small material ways simply for their attitudes. But although attitude is always important, it’s also appropriate to reward children for specific actions and tasks performed.
Of course, not all rewards are material. As God says “well done” to his faithful servants, so a parent’s praise is a child’s greatest reward. Our children’s biggest smiles emerged when we commended them for their actions and attitudes. And when we did give a material reward, we often tied it to a relationship-building experience, such as a breakfast out with Dad or ice cream with the whole family. Our children knew they weren’t earning our love. But they also knew it was possible to gain approval and other rewards through their faithful efforts. Without this training, they’d never know how to responsibly function in their families, vocations, or in their service for Christ, the ultimate Rewarder (Hebrews 11:6).
Most parents can identify with this lament: “We wish Jimmy knew how to share.” Sometimes we’re appalled and embarrassed by our children’s displays of greed and possessiveness. We want them to learn to share—yet too often we don’t provide them a model for sharing.
Most of us will buy a certain tool or kitchen gadget that we’ll use only a few times a year, rather than borrow it from a neighbor. This decision does two things—it results in unnecessary expense and circumvents the development of a relationship with our neighbor that would be naturally cultivated by sharing resources. It also trains our children to think and live independently rather than interdependently.
What do our children learn when they hear us complain about the fact that we loaned someone our car and it was returned dirty or dented? They may have even heard us say, “That’s the last time we’ll ever loan our tent to the youth group.” However, if we view our assets as really belonging to God, we’ll be glad to loan our car or a tent, even though we realize it may come back a little bit worse for wear. But that’s part of sharing. To learn true sharing, children must see us do it. We must not just talk about sharing. We must share.
Hospitality is one of the strongest ways we can teach our children. By opening our homes to others and being gracious hosts and hostesses, we teach our children both to share and enjoy the fruits of sharing. They see firsthand the value of encouraging other people and drawing close to them through the unselfish use of possessions. You might even look back with your children at some of the people to whom you’ve opened your home and wonder if, without knowing it, you’ve entertained an angel in disguise (Hebrews 13:2).
“Sharper than a serpent’s tooth it is to have a thankless child.” Any parent who has one knows exactly what Shakespeare meant. In the midst of the abundance they’ve always known and with the sin nature they’ve always had, our children won’t naturally be thankful. We must teach them thankfulness.
“Praise the Lord, O my soul, and forget not all his benefits” (Psalm 103:2). As parents we can lead the way by counting our blessings in front of the children and openly expressing our thankfulness to God for all he’s done for us. We must be careful not to nullify this by complaining when things don’t go our way. What do our children learn when they hear us say, “What a shame it had to rain today,” or “This stupid car is always breaking down,” or “That’s the second year in a row without a raise”?
We often asked our daughters at night to identify a number of things they were thankful for that God had done for them that very day. At first this may be difficult, but in time it develops a sensitive eye to the ways God cares for us. At the top of this list of things to be thankful for is God himself, our loving Redeemer. Next are the family and friends and church he’s given us.
Children can also give thanks for material things, for more than just toys—for a body that works, a bed to sleep in, a house to live in, for the air, sunshine, rain, the beauty of flowers and trees. They can give thanks for a country in which they’re free to worship and share their faith. Giving thanks for all these things draws their hearts not to the things themselves but to the One who graciously provides them. The focus isn’t on the gifts, but the Giver. Then even when the body hurts, the bed’s hard, and the house is cold and creaky, there remains the constant assurance that God is still there and still faithful.
As children develop thankfulness for their food and other provisions, they can learn to see them not as “easy come, easy go” commodities but as personal provisions of a loving heavenly Father. Otherwise, in this throwaway society of paper plates, paper towels, plastic spoons, and disposables of every kind, it’s hard to develop a proper appreciation for things.
The obstacles to thankfulness are many. Yet they must be overcome in our Christian homes, where we’re to give thanks in all circumstances (1 Thessalonians 5:18). Never apologize for insisting that your children or grandchildren develop an old-fashioned habit of saying please and thank you. Children who aren’t taught these basic courtesies are being failed by the adults in their lives.
Nothing will interfere more with our children’s relationship with God—or even prevent them from having such a relationship—than a life centered on things. Our greatest legacy to our children is to help them develop their inner lives, their spiritual selves, their hearts for God. We must intertwine these lessons with the building of strong character, moral fiber, and rugged biblical values that can endure the beatings of a godless, materialistic society.
Although many parents will leave their children a big inheritance, we can leave them what really matters—a heritage of wisdom and generosity. They can then pass on this legacy to their own children and their children’s children. Godly generations and an eternal impact can result from our simple acts of faithful stewardship—not only of money, but also of the children God entrusts to us.