Teach them to Spend, Save, and Serve.
Parents are trying to figure out how to raise respectful, productive, and healthy young adults. One topic you want to make sure they learn about is money. My first introduction to money was at the age of 33. It was not too late, but if I were taught about money at younger age, I would have made better decisions.
Teaching children about spending and saving money is a great foundation to help them understand money.
My parents did not teach me much about spending and saving, but the best advice my dad taught me was to have more than one source of income. I recall him saying, “You don’t want to be at the mercy of someone else on how you eat and take care of yourself. If one income leaves, you have others to rely on.” Once you teach your children the basics of spending and saving you can build upon it to discuss loans, credit, budgets, and possibly how to pay for college when they become teenagers.
By age 3, your kids can begin to grasp basic money concepts. This is a good time to start showing them to how spend, save and serve. When they reach age 7, many of their habits are already established. It is important to teach children the value of money and how money works. Sharing my spend, save, and serve system will empower your children to make wise decisions when it comes to money. Are you ready for the challenge?
Step 1: Spend
Teaching your kids, the value of money will help them understand that real items they want cost money. One of the best ways to do this is to give kids cash. In the age of digital dollars, kids see parents using a card to pay for items. This method of payment may give kids a false reality about where money comes from. When my nephew was 13, he wanted to go shopping with friends. The other parents gave their children a credit or debit card and enforced a spending limit. I embarrassed my nephew by handing him $60…in cash. I knew that when he got to the checkout line with more than $60 worth of merchandise, he would have to make hard choices and put something back. Cash tells kids that money is endless unlike credit cards money appears almost magically. A famous study from MIT showed that people will spend twice as much money on the same item when they pay with credit cards rather than cash. While plastic may sound like playing money, cash feels all too real, especially if they have worked hard at their chores or yard work to earn it.
Another good tip to show your children the value of money is to have them join you when you create your budget for your family. Showing them the expenses the family has will give them an idea of what expenses they will have when they become adults. Go to my website a Budget Sheet to start this journey with your children.
Step 2: Save
Saving is a daunting task for adults and many of them still have not mastered it. Consider this. Almost three out of ten Americans, or 28%, have no savings set aside to cover emergency expenses according to Bankrate.
Here are some things you can do to get your kids on the saving trend.
- Show them how to earn their own money
- Discuss needs vs wants
- Create a savings goal
- Track savings
- Open a savings account
Step 3: Serve
There will be a time when money will not fix all life’s problems. Teaching children how to help others and give with time and talent will teach them the true value of money. I recall a conversation with my dad when I was ten years old. He shared with me
if you are not able to give money to help someone or something, give your time and talent.” Over the years I helped people learn how to read, helped people create business, and served my church monthly by teaching financial classes. These acts of service have changed peoples’ lives in ways money cannot. For instance, I volunteered at every Monday at the literacy school. I worked with a man that was released from jail after serving 20 years. He was in his mid-fifties and he could not read or count money. Every week I would work with him on reading and learning how to count money. Eventually he learned how to count money and read simple words. He expressed how learning to count money and reading would give him independence and the confidence he needed to conduct business. The list below will give you some ideas of things you can do with your children so they can serve others.
Few ways to teach children how to serve:
- Lead by example
- Make lunch bags for the homeless.
- Write encouraging letters to the elderly and deliver them to the nursing homes.
- Gather your child’s old clothes and toys and give them to another child in need.
- Have them help their younger sibling clean their room.
At the of End of the Day:
Teaching your child to save is a marathon. Take your time, make it fun and participate with your child. If you are a parent, savings should be a regular part of your child’s routine and can lay the groundwork for a bright financial future. These tips are a good place to start.
Be aware, be informed!