We all want our children to be pure and upright in their walk with Christ and that certainly includes how they manage money. Rob talks about some ways you can help them do that.
We all want our children to be pure and upright in their walk with Christ, and that certainly includes how they manage money. Today on MoneyWise, we’ll discuss several ways you can help them do that!
After sharing the Gospel with your children, one of the most valuable gifts you can give them is teaching them God’s financial principles.
Children need to learn that you work hard for the money that supports the family, that you’re not an ATM machine with unlimited funds. They need to work as well to receive material rewards and the satisfaction that comes with doing a job well.
They need to learn how to budget and spend carefully because there’s never enough money to do or buy everything we want.
They need to learn how to save, not just for rewards, but to cover unexpected expenses.
And most importantly, they need to learn how to give, to be generous to God’s Kingdom.
A recent article from the secular financial website Humble Dollar caught my eye because it lists several strategies for teaching wise money management to children.
SHARE THE BIG PICTURE WITH YOUR KIDS
Share many of your expenses with your kids to help them get an idea of how expensive things are and what it takes to provide. Show them your mortgage and car payments and your weekly grocery costs.
You might also show them your retirement account statement. That can give them a sense of how important it is to save for the future and how much time and effort it takes to build up a nest egg.
MANAGING CREDIT
Managing credit wisely is another extremely valuable lesson for older children. When they head off to college, they’ll be inundated with credit card offers. Far too often, they fall victim to this and run up consumer debt on top of any loans taken out for education.
Teach them about credit before they reach college age. You could make them authorized users on your credit card, but a better way might be to open a secured credit card account for your teen.
PLANNING AND ALLOCATING MONEY
A three-jar system is a time-tested tool. That’s one jar for saving, one for spending, and one for giving.
But you can take that a step further. Have your children put some of their own money in the collection plate each Sunday. The earlier you teach them to be generous to their church, the better!
TAXES
Another valuable lesson for kids is that they’ll have to pay taxes, maybe sooner than later. If your teen has a job, the employer may withhold taxes. That means the child will have to file a return even though they may not have to pay taxes.
You would probably use the 1040EZ form, but filling it out with your child would be an eye-opening experience. Impress on your child the importance of being scrupulously honest about money owed to the government.
Romans 13:6-7 reads, “For because of this you also pay taxes, for the authorities are ministers of God, attending to this very thing. Pay to all what is owed to them: taxes to whom taxes are owed, revenue to whom revenue is owed, respect to whom respect is owed, honor to whom honor is owed.”
SAVING FOR BIG PURCHASES
The last money lesson for your kids involves saving for and buying major purchases. This is a great way to teach budgeting.
Help them set up a saving plan where they are at least providing some portion of the money needed for the purchase. The percentage isn’t important. The main thing is to have the child participate in the purchase with their own money.
The same principle can apply to long term saving. Set up a 529 education savings plan or a Roth IRA for your child and then you can offer to match contributions. This would teach the value of delayed gratification
On this program, Rob also answers listener questions:
How should you manage funds in your 401k as you near retirement age?
Should you continue paying a mortgage in retirement or sell and rent?
What are the costs and benefits of a revocable living trust?
How do you determine if it’s best to refinance your mortgage or pay it off?
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