How Can I Equip My Kids to Handle Money Better Than I Did?

Ralph00:00:00

I'm going to start with a real basic and strong question today. Do you want your kids to avoid the money mistakes that you've made? Really starts there.You want them to avoid that cycle of financial shame and those mistakes that you've made. See, teaching financial wisdom can start earlier and simpler than you think.So stick with me today and let's build financial confidence from a young age. That's what we're going to cover on today's show.

Podcast Announcer00:00:23

This is Financially Confident Christian, your daily dose of gospel, grounded insight and faith driven tips to help you break the cycle of financial shame with confidence.

Ralph00:00:35

Hey there and welcome back to Financially Confident Christian. I'm Ralph and we're in our series Smart Money for Back to School and beyond.Now if you missed yesterday's show, we talked about managing those extracurricular costs with peace. I, I gave you some real good ways to manage that. If you missed it, go check it out. You can learn all about Ralph and the tuba.Now, today we're going to talk about how to teach your kids about money both practically faithfully and early. And those are really the three main components to this. I want to teach you how to do it. Pract faithfully and early.You want your kids to be wise, don't you? But sometimes you think, I don't know where to start, Ralph. And you have this fear.You think it's going to be an awkward conversation and then you start thinking, hey, what if they make the same mistakes I made and that starts to put this burden on you. Start to think, how do I prepare them? You start to think to yourself, what if I fail to teach them the right things?And I'm going to take a little sidetrack now. I'm going to go on a Ralph Rain. I haven't done one of those for a week or two. But this is Ralph's personal view. This is my personal view.I honestly think we do a very poor job of teaching youth good money skills in this country. I just think we do a bad job of it.We wonder why our kids struggle, wonder why our kids are dealing with these things when they become teenagers and young adults and in their 20s, why they struggle with money. And I truly believe this is something we need to teach in school. And unfortunately, here's another problem. We don't always set a great example.I've heard this said many times, kids are sponges and they live what they learn. So have you set a good example for your kids? You might be sad right now because, listen, I've made the mistakes myself. I'm right there where you are.But I can tell you right now that can end right now, that can end today. And the solution is to start small, start now and start simple. Here's the thing. Teaching financial literacy is part of faithful parenting.I want to say that again because it is so important that you hear that as you're listening right now. Teaching financial literacy is part of faithful parenting. Let's look at the word of God. Let's look at the book of Deuteronomy.Don't quote that one much on the show, but Deuteronomy, chapter 6, verses 6 to 7. And it says this and these words which I command you today shall be in your heart.You shall teach them diligently to your children and shall talk to them when you sit in your house, when you walk, by the way, when you lie down, and when you rise up. I don't think it gets any clearer than that.You shall teach them, diligently, talk to them when you sit in your house and when you walk and when you lie down. Well, let's look at probably the most, the most common verse about this in the Bible and that's in the book of Proverbs, chapter 22, verse 6.And I've used this on the show many times. It says this. Train up a child in the way that he should go, and when he is old, he will not depart from it.Hey, again, it doesn't get much clearer than that. Train up a child in the way he should go. Show them how to become financially alert. Show them how to become financially confident Christians.And one more Bible verse. This is From Proverbs, chapter 1, verse 5. Let the wise listen and add to their learning. Hey, I think I've made my point here.It's all about teaching and it's all about having them start to get these things early. Because here's the truth. Financial stewardship is a spiritual discipline. It just is. There's no disconnect from that.So many people don't understand that financial stewardship is a discipline and it's a deeply spiritual discipline. So start early, teach often and reinforce regularly. So now you're asking, Ralph, what can we do? How do we possibly make this happen? I feel awkward.I'm afraid they're going to make the same mistakes I made. Well, I've got a solution for you.And the solution is actually pretty straightforward and that's create age appropriate hands on money experiences that build lifelong confidence. So here's your one action step for today. I want you to set up what I'M going to call the Earn, Save, Spend and Give jars. Picture this in your mind.You've got four little jars sitting in front of you. And the cool thing about this is you can actually start kids at maybe 3, 4, 5 years old, or maybe you use envelopes, it doesn't really matter.The whole point is this visual reinforcement and it works great for kids of 3 to 10 years old. And I can still remember my mom introducing me to this type thing with small change. And I remember sitting at the kitchen table.I was probably four or five years old. I think I was in kindergarten at the time. And I, I was, I was so enthralled by money.You know, go to the arcade, mom would give me a couple quarters and I remember her setting out these jars in front of me and she had written names on them. And the one name said earn and another name said save. And then one said spend and one said given. I'm thinking, well, I like that spend one.I don't know about that earning and saving one, but I sure like that spend one. And my mom made a game of it.I remember she gave me some pennies and some nickels and some dimes and some quarters and she says, okay, let's start talking about how to do that. I remember stacking up the coins. I remember counting them. Hey, maybe that's why I became an accountant today.So start there, sort of gamify this thing, and then the next thing I'm going to encourage you to do. And a lot of parents mess this up and I was kind of guilty of this when my kids were really young. But I think we need to connect earning to chores.See, so many people think that you just give them an allowance, but I'm going to rock your world right now. I think you give them a commission. Yes, Ralph said commission, not just an allowance. Teach them this very important life skill. Work equals reward.Another Ralph rant, avoid the allowance. See, avoiding the allowance, it means it's like training them to look for handouts. And that might seem a little harsh, but think about it.If you're just saying, oh, here's your allowance, you don't do anything to get it, what do they do? Well, you're teaching them to, to look for handouts. It's so much more effective to connect work with rewards.And I'm not saying that your kids have to do ridiculous chores, but even at a young age, maybe it's picking up their toys, maybe it's straightening up their room. It's doing little odds and ends, like putting all the trash in the trash can as they get older, taking the trash out to the curb.But connect that stuff, connect that stuff with a reward, connect that with a commission. The next thing I'm going to do, and my mom taught this very well with those jars, I'm going to encourage you to practice what I call allocation.So for example, with those jars, maybe say, listen here, kids start teaching tithing at a young age. That give jar, hey, that gets 10% of your money. I remember my kids were really young. We started doing what at the time we called an allowance.But having hindsight, I would have called it a commission. But we said to them, listen, whatever we pay you when we go to church on Sunday, you got to give 10% of that.I remember my young son said, dad, I'm not giving anything. I worked hard for this money. And I said, yeah, but see, here's the thing, son. We had in a whole discussion about it.I remember on the ride to church that day, and he's sitting in the back seat and he's counting his nickels and his dimes and quarters, and I can tell he's being reluctant about it, but I encourage him give that 10% and then also encourage that 20% saving. And hey, they can still spend 70% of it. But start, encourage that allocation and encourage them to make those regular deposits in each category.That's one of the things my mom taught me. With those jars, I was going to put so much in the give jar, I was going to put so much in the save jar jar, so much in the spending jar.And of course I had to earn the money in the first place. That's where it came in the earnings jar. And you start to teach your children tithing and you start teaching them savings.Do that first, because remember what the Bible tells us. Our first fruits will start teaching your kids that as well.And then another thing I'm going to encourage you to do is involve them in spending decisions. That's where making those small purchase jars really come in handy.And for older kids, start to talk about budgeting, hey, as your kids are teenagers, start thinking about a budget.You know, maybe they want to go to the dance or whatever the cool kids are doing now and explain to them, hey, you need to see a receipt and explain to them, you know, cost comparisons. And here's a personal story. I can still remember when I learned a big lesson on spending my own money.I remember one weekend my mom said, hey, I've got this backyard. My dad had left when I was 8 and so I was sort of man of the house. And it was big. It was getting to be fall time.And remember the leaves were all over the ground. And my mom says, you know, we've really got to get these leaves picked up. And I'm like, I really don't want to do leave pickup.You know, I want to go this my friends. I want to go, hey, date myself again. I want to go play my Atari, you know, Space Invaders or something.And she said, no, listen, if you help me, I'll give you a $10 bill for helping me. And I was like, wow, 10 bucks, man, that's a lot of games at the arcade.And I remember she handed me that $10 bill and she says, hey, do you want to go shopping later? I think she set me up. Looking back at it now, I think she set me up. We went to this store.I remember walking down the aisle and I. I saw this toy I really want. Remember, I couldn't tell you what it was at this point. The whole point is not that, but I remember. And I saw the.It was like $8 or 8.99, whatever it was. And I looked on the shelf and I got this $10 bill in my hand.I'm looking at the $10 bill and I'm looking at the shelf, and I'm going to tell you right now, I agonized over that decision. I didn't want to break that $10 bill because it was so much easier to spend my mom's money, spend my parents money.But when I was spending my own, man, that was a critical lesson.And if we can teach our kids that it's harder to spend your own money than it is your parents money, hey, you're going to be helping them out because this gives them practical experience. See, kids need practical experience. They need to understand what scarcity looks like.They need to understand what giving looks like and saving looks like. And it helps build up responsibility, helps build generosity. That's why I said, start there.It's one of the big things we did with our children, and I'm really happy that we did that now. Abel reluctant. I had to have that conversation with them about a cheerful giver. My youngest are like, dad, I'm not feeling very cheerful about this.But start to build those conversations and start building that binding around money, because maybe you've made mistakes. Hey, if you're like me, you're going to make mistakes. But talk to your kids, age appropriately about those mistakes.Say, hey, here's how you can avoid it.Here's what I learned because this really lays a biblical foundation for stewardship down the road when they become young adults and they'll be trained to make better financial decisions. Let's pray together now. Father God, we just thank you for our children, Lord, and the opportunity to shape their future.And we just ask that you would help us to teach them about money with grace, Lord, and with clarity and with patience. Lord, we ask that you would help us to instill in them the values of diligence and the values of generosity and contentment, Lord.And we, we just ask that you would make our homes places of wisdom and, and preparation. And we ask this in Jesus name. Amen. Listen, the truth is your kids can grow into confident, wise financial stewards.So take a step today to teach be simple and be intentional about it. And while I'm talking about intentionality, I want to encourage you to do something. I would love for you to share the show.Share the show with somebody else. And let's all teach our children early and often about financial stewardship.You can share the show by sending them a text or an email or, or maybe share it in your parents group.Just point them to financiallyconfidentchristian.com now, tomorrow we're going to talk about budgeting your time and money for a smooth fall transition. Hey, this is a big time for budgeting money, but it's also a time for budgeting our time. So I'm going to cover that on tomorrow's show.I'm going to encourage you not to miss it. So let's all go out there today and be financially confident Christians. You can do this.I believe in you, believe in yourself, stay financially savvy. God bless you. And you have a great day today.