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So many of the financial principles we all teach our children extend far beyond just finances – they develop character. Teaching financial stewardship in children is a tangible way to teach intangible character traits. For example, when you teach your children that once they spend their money, it’s gone, and there is no more earned, they will learn how to handle disappointment. Additionally, they’ll think about what they really want the most out of their money and how to prepare for future purchases. Of course, this doesn’t happen after one lesson, but through teaching them throughout their youth. These are character-building lessons we should all experience and that can be taught through finances.

Earning – A life of working and earning money is a reality for most everyone just like brushing your teeth and bathing. Yet, many of us didn’t learn about working until we were in our teens, which made it a harder lesson to learn.

What does it teach? Working creates discipline, and discipline builds character. In a recent conversation with a successful doctor, he told me that discipline is the foremost principle we must have in order to be successful. Children must learn to work and earn things they want, while rejecting the belief they are entitled to things because of who they are or where they live.

So, what do we do? Create 2-3 chores for your child. If they are ages 3-6 let it be slightly challenging, and as they get older, let the chore become more challenging for them. In the early years, you want to build consistency for them to learn the relationship between doing and earning. You will also want to pay your child immediately for completing the task if they are under age 6 as they won’t be able to relate what the payment is for if it’s paid at the end of the week. Some may disagree with paying them for doing a chore they should do as part of the family and I do not necessarily disagree, but prior to age 6 they need a way to learn how to earn. While they have chores they are paid for, they should have 1-2 that they aren’t paid for to teach them a sense of family and community.

Giving – We were built to make a difference in the lives of others. Unfortunately, I learned this much later than I wish I had. I’m a firm believer that money creates one of two spirits, evil or good. I am not saying money itself is evil for it is just a tool. However, it can create a spirit in us that can bind us or free us. Giving breaks the bind, because you can’t be owned or controlled by something you give away freely.

What does it teach?  When your kids get in the habit of giving, it not only cures the selfishness or “me” mentality, but they also start to see value in others. When we see value in others, we see them differently and we treat them differently. And how our children treat people will be one of the biggest factors in where they go in life. A recent study found that kids, who served growing up, were less likely to use alcohol and drugs in their teenage years.

So, what do we do? We start by giving a tenth of each dollar they earn and receive. As their age becomes appropriate, find them opportunities to serve. This could be through church, a non-profit that serves in an area meaningful to your family, a nursing home, or a community center. The great thing is that it’s easy to find them opportunities to serve once you look for them.

Saving – This is one of my favorite financial skills to teach my children. It connects so many life skills and can be so rewarding for the child.

What does it teach? Delayed gratification, value, patience, goal setting, perseverance, and achievement.

So, what do we do? I have personally found this hard to do with children under 5, but it can be done. First, help your child think of something they want. This should be the easiest part of the lesson, if you know what I mean. Secondly, take a picture of it or print a picture of it. Then draw a thermometer-style gauge on the picture so that you can visibly measure your child’s progress. As your child earns and receives money, see how much they want to put towards their goal. As they add to their goal, celebrate with them. Make their contribution a big deal as you fill in the gauge that is tracking their savings. It is important that this is visual for them as well as exciting. Once they have saved enough for their purchase, build up the experience the day you are set to go get the prize. They will be so proud of their accomplishment and ready to go again.

Our son, who was 5, wanted one of those watches that can call and text ten people and has a couple of features for his age group. It was $150. We told him that he would have to save if he wanted it and he said he was willing. Truthfully, he didn’t know how big of a goal this would be, and thankfully it didn’t stop him. He worked, earned, and saved for over six months and finally reached his goal. During this time, we talked about expenses around the house and he would say, “how many watches is that?” At 5 years-old, he was learning that value is connected to earning and saving. The joy he had in accomplishing his goal and making his purchase was priceless.