Teaching kids how to manage money

by Rev Dr Herbert Tan

Adults today struggle with money matters, including staying out of debt, planning and sticking to a budget, credit card abuse and saving for the future. The inability to manage finances well in a marriage has been one of the top reasons why couples go their own separate ways.

Ron Blue, founder of Ronald Blue & Co, a professional firm offering counsel in handling personal finances from a biblical perspective, addresses these issues and offers solutions in Master Your Money and The Debt Squeeze. There is also a HomeBuilders Couples Series* book on Mastering Money in Your Marriage. While addressing the problem is important, preventing the problem is key and that begins with the young and how we nurture a good eye on money in their lives.

In the early years of infancy and early childhood, when children make sense of their world in experiential terms, they need to be taught the value of sharing as this affects their view of money in years to come. They need to move from the "what's mine is mine, what's yours is also mine" mentality to "let's take turns to 'mine' the things". When my daughter Ellie understood that concept, she began to offer to share with others and this helped her learn to be generous for the sake of higher values such as relationships and meeting needs.

One of the HomeBuilders principles of money management is to see money not as an end in itself but as a tool that we can use to meet God's priorities. Ten-year-old Ellie has initiated a number of funds, to raise money for Turkish earthquake victims and the Home School Movement Project.

Even with the money she receives for her academic achievements at the end of each year, she would be thinking of how to bless others. We are already transiting her to a pocket money system as she inches toward adolescence. Soon, like many teenagers, she will be forced to make decisions and manage her funds well in order to be able to give. If the value of giving and sharing is not planted as a priority, her funds will never be sufficient. Increase in personal funds is God's way of increasing our capacity to give (see 2 Cor 9: 6-15).

As Ellie grows up, my wife and I want to teach her the value of money but not to depend on it for her security and significance, as these needs can only be met by God. We allow money to become an incentive to motivate her to perform well academically but the end goal, we tell her, is what she can do with the money she has earned. We are well aware that money could end up becoming the most important thing and push out everything, especially God (see Matt 6: 19-24).

At the end of each year, we sit down and count the money she has made and discuss with her how she wants to spend it. We help her think through her suggestions, assessing whether they would be a wise investment of her finances. There have been times when she has had to wait till year-end to purchase an item she likes very much. We had the money to buy her that item but we taught her to pray and ask God for it or be patient and wait till she had the money. God has worked in her life both ways - where someone gives her the item she wanted or she has had to develop patience by waiting to buy it with her own money. We have seen her learn to trust God for greater things. Her dream of the Home School Movement is a multi-million ringgit project but she has taken her first steps by filling up a little coin box. (HomeBuilders principle: God uses money to help you mature in your faith.)

A couple of years back, we began introducing Ellie to the idea of multiplying her financial resources (see Matthew 25: 14-30). She had by then learnt that there is a monetary value to a lot of things. So my wife helped her start a business venture by teaching her to steam rice cakes to sell to evening joggers who passed by our house. One couple was so amused by Ellie's entrepreneurial spirit that they purchased her cakes. She was beside herself when she made her first 50 sen. Currently, she puts together stamps in packages to sell to her friends. We tell her that financial decisions affect our future and we need to be good stewards of all monies received or made.

Ellie has also started saving for college and holidays, among others. But we are still a far way from teaching her everything on the connection between multiplying resources and savings so that she may learn another HomeBuilders principle: There is no such thing as an independent financial decision. Each decision you make will influence every future financial decision.

We need to build a new generation of young people who know how to manage their finances well and thus generate more resources for the work of God. For more on this issue, read Raising Money-Smart Kids by Ron and Judy Blue.

* HomeBuilders Couples Series consist of small group study materials designed to strengthen marriages and develop supportive relationships with other couples. Selected titles are available from local Christian bookstores or Malaysia Campus Crusade for Christ, or check out www.familylife.com.

Rev Dr Herbert Tan is a FamilyLife Consultant with MCCC. Married with 2 children, he does training for families and leaders who work with youths throughout Malaysia. He is also a Strategic Resource member of South-East Asia Campus Crusade for Christ.