Teaching Kids about Finance

In Marvin J. Ashton's Guide to Family Finance, three of the twelve principles he lists in order to achieve improved personal and family financial management talk specifically about teaching children--teaching children about money, working and contributing. Here are his recommendations.

"Teach children to make money decisions in keeping with their capacities to comprehend."

"Based upon appropriate teaching and individual experience, children should be responsible for the financial decisions affecting their own money and suffer the consequences of unwise spending. “Save your money” is a hollow pronouncement from a parent to a child. “Save your money for a mission, bicycle, doll house, trousseau, or car” makes understandable sense. Family unity comes from saving together for a common, jointly approved purpose. In our home we found it unifying to have a child save for a major project; then, when the amount was achieved, we matched it with a predetermined percentage. Incentives are a powerful force in motivating and achieving desired behavior."

"Teach family members early the importance of working and earning."

"'In the sweat of thy face shalt thou eat bread' (Genesis 3:19) is not outdated counsel. It is basic to personal welfare. One of the greatest favors parents can do for their children is to teach them to work. Much has been said over the years about children and monthly allowances, and opinions and recommendations vary greatly. I’m from the 'old school.' I believe children should earn their money through service and appropriate chores. Some financial rewards to children may also be tied to educational effort and the accomplishment of other worthwhile goals. I think it is unfortunate for a child to grow up in a home where the seed is planted in the child’s mind that there is a family money tree that automatically produces cash once a week or once a month."

"Teach each family member to contribute to the total family welfare."

"As children mature, they should understand the family financial position, budget, and investment goals and their individual responsibility within the family. Encourage inexpensive, fun projects, understandable to the children, that contribute to a family goal or joy. Some families miss a tremendous financial and spiritual experience when they fail to sit together, preferably during family home evening, and each put in his or her share of the monthly amount going to the son or daughter, brother or sister, who is serving in the mission field. When this monthly activity is engaged in, all at once, he or she becomes “our” missionary, with pride becoming a two-way street."

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