This is a fabulous guest post by A.J. of Principles of Increase! I love that her family is debt-free and have included their children in the process of what it takes to not only be debt-free, but also in how to live a real life on a budget!
We started getting serious about paying off debt about 4 years ago and celebrated total debt freedom at the end of 2013. That’s right- we own our home, vehicles, educations and gadgets outright. It feels amazing!
The wonderful thing about this journey was that we’ve been able to transfer our zeal and many of our new-found financial habits to our children. Our kids are young and were even younger when we started our journey to debt freedom. We didn’t let that stop us from taking time to teach them about what we were going through and how to approach money.
If your kids are like mine, they want stuff and that stuff costs money. Instead of curbing their desire for these things because the money wasn’t there, we decided to encourage them to find a way to work and save their money to get those things. The results have been surprising. My oldest has purchased TWO iPads and got herself a plane ticket to Oklahoma to see a friend. (She got the plane ticket when she was 6!) My 5 year old has purchased her own iPad as well. Plus, they’ve covered countless trips to the mall and other small treats for themselves. I am hoping that these successes will carry over into life in an even more useful ways: college educations, home or car purchases and starting businesses or investing. We especially want them to be wise enough with their money that they can help others and pursue things they are passionate about.
How have they accomplished these things? Partly through osmosis (just being around their Gung-ho parents) and even more through intentional teaching. These are a few areas we paid special attention to when trying to teach our kids about money:
We made allowances for our kids to desire things (within reason) and routinely brainstorm on ideas around how to get these things on their own. There have been times our kids actually fell short of their goal. They couldn’t have what they wanted. Though it was tempting to want to pick up their slack and buy what they wanted for them, it was a lesson they had to learn. We had to show them how a lack of planning and follow through means they don’t get desired results. Yet, there have been many more times that they made their goals and experienced the reward of accomplishment.
When we discuss budget, we purposely let our kids eavesdrop so they can understand how money works. They hear about bills that are due and how we plan to pay for them. We celebrate when we make our savings goals and other important financial milestones. I can see their little brains ticking and learning while observing our money interactions.
Discuss with Them
We listen to the Dave Ramsey podcast in our car -a lot. My oldest learns with stories and antidotes. She likes to hear listeners call in and talk about all the problems they’ve encountered due to poor financial decisions. Both of my kids are inspired by the stories of financial victory. The follow-up conversations are great. With each talk, my daughters get increasing clarity on why they should save money and avoid using debt for any reason.
There are age appropriate things you can do to get them involved in the household finances. We send them to put money in our coin jars and the oldest enters in receipts on our Quicken app. She always marvels on what we spend at the grocery store and things like car maintenance. This realistic picture of what it takes to run life will stick with her forever!
There are many resources that you can lean on to help relay messages to kids about wise financial habits. We are big Bible fans because many of its suggestions helped us manage money better. Ideally, that would be a great place to start. However, there are other resources tailored for young minds that are based on sound money principles found in the Bible and plain old common sense.
This takes work, folks. But you are up to the challenge, because this is important stuff! I hope this article gives you a good place to start being intentional about what you teach your kids in the area of finances. Remember to temper your interactions with grace and patience. It can take time and many experiences to “get” financial prudence, especially as a youngster.
What are you doing to help your kids learn wise money principles at an early age?
Aja “A.J.” McClanahan is a mom, wife and business owner who writes about family, finance, faith and entrepreneurship at www.principlesofincrease.com. She is passionate about helping others get out of debt and find creative ways to experience financial freedom.
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