“Train a child in the way he should go, and when he is old he will not turn from it.” (Proverbs 22:6, NIV84)
In our Life Institute seminars that we conduct in churches all across the United States, we meet with adults that were raised in an environment where money principles and proper understanding (or even Biblical understanding) of money was not taught. Because of their lack of knowledge and understanding of money, finances, and stewardship, many adults have made some significant financial mistakes. Hopefully, we have all learned from those mistakes and are moving towards wise stewardship.
But if you are married with kids, how are you going to break the pattern that you grew up with? How are your children going to learn about money/finances and stewardship? How do we teach the next generation to become wise in their financial stewardship? How do we create an environment for our children to learn about money in a safe place where they can make mistakes, but not fatal errors.
We will be looking at two key practical ways how to teach stewardship and wise financial stewardship to your children.
You may be thinking… “Well, this is good to do, but personally I am not good with money AND/OR I am a financial wreck!” We hear you, and we have met many people like you! We do not want you to be a hypocrite, where you teach one thing and do another, and that is why we are offering to you a free Personal Stewardship Review, which will help you come to know and understand Biblical Stewardship, work toward applying it to your everyday life, and also pass on your new-found knowledge and skills to your children.
HOW TO TEACH BIBLICAL FINANCIAL STEWARDSHIP
Using Hands-on Teaching Methods. When children are actively involved in learning, they are able to develop a deeper understanding of stewardship and how it applies in their world. The use of hands-on methods will help lay the critical foundation for them to make God-honoring financial choices both today and in the future.
These creative hands-on methods are designed to help you teach Biblical Stewardship to the next generation.
The Four Quarter Method –
- What is it? (this is for Younger Children): A weekly allowance used to teach children stewardship by actually managing money.
- Allowance is a share of household income, not payment for chores.
- We recommend that you do not take away the allowance as a form of discipline for unfinished chores or misbehavior, since this would take away a valuable learning opportunity. Continue giving allowance so that they are still able to learn the principles of proper money management and stewardship. Use other means of discipline for unfinished chores.
- This method teaches children that there is an order and sequence in how they should manage their money.
- How does it work? Starting at age 5 or 6 (or whatever age you see works best for your kids), give 4 quarters to each child once per week…preference would be on either a Friday night, Saturday or Sunday morning right before church.
- Quarter 1 – Giving to the church should be the first priority. We are teaching principles, not percentages.
- Quarter 2 – Short Term Saving for upcoming expenses or opportunities within 1 or 2 years. (Gifts, trips, events, etc.)
- Quarter 3 – Long Term Saving for larger costs in the future beyond 2 years. (Education/college, car, etc.)
- Quarter 4 – Discretionary is “fun” money that can be spent, saved, or given away as the child chooses.
- Principles and Guidelines for teaching stewardship through the 4-Quarter method
- Use different piggy banks or jars for each of the quarters. Keep the funds separated, especially short term and long term.
- Train your children to live within their means – no borrowing or advances from siblings or parents.
- Always keep reserves in short term savings. Never spend it all.
- Establish accountability. Occasionally review progress to provide encouragement and/or redirection.
- Increase the quarters each year until age 9 and then use dollars and quarters.
- Savings Incentive – Consider matching once a year!
- Match the amount in Long Term Savings if they have saved the minimum required amount each week throughout the year. The more they save, the more you match.
- An ideal time to match would be after Christmas.
Now for the older kids, giving them quarters is not exciting to them, right? So, how can you teach Biblical Stewardship to those that are a little older? Here is a good method that will really help the older child grab a hold of money and usage of it.
Envelope System (Older Children) –
A method of money management that encourages older children to have a spending plan (or a budget).
- Principles and Guidelines for teaching stewardship through the envelope system
- It’s best to switch to the envelope system once the child reaches middle school.
- The envelope system provides monthly income to teach children the discipline of planning ahead and living on a budget.
- Allow mistakes! They can be a great way to learn. It’s better for mistakes to happen in the safety of your home than in the harsh realities of the world.
- As the child makes money, whether through a paycheck or allowance, they will put a predetermined amount or percentage of the money in the envelopes that are designated for different expenses. (Examples: tithe, trips, clothing, lunch money, car insurance, etc.)
- Parents/grandparents are encouraged to consider matching long term savings either bi-annually or annually.
- If you don’t inspect it, you cannot expect it. Parental oversight is encouraged to help the child stay accountable and to help them grow in building a spending plan (budget) that works for them.
How else can I help my child gain Financial Responsibility?
There is no ‘one way’ to transition financial responsibility to your children because all children are unique! But here are a few ideas:
- Love them equally, but educate them differently!
- Talk to them about debt, loans and the pitfalls of borrowing money.
- In their early teen years, watch the movie “Borrowed Future” by the Ramsey Group, and discuss it afterwards with your child/children.
- Start money conversations early (not the LOVE of money, but the TOOL and RESPONSIBILITY of money and stewardship)
- Encourage your children to earn money through work
- Involve your children in the discussion about a major family purchases
- Explain early in life NEEDS vs. WANTS!
The Challenges of Living it Out.
- What does accountability look like?
- Inspections on savings is a very good idea, and as stated earlier, rewarding savers will go very far for your child
- How do we handle rebellious kids?
- How do we handle oblivious/clueless kids?
- Slow and steady education. Tailor it to their pace, not yours!
- Let them make mistakes. But when do mistakes go too far?
- Hopefully mistakes will be minimal while they are in the home.
- Open communication about finances is a key. Foster a relationship where your child seeks you out when they need to make a “more difficult” or complicated financial decision!
- Allow them to make a major financial mistake, for it is best for them to learn in your home, and not in the real world where forgiveness and grace are lacking with finances.
- 1 Corinthians 4:2
- Moreover, it is required of stewards that they be found trustworthy (faithful).
- This should be the goal in financial education and training of our kids!
- Be patient. Love your kids through this long process!
- Remind them that God owns it all!
- Help them to learn stewardship, not ownership!
- Take advantage of our free personal stewardship reviews so you can take your next steps to being a better steward.
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