In this series about kids and money, I am sharing some steps that I am using to train my daughter about personal finances.
It is so incredibly important to play the lead role in educating your children about money! Proverbs 22:6 says it so well – "Train a child in the way he should go, and when he is old he will not turn from it". Remember this – No matter what, you ARE teaching them something. They are watching everything you do.
Step TWO: Walk The Talk
"Do as I say. Not as I do."
I have hated that statement since the first time I heard it. A five year old child can see right through this statement. A mental note is made that "Mom does not even believe what she is telling me. That means that whatever she just said is not very important."
If you are a parent, you KNOW that you have been trapped before by this. I remember that we had told my young daughter (~ 3 years old) that the word "hate" was not a very good word and that it should not be said. The dreadful day arrived (probably 25 minutes later) when I said, "I HATE the stupid Colts! They can't win the big game!"
From Melea (our daughter) comes the statement that just convicts you like nothing else – "DAD! You just said a bad word!"
Oh man! It doesn't get any worse than that! I HATE it when that happens!
When it comes to personal finances, you have got to walk the talk. Model the way. Demonstrate and educate the steps you are taking to win with money.
Here is how Jenn and I are "walking the talk" to teach Melea about money.
- We prepare a written budget every single month. Every. Single. Month. Teachable Moment: You must have a plan before spending any money. (Luke 14:28-30 is a great verse about planning)
- We utilize cash envelopes for the "impulsive" categories such as groceries, dining out, spending money, entertainment, and clothing. Melea clearly understands that money is a limited commodity and when it is gone – it's gone! Teachable Moment: Self-discipline goes a long way toward ensuring success with money.
- We invest money every single month into our 403(b), Roth IRA, and 529 College Savings Plan. We actually show her the 529 College Savings Plan statement every quarter! I remember showing it to Melea when she was four – and she had no idea how to read the number. She would say something like, "Is that more than four dollars?" My answer? "Yes. It is at least FIVE dollars!!!" Teachable Moments: You are so important to me that I am investing in your future (college – which wouldn't even happen for another 14 years at that time!) AND Proverbs 13:11 is true – gather money little by little and it will grow!
- Every time Jenn and I plan our money, we split our money into three large categories – GIVE, SAVE, and SPEND Melea actually has a kit put together by Dave Ramsey that helps teach her this concept. It is called Financial Peace Jr and it includes three envelopes that say "GIVE", "SAVE", and "SPEND" Every time she earns money (No allowances in our house! We promote the "Work = Get Paid; Don't Work = Don't Get Paid" concept!), she splits the money between the three envelopes. We have taught here that 20% should go into GIVE, 20% into SAVE, and that she can spend the rest. Teachable Moment: Life is grand when you are able to GIVE, SAVE, and SPEND!
There is NOTHING better than investing time into your children! The return on investment is so great! By walking what you talk about, you send a crystal clear message that this is extremely important!
Question Of The Day: Are you "walking what you are talking"?