Teaching Your Teenager How to Handle Money
"Make all you can. Save all you can. Give all you can.” ~ John Wesley
In order to figure out the wisdom God really wants us to remember, a good rule of thumb is to pay attention to how many times that issue is mentioned in Scripture. And when it comes to handling finances, there are 2,350 verses in the Bible on the topic! Discussions about money and possessions comprised close to 15 percent of what Jesus taught. Obviously, the proper handling of money is a big deal.
If dealing with money wisely is important to God, then it should be important to us, as well. When I speak to parents, there are very few things I tell them that they need to do. But teaching kids how to handle money is one of them. In the face of a broken economy, an entitled generation, and fractured marriages as a result of financial troubles, teaching the next generation to make, save and give money is a crucial task we can’t afford to ignore.
So where do we start? And what are the tools we can give our kids to help them handle their financial futures? It starts with one of my favorite quotes from John Wesley: “Make all you can. Save all you can. Give all you can.”
Make All You Can
You can’t teach your teenagers how to handle money simply by giving it to them. Now I know that as parents, we naturally want our kids to have good things. And since a teenager can’t always buy certain things on a part-time job’s wages, we’re ready to step in and open up our wallets. Or maybe our teens are so tightly scheduled with extra-curricular activities, getting a job and earning money is out of the question. So we hand over cash for everything they need, thinking that we are helping their future. But the truth is, we’re not.
Let’s be honest. Most kids will not turn out be soccer stars or world-class ballerinas. But they will always be dealing with money in one way or another. The extra sports and classes on the weekends may be great for teens, but if those activities get in the way of teaching them how to make and handle money, we are doing them a huge disservice. Worse yet, when parents buy everything, teenagers can develop an entitled attitude and a stunted understanding of money.
So start teaching your kids how to make money early. There’s nothing wrong with giving your child an allowance every month. But let that money be tied to work, whether it’s regular chores around the house or small projects outside the home. If you child asks for help funding a birthday gift or a trip with friends, assign extra duties and responsibilities so they can earn it.
When teens get older, decrease their allowance and encourage them to find a job to supplement their income. Let them pay for the car insurance, gas and maybe even clothes. It might be hard to see your child go without once in a while, but on the other hand, you are giving your teen a sense of control and responsibility over their lives. And that is worth far more than anything you can buy for them.
Save All You Can
There is no doubt it is important to teach teens how to make money. But it’s equally important to instruct them on how to save money, as well. And this lesson on financial responsibility only comes by first modeling it yourself.
Someone once said, “I inherited my financial ability from both my parents; my mother’s ability for spending money, and my father’s ability for not making it.” As a parent, you know that kids will watch and pick up on your habits—good or bad. So teach them how to handle money wisely by demonstrating those principles in your home. It might be something as simple as having a coin jar on top of the refrigerator where you collect all your loose change at the end of the day. You can also set up a family vacation fund where family members contribute money each month. As it grows, announce the totals to show how close you are to that trip to Disneyland or the Grand Canyon.
It’s also a good idea to show your teenager how you budget each month. I know some parents who wanted to show their kids how a household budget is conducted, so one month they took their paychecks, cashed them, and dumped all the money onto the kitchen table. Their kids’ eyes got huge as they gazed at that small pile of wealth sitting right in front of them. Then my friends started counting out money toward the different bills for the month. They took out the mortgage payment, the car payment, school tuition, the electric bill, the water bill, the gas bill, insurance, church tithes. The pile of cash on the table got smaller and smaller, and their kids could physically see how the family money was spent each month, and the amount of cash that was left over. What a great illustration for a teen on the value of budgeting! They were able to see where the family money went, and the importance of saving for a rainy day.
Give All You Can
Along with budgeting, show your kids how to give. We can teach our sons and daughters how to make money and save money, but if they don’t learn to be generous, their character will suffer. So start the process by letting them see you write a check and put it in the offering plate at church. Ask their opinion on what charity or organization you are going to give to that month. When teenagers have a hand in making decisions, not only will it teach the value of giving back, but it makes them care about that choice all the more.
If you give regularly, there is no reason your kids can’t do the same. With pre-teens, tell them to set aside a fixed amount of money from their allowance each month to give to a charity of their choice (and it can’t be the “Buy-myself-a-new-iPod” fund). When teens get a job of their own, make it a requirement that they regularly contribute to a charity, whether it’s church, missions, children’s hunger fund, save the rainforests—any charity will do, just as long as they are learning how to be generous.
I don’t think it’s an exaggeration to say that handling money wisely is one of the most important principles we can teach our kids. It’s something they will be dealing with their whole lives. By giving our teens the tools they need to make money, save money, and give money, we are providing them with one of the very best resources for a successful and meaningful life.
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