Greg shares an example of wise parenting regarding teaching children how to manage their money.
Timestamps:
00:00 A child is taught how to manage her money.
01:51 Teaching responsibility, making choices.
03:19 At 17, she is old enough to be independent in her money management because of her early training.
Transcript:
Start Teaching a Child How to Manage Their Money Early
A mother writes: Since my daughter, Connie, was a child, my husband and I have taught her to be wise with her money. Whether she earns it, or it’s a gift, or we give it to her, she divides her money into categories or boxes. A certain percentage for investment, education, giving to charity, entertainment, and so on.
**I find that astonishing. So very few parents teach their children about how to manage their money, and here you’ve been doing it since she was quite young. And you’ve kept it up. It proves that you are wise, AND it proves that the younger we implement correct principles, the more likely it is that our children will retain and use them for the rest of their lives. Congratulations.
Knowing When to Let Them Independently Manage Their Money
Mom: I just had a conversation with Connie about the money she’s making at her job, which is considerably more than she has had to use in the past. Now that she's earning more, she wants to be independent in organizing her money. Up to this point, we have expected her to manage it in the way I described. But now she is seventeen years old, and she asked that she make all the decisions about how to spend or save her funds. She wants to feel more independent, so she can learn, according to her. Would you agree?
**For years now, you have loved her and taught her. One of the things you taught her was to manage her money, and the goal was NOT to do it as you do it, but to teach her what responsibility LOOKS like, so that when the time came for her to be independent, at least she would know the benefits of being sensible. Without that teaching, she would have little choice but to spend money on foolishness, as nearly all of her friends do, according to your past account.
**You’ve reached your goal. She DOES know how to manage money, so of course, let her make her own decisions now. What if she makes some stupid decisions and is unwise, after all your loving and teaching? Tough. That’s how she’ll learn the price of being foolish, just as she has learned the benefits of being fiscally wise. Now she's old enough to implement what you've taught her or to modify it. You only get so many years to teach and sometimes even control, and then they have to be independent.
**Congratulations, you’ve done your job and reached your goal. Nice work. Feels good, doesn’t it? From birth, our goal is to help them be independent, and at least in this area, you’ve done that.
To help teach my kids how to manage money I have alway implemented expenses & tithe…then “free to spend” money.
If i gave them jobs i paid them almost double what i would want to so they could have a satisfactory amount left over after paying rent & board at 30%
I taught them to put their money in an envelope and go to Dad and say “Dad I can’t afford to pay my full way thank you for everything. I’m now earning some money and I would like to contribute here’s 30% of my earnings”
Then to pay tithe…
And we have told them to expect to do this as they get jobs while living at home.
At first they resented it but then they started to become proud of their ability to earn and they were learning to calculate how many jobs they needed to do to earn the money they wanted so they could purchase their item minus expenses…
For me I would continue to enforce this payment as a minimum in preparation for real life ( as i have experienced myself being very selfish with the money “i earned” and still expecting full accommodation and board & expenses to be covered by my parents…and then found moving out to be unmanageable as a young adult)