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Training Children How To Handle Finances

01.21.2009 by Matt Jabs //

In these economic times it is not only crucial that we reevaluate the way we handle our finances, but also the way we teach our children how to handle finances!

It should be stated first and foremost that children learn from watching their parents behavior, not from listening to what their parents preach.  I suppose then, the best way to train children on the proper use of finances is to use our own finances properly! You should also be aware of the fact that I do not currently have any children, though Lord willing my wife and I would like to have some soon; so please…take what I say with a grain of inexperienced salt!

My inspiration for writing today’s article came from a recent post by “Nickel” at FiveCentNickel.com on the topic of Paying Children for Good Grades.  Nickel pays his children an allowance which is mostly used to train them on budgeting and how to handle their finances, he does not give the allowance as a reward for completing household chores.  I agree with this philosophy entirely!  Children in a family should not be paid for their contribution to the daily upkeep of the home.  I do believe they can be rewarded for going above and beyond the normal call of duty, but they should not be rewarded for performing everyday tasks.

Allowance needs to be a tool used to train the child on the matter of money management.  Nickel also describes in this post how the allowance system works in his family.  I agree with Nickel’s strategy with one exception.  While he makes no mention of this, I believe children should have taxes taken out of their allowance in order to paint them a more accurate portrait of how money is handled in the real world.  Some may find this legalistic, but I’d rather they be as prepared for reality as possible.

Once I have children, here is how I plan to train them regarding the distribution of their allowance:

  • 10% tithe to the church (% based on the gross amount…taken first, before any taxes or anything else)
  • 15% to taxes – this I plan to put into their college savings fund that my wife & I manage.  It may not seem like a lot will be going into this, but every penny counts!
  • 25% to savings – to go into their savings account
  • 25% to bills – to go back to their parents in order to help pay for the household bills.  I hope to use this philosophy to teach them to conserve spending on household utilities, groceries, etc.  I plan to involve them in my bill paying/grocery shopping process and believe this will give them a “vested interest” in cutting costs.
  • 25% to spending – this portion will be able to be used for whatever they want.  If they want to spend it, they can spend it.  If they want to roll it into their savings, they can do that as well.  If they want to help out with bills, that will also be welcomed!

I plan on giving the children all their money up front, so they can see it and physically handle it.  Then divvy it up accordingly.  I don’t want to simply withhold a certain amount, because I want them to be as involved as possible.

What do you think?  For those of you that currently have children, what are some challenges I’ll face while trying to implement this system?  What system do you have in place?

Categories // Giving, Money Management, Spirituality Tags // allowance, Children, Finances, Taxes, teach, tithe, train

DebtFreeAdventure::Category List

01.11.2009 by Matt Jabs //

I’d like to take this time to address and expound upon my newly formed category list for this website.

The categories I chose for DebtFreeAdventure are based upon the principles used in the book “Your Money Counts – The biblical guide to earning, spending, saving, investing, giving, and getting out of debt.” by Howard Dayton.

This website is in no way infringing upon the copyright of the book mentioned, instead it is a journal of one man’s chronicles to become debt free using the principles from said book.

Here is the category list I will be using along my description of each:

  • Bible – Biblical references regarding the handling of finances, Jesus Christ, or salvation.
  • Budget – Information on budgeting and how it is a must regarding your finances.
  • Children – Training children to understand that all things are from God, that money is only being entrusted to us by Him temporarily, and that we needs be faithful stewards of that money.
  • Counsel – Any form of outside help we can get to aid us in the proper handling of our finances.
  • Debt – How to get out of it as quickly and as biblically as possible.
  • Giving – All things are from God and we cannot properly manage money unless we are giving according to His Word.
  • Honesty – “Ill gotten gain shall not prosper!”
  • Investing – The proper saving and investing of our money according to God’s Word.
  • Spending – How to spend our money wisely.
  • Work – Work hard, as unto the Lord.

Let it be noted that my wife & I do not currently have any children, but of course we need to prepare ourselves to properly train our future children in the way of finances according to God’s Word.

I do not forsee any categories being added or taken away from this list, however I will do as the Lord leads me in this endeavor.  My prayer for this website is that the Lord will lead me in my efforts, will work through me to help my family and my readers, and will bless my efforts abundantly; for without his blessing all is vain.

Categories // Debt, Earn Money, Giving, Investing, Money Management, Spirituality Tags // Children, Counsel, Debt, Giving, Honesty, Investing, jesus christ, Money Management, Spending, Spirituality, Work

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