Here are 5 important money principles we NEED to teach our children about how to manage their money and to instill good money habits. As parents, we have so many things to teach our children before they grow up and move out of our homes someday. And that time comes quickly. What’s the saying, We only have 18 summers with our children before they leave for college or begin life on their own? Among the many things we hope to teach them – our faith, our values, our political beliefs, our views on health and fitness, our family traditions and habits – are money habits and money management.
Here is what you can expect from this article:
Questions our teens may have: How do we earn money? how do we manage it? How can money make our lives and experiences larger? What do I need to know about money before I move out on my own? Before our children grow up and leave, there are 5 principles every teen should learn in understanding money.
Alright, let’s dive further into each one and learn how we can best help our teens learn and grow with their wealth.
Step 1: It Ain’t Your Money
Or the principle of Stewardship
The first step is a difficult one to grasp for many of us. And even if you don’t consider yourself to have a similar Christian faith, as I do, believing that God is the creator and Jesus is our king, this is still a principle that I believe will teach us to manage money well. We need to think of money as something which is given to us to watch over.
I think most of us can agree that this world has been given to us to manage and steward and care for. The plants, the animals, the oceans, other people. Christian or not, most of us can agree that it is our duty and responsibility to care for all of these things. Managing money and instilling good money habits begins, I believe, with believing we are merely stewards of any wealth in our possession. That money is given to us, not only to enjoy the things of this world, yet to make things in this world better. That we have a responsibility and an obligation to care for those in need. Those that are hurting. Those that have fallen into hard times.
See my blog post How to Raise Children to be Good Stewards with their Money for a further explanation on this.
God said, Be fruitful and multiply and fill the earth and subdue it and have dominion over the fish of the sea and the birds of the heavens and over every living thing that moves on the earth. – Genesis 1:28
Step 2: A Larger Picture
The second step, again is difficult for not only teens but even us adults as often we make money all about our wants and desires. This second step on managing money is about learning how money has a larger picture. As Christians we believe that the larger picture is mapped out for us in the bible as we come to understand that God has a plan for everything, to care for us, to bless us, to care for our families, to care for others. As believers we understand that money begins and ends with God.
To zoom out just slightly and gain some clarity we know that things are on the horizon. For teens, and depending on your family and those expectations you set out, they may have to purchase a car in the future, perhaps save for college. Perhaps they zoom out a little more and see that they may have to contribute toward their own wedding someday. We all know that for most of us there is home ownership.
Helping our teens develop strong money habits begins with having a larger picture for our lives than just thinking about spending money on clothes or fast food or just putting gas in the gas tank.
…set your hope on God, who richly provides…storing up treasures for the future. 1 Timothy 6:17-19 ESV paraphrased
Step 3: The Experts Say
Step 3 is best thought of as A View from Heaven, or even What others would see if they were to inspect our finances and how we are managing our wealth. In our current culture of, it’s none of your business, this is a hard one. However, I will tell you, if you haven’t learned already, money is an education. Learning good money habits and learning to manage money well is ongoing especially with the different phases in life we experience. And who best to learn from than the experts. Imagine some financial expert or perhaps some money guru looking over your budget. What would they say? How would they advise you to make changes for the better? What might they advise you to increase your wealth, your generosity, your ability to earn more or experience more.
A view from heaven is teaching our children that if we zoomed out to look down and see what God may see from heaven, what would he tell us or advise us about how we are managing our wealth?
Step 4: Have a plan
Step 4 is urging our teens to view money through the lens of necessity and productivity. We need to sit down with our teens, often and consistently, to remind them of the road map for their money. What is coming up next? What bills do they have next month? Cell phone bill? Car insurance? Do they need to buy some new clothes? Do they have a school activity like a football game where they would like some free spend money? What large purchase do they need to save for, for perhaps one or two years? A car? College?
Teach your child good money habits by sitting down and mapping out and having a plan for their wealth. This is a practice that goes straight through into adulthood. And is crucial to learning early on, when our teens are earning far less than they will post-college.
Step 5: Run the race
The last step, step 5, requires energy. We all know the story of Tortoise & the Hare. We all remember the outcome – the Tortoise wins the race. Money is truly a race, a marathon that requires endurance and consistency. What better way to start our kids off in the right direction than in teaching them to understand that money management requires consistency, endurance and that no money decision should be made quickly. Take your time with your money making decisions. Consult your road map, your plan for your wealth from step 4. Think about the experts and what they may advise. Take a view from heaven, zoom out and think about the consequences or outcomes and results of making a large purchase. Consult the experts by reading and absorbing how those who are wealthy and came before us did it and the decisions they made.
Your Next Step
In summary, I challenge you to pass on to your children these 5 foundational money principles to your teens in teaching them to manage their money well. Perhaps you are even finding yourself in a place that these principles would serve you well. Implement them into your own life and model this to your teen. Lead by example as you manage your own money and implement strong money habits that will result in your own improvement of growing your own wealth. Go side by side with your teen and know that this list is not something you just throw at them, yet walk side by side with them over the course of the remaining years they will be under your care and in your home.
Be sure to check out my next blog, This One Gift to Give to Your Child, to help you further teach your teen to navigate learning to manage their money.
The Greatest Gift We Can Give
Among the many things that are so important to teach our teens before they grow up and move out, managing their money, having a plan and a vision for their money is among the top. Teens need to learn and practice good money habits during their time in our care so that when they are off on their own journey, outside of our care and homes, they have a foundation of money management that will guide the way the view money, are good stewards of their money, are generous with their wealth and grow to be responsible with their wealth. As parents, these 5 steps to managing their money can help guide them toward being more responsible.
If You Enjoyed This Article Be Sure to Checkout These:
Principles of Wealth Building – What Are You Teaching Your Children About Money?
This One Gift to Give Your Child – Budgeting 101 for Teens
ABOUT THE AUTHOR
Michael Kopans is here to share ideas for helping 1 million people reach a million dollar net worth by using money principles he’s learned over the years. Let’s talk money, budgets, becoming debt free, financial wisdom, financial principles that work.
money, budget, marriage, biblical wisdom
Success by 1,000 Wins 
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