Kids and Money
At what age is it appropriate to begin teaching children about money? Do you have any suggestions for how to go about it?
Children have a built-in curiosity that allows them to soak things up like a sponge. It is a wise parent who understands this and goes about building the character of the child in the virtues early on. The Catechism reminds us that “The role of parents in education is of such importance that it is almost impossible to provide an adequate substitute” (No. 2221). In teaching your children about money matters, you will want to emphasize the development of a Christian attitude in addition to showing them the practical skills they will need to properly manage their money when they leave home.
There is probably no greater influence on the attitude of your children than your example. Are you satisfied that your priorities are following the Gospel message? Is God first in your life? Are you fostering the virtues of simplicity, generosity, sacrifice and personal responsibility in your home? Your living example is a more valuable blessing to your children than any material inheritance you may provide. Pope St. Gregory the Great said: “For true doctrine tries both to teach by words and example. … When one practices first and preaches afterward one is really teaching with power.”
One approach you can use to teach your children about money is to pay for completing tasks around the home. I would encourage you to start this no later than when your child reaches the age of reason (7 for most children). This is a simple and effective way to introduce them to the concept of pay for work, and it avoids an “allowance,” where the child is receiving something for nothing. Our 6-year-old daughter (a saver if there ever was one) has proven to be quite industrious at collecting snails to earn money. In fact, when spring comes, she has quite a bonanza.
I would encourage you to set up a system that divides their earnings into three components: 20% should be set aside in equal amounts for their tithe and long-term savings, while the remainder can be spent on a hobby or treat. The child can also elect to put the remainder into short-term savings in order to build up enough cash to make a more substantial purchase like a bicycle.
When it comes to teaching teens about money management, one very effective approach is to allow them to manage the portion of the family budget that directly impacts them. A good category to start with is clothing. Determine the teen's budget for the year, then give him responsibility for managing it. You might be surprised at the lessons learned as a result of this exercise. It won't take your teen long to realize that money doesn't grow on trees! You can add to his area of responsibility as you deem appropriate, always keeping in mind that tithing and saving need to be factored in.
Phil Lenahan is director of finance at Catholic Answers in El Cajon, California.
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