Growing up without a dad and a mom who at times worked two jobs to make ends meet, I had no one to teach me how to handle money. It wasn’t until my adult years when I took the course, “Financial Peace University,” that I learned sound money lessons. During the course I cringed whenever Dave said, “And you should never do this…,” because most likely I had already done it.
Raising two daughters, we applied the biblical advice from Proverbs 22: 6, “Train up a child in the way she (he) should go, when she is old she will not depart from it.” Well, our daughters are far from being old, but both have learned to handle money well. So, what are the principles we should be learning at any age, and teaching those coming after us? Here are several I recently came across in an article by Rachel Cruze, “9 Money Lessons You Need to Teach Your Kids”, from Washington Parent magazine (which is free!). Without giving all the details, since you can read them yourself, here are the mountain peaks.
make a plan
First, make a plan because budgeting matters. As a good friend keeps telling me, “If it isn’t written, it doesn’t exist.” Write down what you have/earn, and what you’ll do with it. Help kids do this simply when they are young.
Second, save. The best way to teach this is when your child wants something, a lot. “Okay, let’s save, in order to buy it.” With her money.
debt is dumb
Third, debt is dumb. Don’t borrow from tomorrow to pay for today. Dumb.
beware of marketing
Fourth, beware of marketing. We used to tune out when commercials came on but noticed our kids watched. Over time, we taught them to think about the message they were seeing and hearing. Ask questions. As Rachel, puts it, “No amount of stuff will bring you contentment.” Marketers tempt us to believe otherwise.
shop for bargains
Fifth, shop for bargains. Key discipline here: patience. Waiting for the right time to buy if you do not absolutely, unequivocably, desperately need it now.
Sixth, investing basics. Start with compound interest for your savings account. Like Jimmy Stewart, in the movie, “It’s a Wonderful Life”, put two dollar bills in the vault and watch them multiply (rather slowly, but still…).
Seventh, insurance. As she gets older, how will she protect her health? Her property?
money and mood
Eighth, money and mood. Those who make smart decisions about money have one less area of stress and tend to have healthier relationships.
And, Rachel’s ninth principle, give. Our God is a giving God, and when we give to help others, to help God’s work, to make a difference, we reflect God’s character and demonstrate God’s love, because love gives.
By the way, Rachel’s dad is Dave Ramsey. It sounds like he and his wife did a good job training up their daughter! To – and for – the next generation.