Money basics

QUESTION: Elizabeth asks how early you teach your kids about money and what are some basics to teach at a young age.

ANSWER: Give them lots of grace and mercy when they are little and teach them basic things. At age three or four, have your child clean up a few toys in his room. When he does, congratulate him a lot, wad up a dollar bill, and put it in a clear plastic container that he uses for saving. We want it to take up space so he sees that he’s earning money. When he does that a few times, take him to the toy store and let him buy a toy. He will learn about earning and spending, and he needs to be learning about saving and giving, too.

Start to teach those four lessons at an age-appropriate pace and add more and more responsibility as they get older. When they are old enough to have chores, start paying for chores. Work and get paid. Don’t work and don’t get paid. Some chores you do just because you’re part of the family.

That’s how life works, and we want to teach our kids about life so they don’t come home and live in the basement. Progressively, teach them over and over the lessons they need to learn. From age 15 to 18, get them a checking account and teach them how to reconcile it with the bank and how to manage their finances. When they get to college, they will have learned how to live on what they have. It won’t be a surprise. When they marry, they will be a blessing to their spouse instead of a burden. It’s a part of parenting and a process—not an event.

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