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It was a difficult season for my husband, David, and me when our kids were starting high school. A failing business and some poor financial decisions created tension in our home, and our teens saw firsthand the strain that financial mismanagement could bring to a family. We knew that change was necessary.
We committed to a biblical financial study and took our teens to classes about wise money management. We discussed the concepts of ownership, stewardship, budgets, debt, saving and giving. The weekly lessons included solid Bible study and required practical budgeting assignments. Our teens even learned the discipline of a cash envelope system, spending only the cash they had budgeted. Not only were we making better spending decisions, but the family was also calmly discussing money issues, and the tension was dissipating.
Some of our most significant family discussions focused on the following:
Ownership and stewardship
Real money management involves faithfully handling the resources that God has entrusted to us. Crown Financial Ministries teaches that when we truly understand God's ownership and our responsibility to manage His possessions, all our spending decisions become spiritual decisions.
As David and I began to live this foundational principle, our financial perspective radically changed. Even our teens recognized the peace and joy that developed when we viewed money from God's perspective. We opened savings and checking accounts for the kids, we discussed the difference between wants and needs, and we taught them the importance of living within their means.
A spending plan (or budget) is often seen as a restraint. In reality, it helped us take control of our cash flow and gave us power over our spending decisions. We helped our teens design their own written monthly spending plans and sat with them at the computer as they logged receipts to track and analyze spending choices. One teen succeeded by using the cash envelope system; the other learned to manage a debit card. Regardless of the system, a written plan helped them both reach their goals.
With the allure of our culture's "buy now, pay later" approach to finances, it's imperative that we talk to our teens about debt. God's Word teaches that debt enslaves (Proverbs 22:7), so we've encouraged living debt free by planning ahead, learning contentment and spending according to their plan. We warned our teens that credit card companies would target them with tempting offers and hidden fees. Does your teen understand the bondage of debt and the freedom of delayed gratification?
Saving and investing
Proverbs 21:5 says, "The plans of the diligent lead to profit as surely as haste leads to poverty." This principle is simple: Spend less than you earn and save the difference, and over time you will prosper.
We encouraged our teens to first save for their "emergency fund." This fund was used when unexpected events happened — a flat tire or a last-minute date to prom. Instead of borrowing or using a credit card, the money was readily available because our teens had been saving.
Next, we helped our teens understand the power of long-term saving by explaining the beauty of compound interest that accumulates over time. A savings plan early in life can help lead to financial freedom in the future.
To help our teens learn the power of investing, my husband played the role of "DadTrade." He served as an investment broker that allowed our teens to buy stock at the market price. No actual stock was purchased, but our teens invested real money and based on the market, either experienced a real loss or gain, which we covered. This process led to conversations about diversification, risk/return ratio, and supply and demand.
During the early teenage years of baby-sitting and minimum wage jobs, we taught our teens that giving should be a priority (Proverbs 3:9); it should be consistent (1 Corinthians 16:2); and it should be done with a cheerful attitude (2 Corinthians 9:7). Although giving started with a basic tithe, the most rewarding times of giving were spent sharing care packages. The practice of giving becomes more real when we come face-to-face with those in need.
Our teens learned through the results of both good and bad decision making in our home. In spite of our mistakes, we endeavored to be open and transparent, recognizing that every step of our financial experience could be a teachable moment for our teens.
Natalie Mead lives in New Mexico with her husband, David, and is the career services manager at UNM's Anderson School of Management.
This article appeared in the January/February 2013 issue of
Thriving Family magazine and was titled "Teaching Teens to be Money Savvy (Even When You're Not)." Copyright © 2012 by Natalie Mead. Used by permission. ThrivingFamily.com.
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