Money Matters: Teaching Kids to Manage their Money
Okay, let me just be honest about it. At 40 and at the rate we’re going with our income, the figures on how much we can leave our children through insurance policies that we’ve been presented by financial advisers didn’t seem very much. Just enough for them to start on.
But that’s okay, that’s still good. One of the lessons in the Bible that I’ve kept in my heart for a long time is the one about the prophet Elijah and the woman with the jar of oil (2 Kings 4: 1-7). Believe you me, this story had never failed to keep me and Jay calm and focused when it comes to our finances.
The significance of that jar of oil
The gist of the story is that the man of the house where Elijah was staying died and his wife had nothing for her and her son to live by. Elijah then asked her “Tell me, what do you have in your house?”
The woman answered that a jar of oil was all she had. Elijah told her to get jars from the neighbours and fill them up with the oil she has and sell them. She did and she was able to earn more than enough to continue her business and provide for herself and her son.
Us and our jars of oil
It’s so easy to get discouraged when it comes to money matters. We can get distracted with what we don’t have when we can’t pay our bills, can’t treat our kids to Jollibee, can’t get our car fixed, or don’t even know where we’re going to get food for our next meal.
We’ve been there and it was not pretty. It felt like we had nothing and have no options left. Those were our “desperate times.”
But it was this story in the Bible that reminded us to look at what we had. We were both musicians, yes, but we had other things that we could do aside from playing in bars and doing nightly gigs.
Jay had the opportunity to use his teaching skills profitably, while for me, my writing is my jar of oil.
Do you understand what I’m getting at? The point being is that God will never leave you with nothing to work with, but you have to take your eyes off what you don’t have to see what you do have.
My kids and the case of the insurance policies
I still believe that investing on insurance policies is the best step for us, but yeah, like I said, if we base it only on what we can do for now, they won’t be enough to secure our children financially for the rest of their lives.
So what do we have?
I know I’ve mentioned how young our kids are in my last two blogs, but I don’t see it as a liability. In fact, it works well with our situation.
My children are young, yes, which means that we are given enough time to educate them on managing their finances wisely. Time is our jar of oil in this situation!
Yes, perhaps we may only be able to leave them with little, but if we educate them on the right views about money, we are giving them a bigger chance to live better financial lives when we’re gone because they will know what to do with what they are given.
Reality check, no matter how big the inheritance you leave them, it’s just money. And money runs out if you don’t know how to handle it well.
Teaching them young
Jay and I did not only start late on our financial journey, we also learned about managing money late which is why we found ourselves in a financial rut in the first place. We don’t want that for our children. No parent does.
Many of our friends who are financially stable have been taught early in life and they pass on what they have learned to their children. It’s a proven cycle.
For example, a friend of mine, Margot, says that they teach their eldest son how to manage his credit, to pay his bills on time and to only spend for what is needed by giving him a credit card extension and an ATM as soon as he became an adult.
It’s a little bold and maybe unheard of for the likes of us, but see, their goal is to teach him entrepreneurship. Margot, who runs a business with her husband, says that “your good credit standing will be key when you do business in the future.”
Her son is already an adult now. But leading to it, while he was growing up, they were already teaching him how to spend his allowances wisely. He even had to pay for his own cell phone bills with his own money. That way, he learned to use his resources sparingly.
Another friend of mine, Cherie, said that they gave their children allowances for simple things like snacks and small purchases. But when they go shopping, they talk a lot about the “worthiness” of a product – what is cheap, what is worth the price, and all that.
They also taught their children to save a portion of their allowances and encouraged them into investing a portion of their savings. They get to spend some of their earnings and again save the rest of it.
Being responsible with their money is a habit these children learned so early in their lives. It’s a necessary skill; One that we need to establish in our children as well.
This early on, we need to give them a bigger vision; To teach them how to see their opportunities far-sightedly; To help them develop their God-given abilities to do good work.
And most of all, to understand that the money they will receive is not their money, but God’s money entrusted to them, not only to provide for their needs, but to also bless others with it.
At 40, we may not have a lot to invest, but we can do what we can to provide them with a more financially stable future, and educate them on how to manage their money so they can be better off than we had been.
Among all other investments we’re working on, our children’s financial education will be the most important of them all.