Knowing what to do with the money you already have is just as important as knowing how to get more. As a kid with limited funds, it can be really confusing to know what to do with your money. Save it for college? Buy your mom a present? Go out with your best friend? Teach your children good money habits using this one, simple principle that will help them know how much to spend, save and share.
Kids and Money: The Law Of Wise Stewardship
Are They Ready for More Responsibility?
The Law of Wise Stewardship dictates that the better we take care of what we have, the more we are likely to get. This cause and effect relationship is easy to see with our things: leave your bike out in the rain, it will rust; leave your toys all over the floor, they get stepped on and broken.
As a parent, you can intentionally apply this principle to determine when your child is ready for more responsibility. Whatever it is they are asking for – a new bike, a higher allowance, a dog – have a conversation together about the principle of wise stewardship. Explain that if your child demonstrates wise stewardship (for example, they take good care of their plant), they will be rewarded with more responsibility (a pet).
Kids and Money: Save. Spend. Share.
Teaching Kids What to Do With Money
This same principle can be taught with money using a simple formula of Save, Spend and Share. Teach your kids how to take care of what they already have by helping them divide their money into three portions: an amount to save, spend and share. Choose a percentage amount that makes sense to your child and designate three separate banks, jars or other containers. Each has a dedicated purpose:
- An amount to SAVE: This can be long-term a goal or a big ticket item.
- An amount to SPEND: This is the money your child might spend on short-term items such as going out to the movies or buying treats.
- An amount to SHARE: The amount they share might go towards community causes such as an animal shelter or church offering. It could also be a gift fund for family and friends.
For example, if your daughter received $100 for her birthday, she might put 50 percent in her save jar, 40 percent in her spend jar and 10 percent in her share jar. You can have some fun here designing a special piggy-bank divided into three sections. Older kids can open a checking account for short term and a savings account for long term. Getting into this habit of Save, Spend, Share now will help your child lay the foundation for success later in life.