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Teaching Kids About Money, Part 1

Posted by on in Character Training
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Families have different views on how they spend their money. This post is not written to tell you how to spend your money. These are just ideas for you to think about, tweak, and make fit your own family.

One foundational issue with money and how to use it is about gratification. Should we quest after instant gratification or delayed gratification? As parents, we want to help our children think through this as they mature. There is a spectrum:

Spend Thrift ---- to ---- Skin Flint

(always instant gratification ---- to ---- always delayed gratification)

Generosity is somewhere between those two. And money is just one of many areas that we can teach the concept of gratification (food, sex, rest, etc.).

Each family has their own goals and principles to teach their kids about money. For instance, in our family, we want to teach a general stance of delaying our own gratification for the sake of being generous to others. So, the first bit of any paycheck goes toward helping others: charity, tithe, etc. Then we take care of necessities. We see what we have to save for use later and to spend now.

When teaching the kids gratification and generosity, it is important to help them find a way for their money to go toward something important to them. Otherwise the concept may be too abstract for them to really get.

When discussing appropriate spending, ask the kids questions that lead them in contemplating how money and the future relate:

  • Will this item provide lasting joy?
  • Will it stay around for long?
  • Does it have short-term value or long-term value?

For example, as a young woman Kirby had a neighbor who bought shoes to match every outfit she owned. She enjoyed immediate gratification with shoes, all the time. All the while, Kirby put up with having out-of-date (and sometimes embarrassing) shoes in order to save her money to spend on a trip to Europe. Kirby did experience regret with out-of-date shoes, though it did not compare to the lasting joy she experienced (and later passed on to her kids) when traveling around Europe. Nice shoes would have been fun for a season. But the experiences in Europe were of far more long-term value to Kirby.

Children can learn delay of gratification through small practice here and there.

  • Offer them a choice: one raisin now, or, if they wait, when the timer goes off they can get five.

Such a practice gives them the lesson that waiting is often of greater benefit. It also helps them learn to stretch their patience. As they mature, they will see this principle in bigger and very practical ways, for example, when they have to decide between finishing homework (leading to good grades) before running off to play.

There are lots of ways we can do things to help children understand buying, selling, bartering, helping another person, and delayed gratification. 


Read Teaching Kids About Money, Part 2 for specific examples.