Teaching our kids about money

Many of us feel ill-equipped to be single parents already. When faced with the responsibility of teaching and guiding our kids, we can feel in over our heads. Some of us never handled money in our relationship so this is new territory for us. Others don’t feel like we have a handle on our finances ourselves so how can we teach and pass down to our kids’ important lessons about money. We know it's important but many of us feel the need for resources on how to do that. Most of us are not experts!

How and where do we start?

Single mom, Elizabeth, works at Ramsey Solutions and shares her insight and experience. First, Elizabeth reminds us that money can be an overwhelming subject that sometimes triggers shame or feelings of inadequacy for anyone but especially single parents. Often, single parents are just keeping their heads above water and when you don’t feel like you have enough to budget, many think why budget at all? However, there are some lessons we can teach our kids regardless of our specific situation.

Smart Money, Smart Kids

One of the lessons parents can take to heart from "Smart Money, Smart Kids" written by Dave Ramsey and Rachel Cruze is that it’s better for kids to learn lessons about money when they are living with their parents rather than learning the hard way later on. Teaching them small but important money principles while they are in our house can help prevent them from making huge mistakes that could haunt them for years when they are out on their own. You don’t have to teach them everything at once! You can spread out age-appropriate lessons as they grow up.

Age-appropriate lessons

For example, at ages 3-5 years old you want to consider what type of chores they can do around the house. Even two or three small things like putting their cereal bowl in the sink in the morning and picking up their dirty clothes each day can teach them responsibility. When they complete these chores, reward them, and teach them early that hard work is something to be proud of.

At ages 6-13, they can do more daily chores and you can reward them with more on a weekly basis. You want to create a “real world mentality” that teaches them that if you work, you get paid and if you don’t work, you don’t get paid.

Once they turn 14, you want to send them out of the house and let them earn money through babysitting, mowing lawns, and finding their first job at a grocery store or local business. They can open a bank account and began depositing their checks and budgeting their money for their own expenses like saving up for a car, contributing to auto insurance, and paying for gas or other special items they want for themselves.

Share, don’t scare

Just like we need to learn about money through intentional steps one building block at a time, the same applies to our kids. As you are learning how to budget and track expenses, invite your kids into that conversation. Rachel Cruze says, “Share, don’t scare”. Sit with your kids and help them understand the concept of budgeting and if we choose to buy one thing, we won’t be able to choose another thing. Help create a healthy reality around money by discussing it openly in age-appropriate ways.

Kids can begin to understand that even when we have “enough” money for essentials and some fun things too, it doesn’t mean we can buy anything. And having extra in the bank doesn’t mean we spend every penny. Teach your kids about the value of saving and having an emergency fund for unexpected expenses. We don’t need to go into detail with our kids but as they are growing up, we can talk to them more and more using real-life examples about how to be responsible with money.

More is caught than taught

Teaching kids about money isn’t about passing on a huge list of complicated principles. Remember, "more is caught than taught". Our kids are watching us and learning from our example. They may not remember everything you say about money, but they do see how you use money. Our kids notice if we stick to our list at the grocery store or buy lots of things on impulses. They see if we prioritize saving and giving and will internalize those lessons too. Teaching intentionally is important but there are things our kids will pick up from us, both good and bad, without us even saying a word.

Teaching older kids

Some single parents have older kids and feel like they have “missed the boat” on teaching their kids how to handle money responsibly. It is okay to acknowledge that honestly and start where you are. We don’t need to be self-critical, but we can accept that we have missed some opportunities to pass on healthy habits around finances. That is okay! Start now. Let them know you regret not teaching them more sooner and then intentionally start from where you are. It’s never too late. Sit down with older teens and help them understand how to track your income and expenses. Help them consider how they are using their money and invite them into conversations where you can share principles about money, debt, saving, and being generous.

Three important priorities to teach our kids about money are 1) security and peace, 2) budgeting, and 3) simplifying our lives. (Check out previous October 2020 podcasts on each of these)

Security and Peace

We can teach our kids about security and peace by having a healthy sense of that ourselves. When we put our trust in God and elevate Him as our provider, it helps us have confidence beyond our financial circumstances. Demonstrating trust in God is a key principle to teach our kind and so are being generous and grateful.

Mary Gordon says, “Teaching our kids emotional literacy and developing the capacity to take the perspective of others are key steps toward collaboration and civility. These are key steps in preventing aggressive and bullying behaviors.” Part of that emotional health is teaching kids to be generous and to be grateful. When we as parents have security and peace in God, we pass on that confidence to our kids. And as they see us operating in generosity and with gratitude instead of living from a place of lack or fear, we teach them valuable lessons about money.

Teaching generosity and gratitude

If you can’t give money, look for other ways to give and serve with your time and energy. Former single mom, Kimberley, shares there is something powerful in giving, even more than in receiving. She has beautiful memories of others giving to her family when she was a single parent. Yet, she shares that even more powerful are memories she and her kids have of times they served and gave of themselves. Being generous is important and so is being grateful. Demonstrating thankfulness to our kids reminds them to appreciate everything they have rather than focusing on what they don’t. So, when it comes to teaching about security and peace, teach them to trust God, to be generous, and to be grateful.

Budgeting

These principles are not an exhaustive list to check off with our kids. They are lessons we can teach as we go about our regular lives. When our kids notice us following a budget, tracking our spending, and handling money responsibly, they gain valuable lessons.

One idea that worked for Kimberley was using a “jar system”, based on “Junior’s Adventures” by Dave Ramsey. She gave each of her kids four jars for tithing, giving, saving, spending. They split any money they received into these jars. Ten percent went into each of the tithing, giving, and saving jars. The remainder went into their spending jar. This simple method allowed them to buy themselves iPads and it’s a treasured memory from their single-family journey.

According to the American Psychological Association, “Delayed gratification in early childhood produces greater academic confidence, higher SAT scores, healthier weight, effective coping with stress and frustration and helps with relationships with peers." Say no to your kids! It creates financial boundaries that they will experience in adulthood. Start that now so once they leave your house, they are equipped to delay gratification and set boundaries themselves.

Simplifying

Rachel Cruze has a new book coming out about how our views of money were shaped by our childhood experiences. Each person brings a unique set of experiences to how they handle finances. Regardless, we all need to learn to give, save, and spend responsibly.

One way we do this is by simplifying our lives. We start by identifying priorities and aligning our financial habits with what is most important to us. We don’t need as much as we think we need. Society tells us we need more and more, and things today are treated as disposable. But an important lesson is teaching our kids to be content and to take care of what they have. As they become teenagers, you can minimize a sense of entitlement by not buying everything for them. Let them get a job and pay for some things themselves. It is healthy for them to have to buy things they want on their own.

As single parents, we know this can seem like a lot but take it a step at a time. Use everyday moments to teach real-life lessons and make talking about money part of your family dynamic. Have grace with yourself and with them. Bring your kids into the process of managing money and they will glean more than you think they will.

As you walk the journey of single parenting, we want to help any way we can. Join our Solo Parent Society community by participating in one of our online groups meeting every week. Follow us on Facebook and Instagram (@soloparentsociety). Subscribe to our weekly podcast via AccessMore or wherever you get your podcasts and download our Solo Parent app FREE in the app store. We love to connect single parents to resources that offer hope and help. If you want to donate so we can reach more single-parent families, go to www.soloparentsociety.com. Questions? Email us at info@spsociety.com.