The Cost of Money

In earlier articles, Teaching Money to Children and Youth, Part 1, and Teaching Money to Children and Youth, Part 2 we confronted the difficult task of teaching a lesson that is almost entirely counter-cultural and involves a fight against TV, peer pressure, and all of Satan’s army to help your children learn about the enormous grace of God shown by His generosity to us.

Now we continue with a specific focus on one major issue you will face early in the battle. While kids may understand that money doesn’t grow on trees, many of them don’t know where it really comes from. Learning about work and earning money takes time and effort on your part, but it is a lesson that they must learn.

Some young adults, those who want things like free college, free medical care, and a government guaranteed income, never got that lesson. Instead, basic economics seems to be unknown to them. For college, someone has to pay for the buildings, the maintenance, the professors, and the staff. For medical care, someone has to pay the doctors, the nurses, build the hospitals, run them, etc. And don’t get me started on the amazing idea of a government guaranteed minimum income! Free money doesn’t exist. Someone has to work hard for it!

Parents need to start with one basic fact in teaching their children – money isn’t free! In fact, money is quite expensive; it takes a great deal of work and effort to get money. That is one foundational principle that children must grasp to begin to understand money. The problem is that it is harder than ever to teach that lesson now that many kids never see money. All they see is Mom or Dad pull out a card or a phone, do something quick with it and – done! That wasn’t hard at all.

That is at least part of why Dave Ramsey speaks against credit cards, debit cards and any means of paying other than cold, hard, cash. For the purpose of teaching children, I agree with him. Not having a credit or debit card or the ability to pay by phone isn’t always practical, but there is something very restrictive in a good sense about using real money. In fact, studies show that people paying with cash spend significantly less, up to half as much, compared to credit card or debit card users. The convenience of a card or phone to pay makes buying a lot easier – and easier isn’t always good.

So, start the lessons for your children by living the hard way, pay cash when your children are with you so they can learn by observation. They are watching you – use that to teach them.

Next, communicate with them. Little kids are like sponges, soaking up everything in the world around them. Bigger kids are a lot less like sponges but they are still watching you. Make sure that what they are soaking up is good and educational. The best way to make that happen is for you to talk with them, for you to ask them questions, and especially for you to answer their questions honestly and completely. Make sure that you walk your talk too.

Jesus saw almost every event around Him as a teaching moment. It is time for you to think like Jesus, because every minute with a young child is a teaching moment.

As you make a purchase, explain what you are doing.

Talk about how you pick one product over another, especially if you make decision based upon price and/or quality.

Teach your children that dollars are related to hours. If you make $15 per hour, let your child count how many hours this week’s groceries cost. It’s a combined math and life lesson.

When your child wants a new toy, have him/her count the hours of work that toy will cost you. Actually, that may save you a lot of money because you both may decide it isn’t worth that much work!

Don’t just tell your child you are going to work – add that it is to earn money so the family can have nice things. And be specific; mention a new shirt, blouse, piece of furniture, toy, etc. that your work enabled you to buy.

Make sure that your child understands that work is a good thing (see Called to Work, Part 1 and Part 2), and that you do have to work to support the family. Ask your child if s/he understands why you go to work and listen to his/her explanation.

Let your child help you pay bills. Of course, it will take twice as long to do it that way! So what? That is quality time.

If there is no one behind you in the cashier line, have your child help pay. And pay with cash.

Look for an opportunity to have your child have to make a choice between one of two different purchases because there isn’t enough money to buy both. That requires a judgment call, one of many in a lifetime of subjective decisions that your child will face in life.

My wife learned a valuable lesson when she was a child. Her father managed a grocery store and she would see him pick up items and hand them to her or to others. That was great! But she never noticed him pay for them. So, one day she picked up some gum and took it home. Oops! That was the hard way to learn because she had to take what gum was left back and apologize. But the point was learned and learned well. That shows that children are watching and learning, sometimes even the wrong behavior.

Then, move on to the next level and make your child earn an allowance, or at least earn some money by doing some chores. For age appropriate ideas, see Your Financial Future by the Decade. We will have more on the topic of chores for allowance in Part 8 of this series of articles.

One of those chores is your child’s daytime job, school. Just as you go to work and you have chores at home, your children go to school and have chores at home. Let your child know that is his/her “job.” The quality of work on that “job” is measured by grades. I know many parents who “pay a bonus” for A’s on the report card.

Next, you have another teaching moment as you have the opportunity to teach generosity. As your children are growing up, several things happen that give you opportunities to demonstrate and teach generosity.

  • They are getting older and larger
  • They are wearing out some clothes and growing out of other clothing items
  • They are outgrowing toys and games
  • They are outgrowing books and some school supplies.

As useful clothes, toys, and books are outgrown, make it a family project to thin out the closet space. Makes sure each child gives away something of real value. As they make the choice of what to give away and show reluctance to give their choice item away, share with them a few ideas:

  • Does s/he need that item?
  • How does his/her need compare with whoever will likely end up with the donated clothes toy or game?
  • It is more blessed to give than to receive, Acts 20:35, and definitely more blessed to give than to store in a closet.

Then, complete the act of giving by having them be personally involved in the delivery of the donated items to someone in need. They need to be involved in the actual delivery to really see the blessing of being generous.

Finally, use these moments to teach gratitude. Encourage them to realize how fortunate they are to have so much. And the saying of “please” and “thank you” in a normal setting is a vanishing art. Here, again, what you do at home is far more important than what you try to teach in a class or lesson setting, make sure you say “please” and “thank you” to them, your spouse and to people you interact with in their presence. Your children are watching and listening to you! They are learning from you whether you realize it or not.

And here is another tip. Teaching financial choices to your children is a lot about allowing mistakes. You can help keep the mistakes small enough to not be devastating, but they still have to be large enough to have an emotional and intellectual impact. By the way, be hesitant about “fixing” your child’s bad choices. Let’s not teach that bailouts happen.

Let’s see how all of this works.

It starts with communication, and that starts early – really early. Step one involves involving your children with significant financial decisions you have to make throughout their childhood years. No, they don’t get the final say, but they will learn about both good and bad decisions. They get to see the difficulty of making good subjective choices. They get to see the cost of bad choices. Those will be valuable lessons because they will be involved in the decision-making.

Step two involves your being willing to admit financial mistakes when they happen – and they will. Think of something you have purchased over the past two years that was a mistake; like that treadmill that now has clothes hanging on it, that gym membership you don’t use, the car that keeps breaking down, the pair of shoes that isn’t comfortable, or that shirt that doesn’t fit. Mention it to them and discuss how you handle bad choices, assuming you handle them well!

Step three is the hardest. Have your children help you when you “correct” that mistake. Swallow your pride; mistakes are a part of life. We all make them and they can be the best life lessons for children who are still developing life skills.

It’s a lot! But by the time you have gone through a few of these lessons, several things will have happened. Your children will have been exposed to real life, real money-handling and the real you. May God bless those times and may you use them to grow closer with your children.




About the Author

John Campbell has retired from a 40-year legal practice as a trial attorney in Tampa. He has served in multiple volunteer roles at Idlewild Baptist Church in Lutz, Florida where he met Jesus.  He began serving as the Executive Director of the Idlewild Foundation in 2016.  He has been married to the love of his life, Mona Puckett Campbell, since 1972.