Ten Commandments of Financial Wisdom #2: Thou Shalt Teach Thy Kids About Money

Do you want your kids to repeat the mistakes that you’ve made with money? Each of us is likely to have made at least one mistake with our finances in the past, but if we fail to warn our kids about the potential pitfalls, there is a risk that we will allow our kids to go through the same (avoidable) problems.

In Proverbs 22: 6 (ESV) it says:

‘Train up a child in the way he should go, and when he is old he will not depart from it.’

As a parent or guardian, you have a responsibility to teach your children how to handle money responsibly. Most of a child’s ideas and knowledge about money will be established in these formative years. If you can get the foundations right at this early stage, you give your child the best possible chance to live a financially responsible life as an adult. A possible benefit of this is the reduced likelihood of them coming back to you as an adult to ask for a financial bailout – though I can’t guarantee this!

The Danger of Not Teaching Kids About Money

In my opinion, if you fail to teach kids about money, it is almost a form of negligence. Even worse, is that if you refuse to teach them about money then guess who will? Mastercard, VISA and American Express will and it’s safe to assume that they do not have your child’s best interest at heart.

I have said before that I know university students who are already in thousands of pounds of debt in the form of credit cards, finance agreements and payday loans. It’s easy to judge and say they shouldn’t have borrowed the money, but when you see how easy it is to obtain credit, I do have sympathy especially when they are not educated on the dangers.

During university I remember going to the bank for some sort of query. Before I knew it, I was in a dimly lit room being encouraged to sign up for a credit card by an ‘adviser’. Despite the pressure of the situation, I kept hearing a small voice in my head saying, ‘Don’t do it.’ And so, I managed to flee this situation. On reflection, I wonder how responsible it is to offer a credit card to a student and how I would be expected to make repayments when my only source of income was a student loan? I digress.

What Can You Do as a Parent to Teach Your Kids About Money?

There are a range of ways to help your kids learn about money. Dave Ramsey has put together 15 Ways to Teach Kids About Money which has a lot of great ideas. These include:

• Teaching them to save
• Establishing a simple budget
• Teach them the danger of credit cards

I believe that this period is also a great time to teach your child about tithing and giving. I really like the illustration of putting ten £1 coins on a table and simply saying that they should remember to give the first coin back to God.

What Can You Do as a Young Person to Learn More About Money?

If you are a young person reading this, you also have a responsibility to start learning about how to handle money properly.  In simple terms, you do not want to be broke when you are older. To make sure that does not happen, please make it a priority to find out how money works for yourself. What are some of the things you can do? If you’re reading this blog, you’re off to a good start. Here are some other ideas:

• Talk to your parents about money
• Get into the habit of saving
• Find resources on financial education (Books, blogs, podcasts etc)

In between playing Destiny 2 on the PS4, I convinced my teenage brother to read Rich Dad, Poor Dad by Robert Kiyosaki. Obviously, he won’t understand everything in the book right now, but his eyes have been opened about how money works and the seed has been planted to encourage his financial literacy to grow.

Practical Resources to Teach Young People Effective Money Management

Ten Talents has collaborated with the charity Open Palm who run a course called ‘WYZ Money’ that aims to teach 13-17-year olds how to be wiser with their money. This eight-week course is completely free and covers topics such as budgeting, savings, investments and much more. You can register at www.openpalm.org.uk/wyz. Further details are below:

Parents I strongly urge you to teach your kids about money early to give them the best possible start in life and so that they can avoid the pitfalls of excessive debt and poor investment choices.

Young person take responsibility for your financial future today. Be curious, ask questions and research. Take the time to gain the financial wisdom that will set you up for life.

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God Bless

Ten Talents