Two recent surveys caught my eye, both pointing to the need and opportunity for parents to teach their kids about money.
First up was a study conducted by Lifeway Research among 18 to 34-year-old Protestant churchgoers. It found that one-third do not believe tithing is “a biblical command that still applies today.”
Next was a study done by Fidelity that found 75% of teens ages 13-17 said investing is important to them but less than 25% have started investing. The study also found that just 52% of teens have talked with their parents about investing.
Training up children in the way they should go
When it comes to living generously, a quote from one of the wealthiest people who ever lived, John Rockefeller, sums up one of the benefits of early training. “I never would have been able to tithe [on] the first million dollars I ever made if I had not tithed [on] my first salary, which was $1.50 per week.”
As soon as kids have any money flowing into their lives, that’s the time to teach the habit of generosity. Set them up with a three-slotted piggy bank or three mason jars or envelopes—one for giving, one for saving, and one for spending. Teach them to devote at least 10% of every dollar they receive to giving.
Be sure to explain why. One of God’s most defining characteristics is generosity. He gave us His Son, He gave us life, He gives us wisdom, and mercy, and grace, and so much more. The Bible says we were made in His image. That means we were designed to live generously. It’s an essential key to a meaningful, purposeful life.
As they get older, help them understand that the Bible teaches us to give first-priority gifts (Proverbs 3:9), it teaches proportionate giving (1 Corinthians 16:2), God started His Old Testament followers at 10% (Leviticus 27:30), Jesus affirmed the practice of tithing (Matthew 23:23), giving orients our hearts toward Jesus (Matthew 6:21), and, while God doesn’t need our financial help to accomplish His purposes (Psalm 50:12), He graciously invites us to be part of his life-changing, eternity-shaping work and in doing so we find joy (Acts 20:35).
Kids have an invaluable asset
As for investing, kids can understand more about money, even complicated topics like mutual funds and compounding, at an earlier age than you might assume. I have a colleague who began teaching his daughter how to invest when she was just six years old. In our household, my wife and I helped our kids open their first investment accounts when they were 9, 11, and 13.
With investing, time is one of the most important ingredients that fuels compounding, and kids have an abundance of time. If you invested $100 per month for 50 years, you would have invested $60,000. If you generated an average annual return of 10% on that money, through the power of compounding, it would grow to be worth more than $1.7 million. But if you did that for 40 years instead of 50, you would end up with about $630,000. That 10-year head start made a $1.1 million difference.
The Bible says, “Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever” (1 Timothy 5:8). Far too many people reach their later years with far too little money to live on. We can help our kids be part of the minority who are well equipped to provide for their families for their entire lives.
Open the classroom
Whether teaching about generosity, investing, or other financial topics, it is so incredibly helpful to start early. Clearly, kids want to know about investing. And kids need to know about generosity. In both cases, if you’re a parent, you’re the best person for the job!
I have more specifics on how to teach kids about generosity, investing, and more in my new book, Trusted: Preparing Your Kids for a Lifetime of God-Honoring Money Management.
If you have taught your kids about investing or generosity, what are some approaches that you have found to be most effective?
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