With school well underway across the country, most parents have been shopping, organizing and planning for their children's success. Coaches and trainers are engaged to achieve better performance in sports; tutors hired for Chemistry or math, but some interesting research indicates that when it comes to teaching your children a vital life skill, it may be extremely difficult to make major changes after age 7 … and parents are the primary teachers whether they know it or not.
In a fascinating report, researchers at the University of Cambridge commissioned by the United Kingdom's Money Advice Service discussed how children learn about money through observation and basic math, finding that kids' money habits are basically formed by age 7, at which point most children are in First and Second Grade, many years short of the time we traditionally think of financial training.
The issue is not so much that children of 7 are qualified to become Certified Public Accountants, but that their view of money and the emotions associated with it have already been formed, along with some basic patterns. Interestingly, a study by the American Institute of Certified Public Accountants (AICPA) found that more than 60 percent of parents begin giving their children an allowance by age 8, at which time, according to the study, life-long attitudes are already in place.
It seems the Bible is quite accurate when it says in Proverbs 22:6, "Train up a child in the way that he or she should go and when they are old they will not depart from it."
In part, children are highly influenced by their family's financial habits because of how the very young learn. Research indicates, "that children learn from observation, instruction, and practice." Time with parents, discussions about money, making shopping lists, watching parents buy things or save for them, and experiencing delayed gratification make a lasting impression.
Larry Burkett advocated sharing the details of the family budget and finances with the children at a very young age. It is never too soon to start talking with your children about money, as they will learn as much from your dedication and practices as from any accounting textbook. In fact, financial education alone can often be very ineffective.
Though I've counseled families around the world, teaching them God's principles for their finances, I've had to practice what I preach in my own home as I've raised my boys. Raising financially wise children begins with the heart, specifically with a heart for God. The best way to begin building that solid foundation is a family Bible study where we learn together that we are not owners but stewards of our possessions.
First and foremost, we taught our children that everything we have comes from God himself, and we are to take care of it and share it with others. Understanding that the purpose of money is not just to bring us pleasure helps set the standard of considering how money needs to be used, rather than assuming a payday means a splurge.
From our children's earliest days, we taught them that whenever they received money, they must divide up their resources into categories: to Give, to Save and to Spend. My wife set up three-ring binders for the boys, each with three see-through pencil pouches where the money could be divided and the kids would have the satisfaction of watching it grow. This was the early foundation for their future living on a budget.
We cultivated generosity by teaching the boys that giving is a blessing, and then we let them decide whom they wanted to help with their money.
When it came to spending, we taught the boys to make a list of things they wanted so they could look forward to a deliberate purchase, rather than an emotional shopping spree that would ultimately prove disappointing.
And unfortunately, talking about money with our children needs to include our failures as well as successes. For too many parents, money management is a topic to be avoided, perhaps in part from pride or embarrassment, as we prefer to hide our mistakes from our children
In a 2012 survey, AICPA also found that "parents are more likely to have talked with their children about the importance of good manners, 95%, the benefit of good eating habits, 87%, the importance of getting good grades, 87%, the dangers of drugs and alcohol, 84%, and the risks of smoking, 82%, than about the value of money and managing it wisely, 81%. Children, on average, are 10 years old when mom or dad — more often mom — has the first financial conversation with them about money, according to the survey."
God says a lot about money in the Bible. In fact, there are more than 2,300 verses about money — two times more than verses about Heaven and Hell combined. God understands the financial pressures we experience and the impact on all areas of our lives. He knows we need guidance in everyday living.
We need to share God's wisdom about money with our children, so they have the skills they need to not just survive, but to thrive in this economy. Start as young as you can, but it's never too late to build on the solid rock of Biblical wisdom, because God's principles change everything.