The consequences of not teaching children to handle money wisely are tragic. So many young adults today are out of control financially. They are drowning in debt with almost no savings, and they don't understand how important it is to be generous. Parents have the responsibility to train their children. Proverbs 22:6 promises, "Train up a child in the way he should go, and even when he is old he will not depart from it."
The fundamental strategy for training children to handle money is the Little-Big principle. The Bible says, "He who is faithful in a very little thing is faithful also in much" (Luke 16:10).
When children become faithful with small amounts, they are prepared to assume greater responsibility. After they learn to handle quarters wisely, they are ready for a few dollars. Parents should be as systematic in equipping children to handle money as teachers are in teaching them to write. First, children learn the alphabet and then how to spell their name. Each year they learn more complex words and grammar. Eventually, they are able to write essays. Learning to handle words-or money-is a process that happens in stages.
Graduating to greater responsibility
The strategy is to steadily increase responsibility so that your children are independently managing all their finances-with the exception of food and shelter-by their senior year in high school. That way, parents are available to watch and advise as their children make increasingly important financial decisions while still at home.
Unfortunately, most young people are unprepared to handle money when they leave home. One college student admitted how shocked he was to learn that credit card purchases actually had to be paid for later! That surprise paled in comparison to how stunned his parents were when they received his credit card statement with an outstanding balance of $11,350!
By the time your children are in their junior year of high school, they should open a checking account and get a secured credit card. Parents can then show them how to reconcile their checkbook each month, coaching them to use the credit card wisely and pay it off in full and on time every month. Once those habits are in place, they will likely stay in place for a lifetime.