Queen of free: Money lessons to teach our children

By Cherie Lowe

Recently I had the honor of guest speaking to a classroom of special needs students at Center Grove High School. I arrived a little bit early, cracked open my laptop and began to get my slides pulled up.

The kind and patient instructor took one teenager aside to talk to him before I began.

“The is Mrs. Lowe,” he said. “She’s our guest speaker today. Remember, she’s going to talk to us about budgeting.”

“I don’t like her,” he responded. And for extra measure he repeated, “I don’t like her.”

I giggled, assuming the young man preferred his normal routine. The teacher confirmed my suspicions and a teacher’s aide ushered him down the hall to the sensory room.

The rest of class seemed just fine with me so we dove into an hour’s worth of talking about everything from how to make money to how to spend money to how to effectively shop at the grocery store. After an hour well spent, I returned to my car overwhelmed with excitement.

Due to their excellent classroom instruction and maybe a few of my words, these kids have a fighting chance when it comes to making their way in the world. The parents, grandparents, teachers and mentors I meet all want the same thing for the young people placed in their care. They want them to succeed with money.

In many cases, they long for them to avoid the traps they stumbled into themselves and outpace their financial heritage. I know I want the same things for our daughters.

But it can be difficult to know where to begin sharing personal finance wisdom. Do you take a class together? Read a book? How young is too young to begin learning? Doesn’t the school already do that?

While legitimate questions, there’s no definitive path to travel. Every kid is different and whether you feel equipped or not, you have to begin with baby steps toward explaining how the world works. Just like teaching a toddler new words or preschooler colors, it’s best to break down the experience into small, digestible pieces.

1. You can’t always get what you want.

I’ve probably sang the classic Rolling Stone lyrics to my girls more times than they’d care to count. But one of the very first lessons any human needs to learn when it comes to money is that it’s finite. There is not an endless supply.

I’ve heard humorous stories of kids asking their parents to just get more money out of the ATM when they want a new toy that’s not in the budget. Parents in turn then explain if there’s not enough money in the bank, then it doesn’t come out of the machine.

This is mind blowing for most kids who have never stopped to contemplate where that money comes from in the first place.

All of us struggle with saying “no” when it comes purchases. The earlier you begin impressing upon kids the finite nature of money, the better.

2. There’s a difference between a want and a need.

For as long as I live, I’ll remain convinced that shopping with a 2-year old should be deemed a full-contact, Olympic sport. There’s no better workout than wrangling a toddler in a shopping cart while trying to ensure you’ve picked up everything on your list.

Inevitably during each trip, your darling little one catches the site of a bag of aquatic animal shaped crackers or heaven forbid a ball (WHY oh WHY are there balls in the grocery store?!), and you know at this point you’d better race through the store like you’re on Supermarket Sweep because the meltdown train just left the station.

Then those four, simple words leave his or her mouth, “But I NEED it.”

Of course no one probably needs a ball or cheddar fish to survive. If you’re honest several of your last “needs” may have been wants, too.

One of the best ways to teach this lesson is by talking out loud about your own financial choices, delineating the difference between what you need and what you want. You may keep your own budget on track at the same time.

3. Save some of your money.

As a kid, I once lost a Sucrets box full of change in Service Merchandise. I cried in the aisles because I brought every single red-cent I had with me on that shopping trip.

I went from being a change-onaire with jangling coins in my small metal quasi safety deposit box to flat broke within fifteen minutes. If only I had left most of the money at home in my bank instead of dragging it all along — a strategy I’m certain my mother suggested before we left.

Whether your kids receive money from their grandparents or earn it from babysitting or doing chores at home, begin encouraging them to save at least ten percent of everything that comes into their possession.

Together, set long-term and short-term savings goals. You could even print out a photo of the object of their aims and post it near their bank for motivation.

4. Give away some of your money

One of my favorite authors Andy Stanley asks the question, “Do we have money or does money have us?”

There is probably no better way to keep money from owning you than learning the vital virtue of generosity from an early age. If your life always revolves around obtaining and spending money, you’ll never have enough. If you learn to give money away freely on a regular basis, it loses its control over you.

As with saving, 10 percent is a good place to begin when it comes to helping kids learn about giving but any amount is great. Whether your child gives their money to a church or a charity, help them identify a need and then use their money to meet that need when it gives no direct benefit to them.

5. Track what you spend

Healthy money management habits begin early.

If you’ve got an old checkbook register, help your child to begin tracking their spending. Write down how much they have and when they spend their money, subtract that amount from the total. Your child can use a notebook or a spreadsheet, too.

The method doesn’t matter as much as the regular practice of keeping a baby balance sheet of income and outflow. This skillset transfers naturally as children grow into learning how to budget or chart the money that comes into their possession and the necessary expenses and special purchases they make with that money.

Don’t wait for someone else to teach the children in your life about money. Don’t assume they already know what they need to know.

Continually share your wisdom about the traps to avoid and the lessons you’ve learned when it comes to personal finance. Support and encourage your kids to become savvy savers and cheerful givers.

With some prayer and good luck, they just might not depart from those ways when they grow up.

Greenwood resident Cherie Lowe and her husband paid off $127,000 in debt in four years and now live debt-free every day with their two kids. She is the author of “Slaying the Debt Dragon: How One Family Conquered Their Money Monster and Found an Inspired Happily Ever After.” Send questions, column ideas and comments to newstips@dailyjournal.net