Q&A – Four Steps to Teaching Financial Principles to Boys

Question: My son is fourteen and he has absolutely no concept of money or how to use it wisely. He thinks it grows on trees. Do you have any suggestions for how I can get him ready to deal with the real world when he is older?

Answer: In keeping with our discussion of work, let me add that giving a child a job to do is the most effective way to teach him the meaning of money. When I was a teenager, I learned more about the value of a few bucks from digging a fifty-foot trench at $1.50 per hour than I ever did from my parents' lecturing. The $10 I earned took on great meaning for me. Digging that ditch put eight blisters on my hands and a bad sunburn on my face, but it was a very valuable lesson. I never forgot it.

Beyond learning to work, I suggest you teach your son a few simple principles of money management. There are some good books written on that subject, such as Money Matters for Parents and Their Kids by Ron Blue and Surviving the Money Jungle by Larry Burkett. Here are a few useful ideas that will give you a place to start.

1. God owns it all. Some people have the notion that the Lord isentitled to 10 percent of our income, which is called a "tithe," and that the other 90 percent belongs to us. Not true. I believe strongly in the concept of tithing, but not because God's portion is limited to a tenth. We are but stewards of all that He hasentrusted to us. He is our possessor—and sometimes our dispossessor. Everything we have is but a loan from Him. When God took away his wealth, Job had the correct attitude, saying, "Naked I came from my mother's womb, and naked I will depart. The Lord gave and the Lord has taken away; may the name of the Lord be praised" (Job 1:21).

If you understand this basic concept, it becomes clear that every spending decision is a spiritual decision. Waste, for example, is not a squandering of other resources; it is a poor use of His resources.

Expenditures for worthwhile purposes, such as vacations, ice cream, bicycles, blue jeans, magazines, tennis rackets, cars, and hamburgers, are also purchased with His money. That's why in my family, we bow to thank the Lord before eating each meal. Everything, including our food, is a gift from His hand.

2. There is always a trade-off between time and effort and money and reward. You've heard the phrases "There's no such thing as a free lunch" and "You can't get something for nothing." These are very important things to understand. Money should always be thought of as linked to work and thesweat of our brow.

Here's how this second principle has meaning for us. Think for a moment of the most worthless, unnecessary purchase you have made in recent years. Perhaps it was an electric shaver that now sits in the garage, or an article of clothing that will never beworn. It is important to realize that this item was not purchased with your money; it was bought withyour time, which you traded for money. In effect, you swapped a certain portion of your allotted days on earth for that piece of junk that now clutters your home.

When you understand that everything you buy is purchased with a portion of your life, it should make you more careful with the use of money.

3. There is no such thing as an independent financial decision. There will never be enough money for everything you'd like tobuy or do. Even billionaires have some limitations on their purchasing power. Therefore, every expenditure has implications for other things you need or want. It's all linked together. What this means is that those who can't resist blowing their money for junk are limiting themselves in areas of greater need or interest.

And by the way, husbands and wives often fight over the use of their money. Why? Because their value systems differ, and they often disagree on what is wasteful. My mother and father were typical in this regard. If Dad spent five dollars for shotgun shells or for tennis balls, he justified the expenditure because it brought him pleasure. But if Mom bought a five-dollar potato peeler that wouldn't work, he considered that wasteful. Never mind the fact that she enjoyed shopping as much as he did hunting or playing tennis. Their perspectives were simply unique.

Again, this third principle involves a recognition that extravagance at one point will eventually lead to frustration atanother point. Good business managers are able to keep thebig picture in mind as they make their financial decisions.

4. Delayed gratification is the key to financial maturity. Since wehave limited resources and unlimited choices, the only wayto get ahead financially is to deny ourselves some of the things we want. If we don't have the discipline to do that, we will always be in debt. Remember, too, that unless you spend lessthan you earn, no amount of income will be enough. That's why some people receive salary increases and soon findthemselves even deeper in debt.

Let me repeat that important concept: No amount of income will be sufficient if spending is not brought under control.

Well, maybe these four principles will help your children build a foundation of financial stability without compromising their belief system. In short, the secret to successful living is to spend your life on something that will outlast it, or, as the writer of Hebrews said, "Keep your lives free from the love of money and be content with what you have" (Hebrews 13:5).

I think it is good to give your son a feel for what it takes to create and live on a budget. I knew a doctor with four daughters who gave each of his four kids an annual clothing allowance, starting at the age of twelve. They had to parcel out their money carefully throughout the year for everything they needed. The youngest girl was a little impulsive, and she celebrated her twelfth birthday by spending her yearly allowance on an expensive coat. By the following spring, she was down to shredded stockings and frayed dresses. It was very difficult for her parents to watch her go without. But they had the courage to stand back and let her learn a valuable lesson about money management. I remember a single mother who invited her fifteen-year-old son to help figure the family's income taxes. When the boy saw the hidden costs of running a household, things like paying mortgage interest and insurance premiums, he was shocked.

What your son must understand is that money is linked to work and that everything you buy with it is a trade-off. If you blow it for one thing, you won't have it for something that might be more important. Said another way, you must teach your son that there's no such thing in life as having it all. There is also no such thing as a free lunch—unless you provide it for him.

I wouldn't worry too much about your son not understanding these concepts at fourteen. I know very few youngsters that age who "get it." But it is time to begin the instructional process.

Book: Bringing Up Boys

By Dr. James Dobson

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