G. Edward Reid

Stewardship Director

North American Division

Summary: We teach children by precept (what we say) and example (what we do). While example is probably the stronger influence, verbal instruction is still important. In this article we learn practical counsel about educating children in financial matters.

In Moses’ final speech to the Israelites he charged them, “And these words which I command you today shall be in your heart; you shall teach them diligently to your children and shall talk of them when you sit in your house, when you walk by the way, and when you lie down, and when you rise up” (Deuteronomy 6:6, 7).

We teach children by precept (what we say) and example (what we do). While example is probably the stronger influence, verbal instruction is still important. In this chapter we will consider the practical counsel that we have received about educating children in financial matters.

Obviously, the goal of Christian parents is to raise their children in such a way that they can enter society as independent adults, a goal best accomplished by proper and consistent home training. The media present much today about the breakdown of society, with its resulting problems of crime, violence, underachievement, welfare abuse, etc. We can blame the church, the school, or the government, but when we are really honest with ourselves, the real problem is with the family unit. In some cases it seems that parents give little thought to bringing children into the world and then, once the children come, don’t spend much time on their training. However, we as Christians recognize that children are a heritage from the Lord, and we take seriously His counsel to us about their upbringing.

“Every child brought into the world is the property of Jesus Christ, and should be educated by precept and example to love and obey God; but by far the largest number of parents have neglected their God-given work, by failing to educate and train their children, from the first dawning of reason, to know and love Christ. By painstaking effort parents are to watch the opening, receptive mind and make everything in the home life secondary to the positive duty enjoined upon them by God to train their children in the nurture and admonition of the Lord” (The Adventist Home, p. 183).

For young people today the picture is not very bright. The economy is the number one problem today—eclipsing crime, drugs, AIDS, and a host of other problems. Children see that statistically 50 percent of their marriages will fail. Most young couples start out life already in debt as they face car payments, student loans, credit cards, and more. And to compound the problem, they have no financial training. As I mentioned before, it is possible to go all the way through school without learning how to balance a checkbook, buy a car, understand insurance, or discover the best ways of purchasing a home. If you have taught your children these things, they will rise up and call you blessed in the future—and so will their spouses!

Learning to handle money should be a part of every child’s education. It is a responsibility that parents should direct themselves and not delegate to teachers, because earning and spending experiences generally take place outside the classroom.


One way many parents start their children in their money management training is by providing them an allowance. I believe an allowance should be a relatively small sum, like $2 a week, but given on a regular and systematic basis. From my perspective, an allowance is not something the children “earn,” but rather a small sum to allow them to learn the value of money before they are old enough to earn their own. Parents give their children an allowance just because they are members of “our family.” With this money children can then learn to tithe and return offerings (giving their own money at church is much more meaningful to children), save for future needs, and spend money for items they wish to purchase.

Paying your children

In our family we have practiced a rather old-fashioned concept of “working together” to accomplish family goals. When their respective tenth birthdays arrived, Kathy took Andrew and Melissa downtown to our local bank, which provided no service charge checking accounts for students, and opened an account for them. Since that time they have balanced their own accounts—with assistance at first—and handled their own money on a regular basis.

How did they acquire money to put in their accounts? We had previously discussed this during our worship and family council times, so the children looked forward to the new experience. First we established rules for paying and nonpaying jobs. Each of us as family members performed certain tasks as part of our basic family responsibility. The tasks involved keeping our own rooms clean and tidy, cleaning up after ourselves in the bathroom, helping to set and clear the table, emptying the trash, feeding the pets, etc. However, at age 10 we began to pay our children for more time-intensive jobs—such as mowing the yard, cleaning the house, washing the cars, keeping our long driveway clean, doing the laundry, cooking for the entire family, and baking bread and preparing granola and special items for Sabbath.

Because during most of this time we were a single-income family, obviously we could not afford a maid or a yard worker. So in exchange we paid the children, and they then took care of their own tuition and purchased most of their own clothing. While these were items that we would have had to pay for anyway, under this arrangement they learned the value and use of money. Our kids had to work at least 20 hours per month just to get enough for their tuition payments. This amounted to about $5.00 per hour, and all went for their elementary school tuition. Then for all that they put in above 20 hours, we paid them $2 an hour. It was from this hourly amount that they made their clothing purchases, started their savings accounts, and obtained their personal spending money.

One important point in the matter of paying children is that once we have agreed to pay them for certain jobs—assuming they perform the work in a satisfactory manner—we were prompt and faithful with the money. Kathy, who is our financial manager, always paid the children for their work right after the tithe and offering checks (which came first, of course) so that we never were short of funds for them. We have followed the practice of making written contracts with our children, signed by them and us, so that there will not be lapses in memory on the part of either party when it comes paytime.

We followed this plan with both of our children from age 10 through graduation from academy. When they entered their academy years they each got summer jobs and worked on the school campus or in town at fast-food establishments. But they always knew that for extra money they could work for us at home.

We have strongly emphasized the value of education for preparation for financial independence. Minimum-wage jobs simply will not support a family budget. Such jobs are primarily to provide work experience for young people entering into the job market and as a supplement to those with other work. Accordingly, our family has always assumed that the children would finish academy and go on to college.

What we owe our children

As I will discuss later in the chapter on estate planning, we have felt, based on our study of the Bible and Ellen White, that we owed our children three things. They are:

1. A Christian home environment. We have attempted to provide a solid religious upbringing. This means regular family worship and church attendance, even participation in church. To us it has also involved practicing Matthew 6:33: “Seek first the kingdom of God and His righteousness, and all these things shall be added to you.”

2. A willingness to work and an appreciation for it. Our children learned that money comes to us as a result of our giving time to others by performing tasks valuable to them. They discovered that diligence and integrity at work are always noticed, appreciated, and rewarded. A young person that has never learned to work or manage money is really poorly equipped to enter the job market and live independently.

3. A good education. Education is expensive today—particularly private school education. But to parents with plans for their children not only for this life but for that to come, it is well worth the cost. Frequently during my seminars people ask me what I think about student loans. My first answer is usually “Whatever happened to hard work?” I believe that student loans should be the last resort. The first option should be hard work. In our case we planned for educational expense first of all through prudent living. This means keeping our wants and desires closer to the need level. Then the kids work to the best of their ability during the summers and part-time during the school year, and we their parents also work as hard as we can to supplement their earnings and keep the school statements paid every month. Our goal for each of the children, in lieu of a lump-sum inheritance later, is to assist them to get started in life by making sure that they have no student loans when they graduate and a reasonably good car for transportation. In short, they will have a marketable skill and no debts.

The children can help by doing well in academy so that they are eligible for good student discounts on auto insurance and can qualify for college scholarships.

All the biblical principles for personal money management apply to children as well as adults-principles like faithfulness in tithing, honesty, diligence, saving for future needs, avoiding debt, etc. In addition, we have had a wealth of good, practical counsel from Ellen White in regard to children and money management education. The following examples are typical.

“Let every youth and every child be taught, not merely to solve imaginary problems, but to keep an accurate account of his own income and outgoes. Let him learn the right use of money by using it. Whether supplied by their parents or by their own earnings, let boys and girls learn to select and purchase their own clothing, their books, and other necessities; and by keeping an account of their expenses they will learn, as they could learn in no other way, the value and the use of money” (Education, pp. 238, 239).

The principles here are simple and basic. Parents should teach children to keep track of their income and expenses, whether their income is from their parents—an allowance—or money that they have earned themselves. Early on they should spend their money for basics—clothing, books, and personal items.

One thing we noted when the children began buying their own clothes was that they did not as often purchase the hottest brand-name items. The clones worked just as well. In addition, when our children shop they always first look through the sale items to see if any with special reduced prices would fit their needs. It almost goes without saying that when children purchase their own clothing they take better care of the garments by hanging them up after wearing and avoiding getting them damaged or soiled.

A question that parents frequently ask is “How old should children be when they begin to learn about money management?” Probably as soon as they are old enough to count. “When very young, children should be educated to read, to write, to understand figures, to keep their own accounts” (Child Guidance, p. 136).

I gather from this statement that right along with the three R’s children must learn to manage their own money. Beyond that, they should know two other principles.

“Teach your children that God has a claim upon all they possess, and that nothing can ever cancel this claim; all they have is theirs only in trust, to prove whether they will be obedient.... Habits of economy, industry, and sobriety are, even in this world, a better portion for you and your children than a rich dowry” (Ibid., p. 134).

“[Children] are not to be carried along and supplied with money as if there were an inexhaustible supply from which they could draw to gratify every supposed need” (The Adventist Home, p. 386).

In addition to learning to keep track of income and expenses through the use of a simple budget and a checking account, children develop the habit of saving a portion of their income. They can learn the benefit of paying cash for purchases and of having interest work for them instead of against them. The burden of debt need never plague children if they learn good money management early.

Your children will not at first earn large amounts of money. It is, however, at that first income time that you must encourage them to be self-disciplined and begin their budgeting process by setting aside their tithe and offerings (as they did with their allowance).

When your children are teenagers, a family or church mission trip to a developing country can be a powerful experience. Direct exposure to abject poverty can curb any complaints about food or living conditions at home and can initiate a lifetime of giving to the poor.

As children grow older and move farther down the road to independence, parents should provide new and more involved financial training. Assistance with the family budget and even role playing can help them learn how expensive it is to maintain a household.

It is not uncommon for young people to want to leave home a little prematurely. Generally they manifest it in the desire to “get an apartment and make it on my own.” Frequently it is a very short-lived adventure when they learn that they are now responsible for the food, utilities, rent, clothing, etc. Quite commonly they return home after discovering that they had to do more than make the payments on the Camaro and the stereo. Obviously, it would be better to learn this lesson without having to experience it firsthand.

Vocational planning

Vocational direction is critical in today’s economy and expensive educational world. All too frequently young people go all the way through college and even graduate and never feel just right about their chosen major field of study. Many college graduates end up working in fields quite different than that for which they originally trained. To avoid such confusion and frustration, parents should assist their children in determining their skills, talents, or gifts, and the type of vocation that would best fit these qualities as well as their children’s personality. In addition to vocational and aptitude testing, young people can also try to get summer jobs in the area of their interests or at least visit the types of work environment that their training would qualify them to pursue.

After God and lifework, a person’s next major decision is a life companion. Since problems with money management, debt, and financial worries are the number one cause for marital difficulties and divorce, it goes without saying that premarital counseling and planning in the area of finance is vital. The chances for a happy and successful lifetime marriage will greatly increase when the partners are well-trained and self-disciplined in money management.

I would encourage every couple to prepare a one-year budget, then establish both short- and long-range financial goals. If couples can learn to work together for their goals, they can avoid the pitfalls into which so many fall.

Since every adult must face and deal with financial matters, learning to cope with them while under the guidance of experienced parents is one of the most important steps on the road to independence. We could compare passing our faith and experience on to the next generation to a relay race. Any track coach will tell you that relay races are won or lost in the transferring of the baton from one runner to another. Seldom do sprinting athletes drop the baton once they have it firmly in their grasp. Losing it usually happens during the exchange between the runners. As parents, we have the responsibility to pass on the baton of the biblical principles of money management. At times it may seem as though we are not making much progress, but by being consistent, patient, and persistent, we can be successful.

Used by permission, Review and Herald®, Hagerstown, Maryland, © 1993.