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Friday, June 5, 2020

Why Should Parents Teach Proper Financial Management to Their Children?

            Families, communities, and nations are stronger when children are taught proven principles and practices. I learned gratitude for obedience to numerous principles during the COVID-19 quarantine. These principles made my life comfortable and secure during a time of unease and worry, and I know that other people were better prepared by following them.

One example, I am grateful for being taught the importance of storing enough food and supplies to last 90 days. When people were panicking about toilet paper, I was not because I knew that I had enough and to spare. I also knew that I had enough food in the house to eat comfortably without going to the store. The fact that the stores were open and had supplies made my meals more enjoyable.

My second example is two principles. The first principle is to stay out of debt as much as possible. My husband and I live debt free by paying our accounts fully each month. The second principle is the importance of having enough money saved to cover expenses for six months. I felt peace knowing that we had enough money in savings to pay our expenses.

I have often felt that I did not teach good financial principles to my children. However, I feel better after reading “TeachingYour Children about Money” by Ashley B. LeBaron and

E. Jeffrey Hill. They wrote, “Research reveals that parents are the number-one source of kids’ financial education. Kids learn more about money from their parents than from school, media, peers, and work experiences combined.” My children are all doing well at managing their money, so I must have done an okay job. However, I am aware that I should have done better. The authors included this quote from Elder Joseph B. Wirthlin (1917-2008) of the Quorum of the Twelve Apostles of The Church of Jesus Christ of Latter-day Saints who was speaking to parents when he said the following. 

Too many of our youth get into financial difficulty because they never learned proper principles of financial common sense at home…. Teach your children while they are young. Teach them that they cannot have something merely because they want it. Teach them the principles of hard work, frugality, and saving (“Earthly Debts, Heavenly Debts,” Ensign, May 2004, 42-43).

            LeBaron and Hill shared seven principles and practices to help parents teach their children about money. Their first principle is “First things first – Use tithing to teach spiritual and financial principles.” Some of those principles that will bring spiritual and financial security are consecration, accountability, and obedience.

            The second principle is “Hard work – teach children to earn their own money.” The authors say that learning to earn their own money “combat[s] a sense of entitlement” and that parents should teach the value of work. They quote Elder Neal A. Maxwell (1926-2004) of the Quorum of the Twelve Apostles who said that “work is always a spiritual necessity even if, for some, work is not an economic necessity…. I have not seen any perspiration-free shortcuts to the celestial kingdom” (“Put Your Should to The Wheel,” Ensign, May 1998, 38, 39).

            The third principle is “Budgeting – even five-year-olds can learn to live within their means.” They wrote, “Budgets teach children to save and sacrifice for what they need and want…. The best budgets are those that reflect the person’s principles. Talk with your kids about what they value, and help them develop their own budget accordingly.”

            The fourth principle is “Choices – Give children autonomy in managing their own money.” The authors wrote, “Children need both limits and latitude…. It is inevitable that when you give kids opportunities to handle money, they will make financial mistakes. However, it is better for them to make those mistakes – and learn from them – at a young age when the consequences are not as big…. Apply Joseph Smith’s principle: “I teach them correct principles, and they govern themselves” (Teachings of the Church: Joseph Smith [2007], 284). 

            The fifth principle is “Communication – Talk openly and regularly with children about finances…. A good forum for financial discussion is family financial council meetings…. Money itself is neither good nor evil, but what we do with money can be either good or evil. Even taxes, investments, and insurance can become sacred when viewed through a gospel lens.”

            The sixth principle is “To the bank – facilitate real-world financial experiences for children…. We need to give our kids age-appropriate responsibilities and let them learn through their own experience. Whatever financial value or habit you want them to internalize, you can facilitate experiences where they can practice it now while still at home.”

            The seventh principle is “Relax and let the Spirit guide you. … Do your best and invite the perfect teacher – the Spirit – to partner with you as you teach your children….”

            LeBaron and Hill are not the only people who encourage parents to teach their children about money because a simple Google search brought up numerous sources. However, some sources are better than others. Elder Marvin J. Ashton (1915-94 spoke on the topic of finances in general conferences, and his talk is now a pamphlet available from The Church of Jesus Christ of Latter-day Saints titled “One for the Money.” He taught twelve points to help individuals and families teach individuals and families proper money management. 

1. Teach family members early the importance of working and earning.

2. Teach children to make money decisions in keeping with their capacities to comprehend.

3. Teach each family member to contribute to the total family welfare.

4. Teach family members that paying financial obligations promptly is part of integrity and honesty development.

5. Learn to manage money before it manages you.

6. Learn self-discipline and self-restraint in money matters.

7. Use a budget.

8. Make education a continuing process.

9. Work toward home ownership.

10. Appropriately involve yourself in an insurance program.

11. Strive to understand and cope with existing inflation.

12. Appropriately involve yourself in a food storage program.

            Elder Ashton said that his “points and suggestions are not intended to be all-inclusive nor exhaustive” but considered them to be “basic guidelines for wise money management.” He also said that “Money in the lives of Latter-day Saints should be used as a means of achieving eternal happiness.” If we do not practice sound money management principles, “careless and selfish uses cause us to live in financial bondage.” 

God will help us to learn proper financial principles and how to apply them in our home. As we teach them to our children, we will become instruments in the Lord’s hands to strengthen our family, community, and nation.

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