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How I teach my kids about money

Money has a mystical quality. In ages past (aka 10 years ago), people carried around paper currency. New, crisp bills had a sacred aura. The stamped sheets of green had a fresh aroma like a new car. And then there were metallic circles called coins. I remember my parents used to collect pennies in rolls. I haven't seen a roll of pennies in years and I'm certain it functions better as a paperweight. 

Technology has worked to make money invisible and touchless. It's no longer a physical transaction. We pay our credit cards online and shift them out of our attention through auto-pay. We set up recurring donations to our local church or charity. Taxes, healthcare premiums, and 401(k) contributions are automatically deducted from our paychecks and the remainder is directly deposited to our bank accounts. Even as money has become less visible, it's also become more visible in strange and magical ways. Every now and then, I scroll through my Venmo public transaction feed and guess the amounts my friends are paying each other. 


We watch the digits in our bank, brokerage, and crypto accounts go up and down, along with our delight and anxiety. With real-time finance apps, we implicitly invest in an emotional index fund. Our emotional life is tethered to the moment-by-moment fluctuations of our portfolio’s market value. I can literally sit and stare as my money grows or shrinks. Because money exerts this powerful unseen influence, it's difficult to teach children its impact without making it visceral. In order to teach children about money, we need the digits to be made flesh. We need to demystify money by making it visible and touchable.


Get that paper: A friend shared his idea of how he made money visible for his children. He converted a month's paycheck into cash and then labeled an envelope with an expense category such as cell phone, utilities, mortgage, food, etc. After dinner one evening, he presented the cash and then had his children guess how much cash should go into each envelope, representing a month's worth of that particular expense. They would count the money out and then he would add/remove bills to illustrate the actual spending for each expense category. I loved the idea and did this with my children a couple of years ago. Even on a pastor's salary, a month's paycheck is way more cash than I like to carry (which is$0) and I converted a week's worth into various denominations of bills. Then I divided the most recent total annual expenses for each category by 52. 


When I first presented the cash, my younger children were amazed at how much money it was. Rarely does anyone see that much cash. It was enlightening to see what my children estimated for each category. For instance, they overestimated how much we spend on our cell phone service. Given their massive importance in our digital life, a phone bill costs practically nothing. They underestimated how much we give to our church and to charities. I distinctly recall one of our kids asking why we give so much money away. I think he believed he should be entitled to some of that cash and I totally get his thinking. 


Family Love fund: The other way we teach our kids about money is we set up a family love fund. Churches have love funds in order to bless someone in financial need. Judy and I wanted to model generosity for our children and we set up a family love fund where a monthly amount is transferred from our checking account to our love fund account. Periodically, we discuss needs of friends we're aware of and how we might give this money away. My kids don't have much preference of how it's used but I think they appreciate how we involve them in the discussion. I don't know a good way to make this visual but I'm open to ideas. I know there are families that keep a "love jar" (my term not theirs) and place cash inside until it accumulates enough to give away. What's important here is to have a basis for discussion of generosity since so much financial happens invisibly.


Breaking the Spell: I enjoy teaching my kids about money but sometimes I wonder what exactly is the lesson or value I’m communicating. For example, I also love talking with them about the power of compounding. I bought stocks for each of them in Robinhood to help illustrate the impact of time in the market. And yet my personality and upbringing influences how I view money in ways I can't hide. 


The reality is there are many ways we as parents teach our children about money without intending to. Whenever I ask how much something costs, I'm teaching my kids about my view of scarcity and abundance, how I view generosity, and what I view as valuable. For example, when our family goes out to eat, even for fast food, it can get quite expensive. With four active children between ages 13-20 years old, our family eats A LOT. I remember taking my family out to a trendy ramen (sorry, redundant) place. It was a rare treat. As I scanned the entree prices, I couldn't help but remark on how expensive each bowl was. I recall telling my hungriest son that he couldn't order the largest portion with additional sides. The atmosphere of our meal shifted somewhat from that point forward. The food was decent but I remember leaving the restaurant thinking about my kids and asking myself, 


“What if their enduring memory of eating out as a family is Dad complaining about how much each dish costs?”


Money has a power that goes beyond whatever conscious intentionality or conspicuous virtue signaling that I want to display. It affects what neighborhood we choose to live in (high-scoring schools), the kind of car we drive (Tesla or not?), and how we interact with panhandlers at freeway exit ramps (eye contact, cash or both/neither?). It affects our wardrobe choices and how we portray ourselves on social media. There are money patterns embedded in my subconscious that I want to uproot and redo. Money casts an invisible spell that is vital to break. Many Christians argue that money is a neutral resource. Rather, it’s all about how it’s used. And yet scripture indicates there are supernatural forces at play when humans interact with money. That’s hardly innocent and doesn’t sound neutral. Regardless of whether money is neutral, its invisible temptations are palpable in our culture and throughout history. Most of us work extremely hard to keep our financial standing and money habits secret. There are tensions here that are important to disclose and discuss. I've begun talking to my children and my church community about that struggle. It's not easy to share about but I now experience moments of freedom from money's gravitational pull. I encourage you to take the leap and do the same.

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