FIRSTFRUITS FINDINGS NEWSLETTER VOL. 10 NO. 1 JAN – FEB 2005 A NOTE FROM THE DIRECTOR I don’t remember getting an allowance, but I was taught saving, spending and sharing when I got my first “job” delivering the Muskegon Chronicle. As my sisters and I were reflecting on our mother’s guidance during a recent memorial, we remembered her teaching us money management. I remember sitting at the kitchen table dividing up my paper route money with my mother’s help. After paying the “Chronicle” and an occasional amount to my sisters for subbing, mom insisted on saving and sharing. Our savings were intended for a long-term goal — college. Even though my mother only went through the sixth grade, she kept our focus clearly on saving for college. I believe we as parents need to help our kids establish long-range goals and to encourage them to save. I had a tithing envelope where she taught me to set aside 10%. This was taken to church on Sunday. While I felt it was a duty for me because mom said it was a good thing to do, as I grew I learned sharing was an important part of my development as a young Christian . ~ Norm Vander Wel RAISING CHEERFUL GIVERS This is fourth in a series of articles on “Raising Cheerful Givers”. Helping our children understand financial principles will not only help them manage their money, but also become joyful stewards. Once children receive a source of income either by allowance or other means of making money, they are ready to learn how to manage it. The first step is making a budget and practicing the discipline to stick to it. Teaching children how to budget will not only help them reach their goals, but will also teach them how to make wise choices throughout their lives. To effectively create a budget, children need to understand three things: sharing (tithing), saving and spending. Instead of just dumping all their money into a piggy bank, we want to help our children determine an appropriate amount or percent of income for each area. SHARING. Perhaps the most important lesson in our children’s financial training is the concept of stewardship. Sharing doesn’t come easily for most children. Their natural sense of ownership says, “It’s mine and I want to keep it!” This is an opportune time to help them understand that everything is not ours but is really God’s. We are just managing or “taking care” of it for Him. This concept begins to lay the foundation of a lifetime of faithful stewardship. Sharing also teaches children that the world is bigger than themselves. By sharing, they will understand the value of reaching out to help others. SAVING. Setting short- and long-term goals with our children, depending on their age, will be very beneficial to them and their future. Whether it is a new toy, video game, bike or other item, saving helps children understand the rewards of accumulation now and spending later. To help a child stay motivated in saving, you may want to offer to match with your own money all or some of the amount they save. SPENDING. The last category is discretionary spending. Let them spend this amount on what they choose. Let them make the decisions, good or bad, about what to buy. After purchases are made, discuss it with them. For example, after they have bought yet another video game, share with them what else they could have used with that money. Or, after they’ve made a good decision, show them how others are making less desirable purchases. Allow this to be a learning experience so they can learn the importance of making good decisions. Children can learn the principles of sharing, saving and spending at a very early age. For example, preschoolers can be given three coins each week to put into the three categories. Once children enter grammar school, they can begin to divide their income by percentages. A good guide to start is ten percent of their money goes into sharing, 50 percent into saving and 40 percent into spending. There is no borrowing from one category to another. Remember when the spending money is gone, it’s gone. By supplementing those budgets, we would defeat the purpose and send the wrong message. It doesn’t take children long to recognize that money is important. It takes more time to learn how to use it well. Remember, not having a plan is a plan to fail. The rewards of teaching good financial management according to biblical principles will provide our children the foundation for joyful giving and responsible living. ? GRASPING REALITY There are many ways to provide your children with the tools to take control of their financial future. As Jayne A. Pearl states in her article, Teaching Kids About Money (9/28/01), “When your children leave home with a financial education of their own making, they can be proud of their accomplishments. You can be proud of their ability to grasp the values that will help them build their own independence as they grow older.” One set of parents shared their method of reaching the goal that by the time their children left home, they would have plenty of hands-on experience in budgeting their money. They began with a weekly allowance of $1 per each year of age of the child until they left high school. Money was separated into envelopes for tithing, savings, family gifts, vacations, and general expenses. They were taught the importance of tithing, which generally went to church. As the children grew older, the parents would often match their giving to a ministry of the child’s choosing. Their allowance was used for all nominal expenses such as an occasional hot lunch at school, hobbies, and gifts for family and friends. Savings went for large items such as bikes, cars and sports camps. Upon entering 8th grade (about 13 years old), they were given a clothing allowance twice a year, in the fall and spring. Mom sat down with each child and discussed that items of clothing they thought they would need for the next six months. This included pants, shirts, shoes, socks. Mom had the right to veto unnecessary items. Together, they estimated the non-sale cost of all the items of clothing. The teens were then given the cash in a “clothing allowance” envelope. Their teens learned very quickly that if they beat the retail price on the clothing list, they could keep the difference. So, there was an incentive to shop for sales and bargains. Most beneficial were the periodic family meetings Dad and Mom held with their children to discuss their children’s budgets, to work through any crisis and talk about ministries of interest to the children and family.? TIPS TO TRY Clever cost-cutting ideas to use at home: Install mechanical time switches (available at home improvement stores) in the bathrooms and laundry room. They are available in times from 15 minutes to several hours and are easy to install. After the time expires, the lights turn off automatically. In the winter season static cling is always a problem. Keep a dryer sheet in your purse or car. When your hair gets static cling, lightly stroke the ends of your hair with the dryer sheet. No more cling! The sheet lasts for many uses. Make a heart-shaped cake: bake a round cake and a square cake in pans that are the same size (both 8-inch or both 9-inch). Cut the round cake in half. Place each half of the circle on adjoining sides of the square cake to form a perfect heart. Frost and decorate. Share with your favorite valentine! RECOMMENDED RESOURCE “My Giving Bank” Larry Burkett/Crown Ministries My Giving Bank is designed to teach your child the value of money and how to handle it in a way that is pleasing to God. This three-compartment bank with sections for tithing, saving and spending also comes with Bible-based information for parents. It is a great teaching tool for preschool and grade school children. ($18.00 +s/h) Order from Crown Ministries at www.crown.org (click on Store, Children’s Finance, Games & Banks)