The ability to manage money is an important skill that can be taught early in life and continually reinforced throughout the growing up years. The age of your children will determine which concepts you wish to focus on during this lesson. For teens, see my more in-depth post Here. You can also read through that post for ideas on teaching budgeting, general tips on money management, links to financial websites, and quotes by prophets.
Hymn Suggestions:
- Count Your Blessings #241
- I Will Follow God’s Plan (children’s songbook)
- Put Your Shoulder to the Wheel #252
- Today While the Sun Shines #229
- I Have Two Little Hands (children’s songbook)
Here is a possible outline for your lesson. There are quite a few ideas, but you can choose to include only the elements that you feel will work best for your family:
> Give each of your children a marshmallow or small chocolate bar or some other treat that they like. Explain that it is their choice: They can eat their treat now if they wish, but if they wait until the end of the lesson, you will give them 2 more of that treat (so they will get to eat 3 instead of just 1).
> Read the book Alexander, Who Used to Be Rich Last Sunday
Discuss saving vs. spending. Teach your children that a portion of their income (somewhere between 20-50% should always go into a long-term savings account).
> Discuss the concept of needs vs. wants. Make a list on a whiteboard or on paper of things in your family’s life that are needs and things that are wants. The actual needs should be a very short list. Discuss how even though you need clothes, you don’t need to have expensive or even new clothes. Although you need food, you don’t need snacks or junk food. Etc.
> Remind your children to also pay tithing first when they receive money. There are plenty of stories and object lessons to go with this, but that is the subject of another lesson. For now, just mention it in your discussion. Testify that Heavenly Father will bless those who pay their tithing both financially and spiritually.
> Read the Parable of the Talents found in Matthew 25:14-30. Explain that “talents” were the name for money during that time period. Discuss that the Lord expects each of us to work. He does not want us to be slothful. He wants us to be careful and responsible with the money and other blessings He has given us.
> Share a personal experience of your own in which you worked hard and received a financial reward. Explain how you felt and what you did with the money you received. Ask others in your family to share a story if they have one.
> Choose one or two of the activities listed at the end of this post.
> Ask each of your family members to list 3 personal goals concerning their finances. Discuss how to save for these goals.
> Check with your children to see which of them has eaten their treat and which chose to wait to receive more. Discuss how money put in the bank earns interest and becomes more money. Also discuss how the key to success in life, especially when it comes to finances, is the ability to discipline yourself and delay gratification. You can praise the children who chose to wait. If any of your children chose to eat their 1 treat right away, let them know that you have confidence in their ability to learn to delay gratification in the future. Testify that self-discipline will bring them security and happiness.
If desired, share this quote:
“The key to spending less than we earn is simple—it is called discipline. Whether early in life or late, we must all eventually learn to discipline ourselves, our appetites, and our economic desires” (N. Eldon Tanner, in Conference Report, Oct. 1979, p. 119; or Ensign, Nov. 1979, p. 81).
If your children chose to wait for the extra treat, share with them that this was an experiment conducted by a man named Walter Mischel. He studied a group of children and allowed them to either eat 1 marshmallow now or receive 2 marshmallows later. He followed the children for 14 years and found that the ones who chose to eat the 1 marshmallow were prone to be envious, stubborn, and easily frustrated. The children who were able to delay gratification to receive an extra marshmallow grew up to be optimistic, dependable, assertive, and trustworthy. They scored much higher on their college entrance exams than did the first group.
Be sure you don’t judge your children harshly if they fell into the first group. Just let them know that the ability to delay gratification is an admirable quality that they should work toward. If they can achieve it, they will have a happier, more successful life.
> As always, conclude your lesson with your testimony. Let your family know that they can find happiness in life through hard work and self-discipline. Let them know that if they save their money, they will have it for the things they truly need. Bear testimony that the Lord will help them to develop the discipline needed and will guide them in their financial decisions.
Activities to Go Along with Teaching Money Management
> Check This Link for an activity to teach your children about the family expenses. You will basically be giving them the amount of money that you earn each month and then asking them to use it to pay each of the bills. See how much is left over and discuss the best ways to use this money.
Discuss this quote from Henry B Eyring in the Feb 1998 Ensign: “There is an old formula which goes something like this: Income five dollars and expenses six dollars: misery. Income four dollars and expenses three dollars: happiness.”
> Have your children make 3 banks for themselves. Label one for tithing, one for savings, and one for spending. Discuss things they might like to save for such as college or a mission or a car when they get to be a teenager. You could also do 4 banks and make one for long term savings and one for short term savings for things they might want now such as an iPod or new toys. Here are some links for tutorial for homemade banks:
> Create a Price is Right game. Make a list of different things you usually buy at the grocery store. Alternatively, you could add toys and other household items to your list. Print a copy for each child and have them fill in what they think the price of that item is. Then take a trip to the grocery store or to Walmart and have them find the items and fill in the actual prices. See who came the closest in their guesses. I’m thinking it would work best to include items you usually buy and items the kids are always asking for in your own, personalized list. However, if you want a super cute game that is already made for you and includes adorable printables, check This Link for a game by the Dating Divas.
> Take your kids to the bank to set up their own savings accounts if they don’t already have them.
> Consider offering to match any amount that the children put away into a long term savings account that they will use for their missions or college.
> Have a lesson on compound interest:
Ask the kids which they would rather have: A $1,000 bill today or a penny that doubles every day for 30 days? Let the kids talk about that a bit. Ask for a show of hands for who would want the penny and who would want the $1000.
Then commend the ones who chose the penny and tell them that at the end of 30 days, the doubling penny will be worth a cool $5.4 million! Check This Link for a chart to show how it works. You can illustrate the first part of it with actual pennies if desired.
Explain how saving your money earns you the interest, but if you borrow money, you will have to pay all that interest to someone else. Thus, you always want to save for your purchases and never buy on credit.
This Site states that if a 5-year-old child saves $57 per month, he will have a million dollars by the time he is 65 years old. However, This Calculator puts the amount at more like $100 per month. Either way, it’s an interesting concept to begin saving as a child with the expectation of having a million dollars in the bank by retirement age.
> Play one of the following games that teach about money:
- Moneywise Kids(Game, Age: 7 – 99 years)
- Payday(Game, For 2-4 players, Recommended Age: 8 – 12 years)
- Rich Dad Cashflow for Kids(Game, 6 – 12 years)
- Monopoly Disney Pixar Edition(Game, For 2 to 6 players, Ages 8 to adult)
- Careers (Game, Ages 8 and up)
