What are the best money lessons to teach your kids?

[00:00:00] Ralph Estep, Jr.: Are you raising financially savvy kids? Or are you setting them up for a lifetime of money struggles? Imagine if you will, a world where every child grows up understanding the value of a dollar, understanding the importance of savings, and really feeling that satisfaction of earning their own money. Well today, we're going to explore how to make that world a reality for your family. Stay tuned to discover the best money lessons you can teach your children starting from their very first step.

[00:00:35] Ralph Estep, Jr.: If you missed yesterday's show, we talked about life insurance and the taxation of that. So if you miss it, I'm going to encourage you to go check it out. It could save you thousands of dollars in tax.

[00:00:50] Ralph Estep, Jr.: Now let's start with a message from one of our listeners. Kelsey writes this.

[00:00:56] Ralph Estep, Jr.: "Dear Ralph, I'm a single mom with two kids, ages 6 and 8. I have a lot on my plate raising these two on my own with the daily activities I already handled, but I'm worried I'm not doing enough to prepare them for financial success in the future. I don't want them to make some of the same financial mistakes I've made.

[00:01:15] Ralph Estep, Jr.: I spent several years trying to get back on my feet. What are some age appropriate money lessons I can start teaching them right now?"

[00:01:22] Ralph Estep, Jr.: Kelsey, that is a great question. And it hits close to home for me because my mom and dad split up when I was eight and my dad was in my life. My mom really was our primary caregiver.

[00:01:32] Ralph Estep, Jr.: So I understand what you're going through. I understand the struggles. And the truth is I'm going to share some insights today that have worked wonders for families, and I hope they work wonders for you. And before we get too far in today, I want to remind you if you've got a question for this show, all you've got to do is go to just askralph.com and let me know what's on your mind.

[00:01:54] Ralph Estep, Jr.: Well, your question today ties right into the Bible verse I picked. So let's ground ourselves in some scripture with Proverbs 22:6, and it says this. "Train up a child in the way he should go; even when he is old, he will not depart from it." See, the answer to our question today is it's not just about spiritual training. It applies to all areas, including our financial wisdom.

[00:02:24] Ralph Estep, Jr.: So you want to ask, how does this Bible verse help us answer Kelsey's question? In America, we are failing our children when it comes to financial education. We're setting them up for a lifetime of money struggles by not equipping them with the essential financial skills from an early age. So let me tell you about my client, Marty. Marty came to me a few years ago, he was frustrated with his own financial situation and the mistakes that he had made, and he was determined to do better for his kids. The truth is at this point, his kids were just barely walking, but Marty had a vision. Marty shared this story with me, and I thought it was perfect for today's show. Picture this. It's a sunny Saturday morning, Marty's living room floor is covered with three jars for each of his toddlers.

[00:03:11] Ralph Estep, Jr.: One of those jars is labeled Spend. Another is labeled Save. And the third is labeled Give. Now Marty starts this process. He hands each child a handful of pennies, nickels, and dimes. And Marty got down on the floor with them and starts explaining in the simplest terms what each jar means. Marty started with this is where we put money we want to use now. That's in the spend jar. This one is for later, he continues, indicating that was for the save jar. And the special jar, he told them, was for helping others. That's what we call the give jar. Now at first, to be honest with you, Marty said his kids just enjoyed the clinking sounds of dropping those coins into the jar.

[00:03:47] Ralph Estep, Jr.: But over time and work in this exercise routinely, something magical happened he told me. He said they started asking questions. They asked this question. They said, “Daddy, if I put more in the Save jar, can I get that big toy later?” And then they asked his wife, “Mommy, can we use that give money to buy food for the hungry people we saw downtown?” Now, you would say that's a great lesson to start off with, but Marty didn't just stop there. As his kids grew up, so did their financial education and by age 5, he had them work in simple jobs around the house. No, this was not child labor. They earned a small allowance, but he used that allowance to teach them budgeting across all their jars. And the truth easily told me by the time they were 8, those children are helping the family make budget discussions and budget decisions.

[00:04:33] Ralph Estep, Jr.: They understood the concepts, the biggest one they understood, and Marty shared this with me, and it's the truth. They started to understand needs versus wants. Now, you might be thinking, "Ralph, that's great for Marty, but I'm not a financial expert. How can I teach my kids what I don't fully understand myself?" And truth is that's a truthful, that's a valid concern. But here's the transformation that I saw. As Marty taught his kids, he found himself learning and improving his own financial habits. It became a family journey of financial growth. And think about this for a moment. You live what you learn. And if you are surrounded by parents who don't understand how to handle their finances, and I deal with clients every day that tell me this. They'll say to me, Ralph, you know, my mom and dad were terrible with their finances.

[00:05:22] Ralph Estep, Jr.: That TV was getting shut off. There were bill collectors calling all hours. Well, see, that's the key to this whole thing. That's what Marty found. Marty found that if he refined his self and improved his financials, improved his money skills, that would just trickle down to his kids. So what was the powerful conclusion Marty came to?

[00:05:42] Ralph Estep, Jr.: Well, let me tell you. This was a cool story. So Marty's oldest child turned 12. She had saved enough money that her and Marty, picture this. This kid had saved several hundred dollars. She wanted a bicycle. So her and Marty went off to the local bicycle shop and she was able to buy her first bicycle entirely on her own.

[00:06:03] Ralph Estep, Jr.: You know what else? She took a lot of time, Marty tells me, looking for that bike cause she understood the value of that purpose. She understood the value of that purchase. She understood the effort it took to save it. And more importantly, Marty said this smile on that child's face was amazing. She was from ear to ear.

[00:06:21] Ralph Estep, Jr.: She had found satisfaction of achieving a financial goal. So you might be asking, how can you overcome financial illiteracy in your family? I'm going to give you a few simple steps. First thing, as Marty learned, start early. The truth is even toddlers can grasp some basic concepts of saving and spending. If you give your kids everything, they're never going to understand the value of it. Number 2, as Marty did. Make it visual.

[00:06:45] Ralph Estep, Jr.: Those jars are a great idea. Maybe use a clear piggy bank so kids can actually witness their money growing. I remember having one of those as a kid. Now of course, I'm going to be honest with you. We tore into that with some scissors down the road because we wanted to buy something. Number 3. I've already alluded to this.

[00:07:00] Ralph Estep, Jr.: You got to lead by example. Involve your kids in age-appropriate financial decision. Now, listen, I'm not telling you to get your kids involved with, “Hey, we're struggling. You know, mom and dad are having a hard time.” That is not what I'm saying. Don't ever burden your kids with that. But there are times when you can make family decisions.

[00:07:18] Ralph Estep, Jr.: Let's say, you're thinking about going on a vacation. You can sit down with your family and say, okay, here are our options. Here are the costs for each option. And then you make a joint decision based on that. It's a real lesson for them, and you're going to lead that by example. Another thing you could do. Number 4.

[00:07:33] Ralph Estep, Jr.: And this one is crucial. You've got to teach your children through experience. Give those kids like Marty did, give them a chance to earn, give them a chance to save and then let them spend their own money. And don't be judgmental on how they spend it. Now you can say to them, “Hey, you know, I don't know if that's such a good idea.”

[00:07:48] Ralph Estep, Jr.: You know, his daughter really wanted a bike. He took her to the bike shop. They looked at different options. He didn't share with me whether she bought the most expensive or the cheapest, but he let her make that decision because that was her own money. And number 5. This is a Christian show. I'm going to emphasize this. You got to emphasize giving. Help those kids understand that joy using money to help others.

[00:08:09] Ralph Estep, Jr.: That was the coolest thing about that story. When Marty told me that. Was that giving jar because the truth is, and we did this with our own boys. When the kids were really young, we would encourage them to tithe and remember, it's not just about creating little misers.

[00:08:23] Ralph Estep, Jr.: That's not what I'm saying here. It's about raising financially savvy kids who understand the value of money. They need to understand the importance of why stewardship, that's a big word, but kids can understand that if you start them early and more importantly, begin that balance of enjoying today and preparing for tomorrow, because I think that's the biggest obstacle, is understanding that what you spend today, you're not going to be able to save for tomorrow. And kids understand that. That jar idea on the floor is a great idea.

[00:08:52] Ralph Estep, Jr.: And I would highly recommend that. Well, let me wrap up here by talking about just a little bit of a recap. We explored some critically important teaching for kids, and like I said, you can start at an early age. Just make sure it's simple and age appropriate. Like those labeled jars. You can give them age-appropriate jobs.

[00:09:08] Ralph Estep, Jr.: It really does lay a foundation for lifelong financial wisdom. And remember, it's never too early to start and you don't need to be a financial expert to begin this journey with your kids. If you can spend money, you can teach your kids how to manage their money. Well, join us tomorrow as we tackle another crucial topic and that's going to be what are 5 regrets of Americans who called it quits too early by retiring.

[00:09:32] Ralph Estep, Jr.: It's going to be a must listen to for anyone thinking about their long-term financial future. So if you're considering getting that retirement decision, I'm going to encourage you to check it out tomorrow. Now you might be feeling overwhelmed about your finances, or maybe you're unsure how to start teaching your kids about money.

[00:09:46] Ralph Estep, Jr.: Well, I'm here to help you. You can schedule an appointment with me just by going to askralph.com at the top of that page. You'll see a button that says schedule with Ralph. And for just $150, I'm going to work with you to create a personalized plan to improve your personal finances. Maybe you need help boosting your business or accounting for your business. And most importantly, I'm going to help you achieve your financial goals.

[00:10:07] Ralph Estep, Jr.: So don't wait to secure your family's financial future. Schedule today and let's create a legacy. That's true. A legacy of financial wisdom for generations to come. Remember this, you can sense it in my voice. My passion is to help you achieve financial success. It makes me go every day to see you living out your dreams and growing in your faith.

[00:10:28] Ralph Estep, Jr.: And I am more convinced that together, we can master your finances from a Christian perspective. So as I always say, when I close, stay financially savvy, And God bless you.