How to Raise Debt-Free Children


Everybody talks about it.

Almost everybody thinks they need more of it.

Some people have budgets or spending plans.

Many people are in debt; some are deeply in debt.

Most of us wish our children would learn to manage their money well – perhaps better than we think we manage our own.

How do we teach our children to manage money?  What does the Bible say about money, and how do we communicate these principles to our children?

The Bible says that God is the Creator and Owner of all. (Psalm 24:1,2; Psalm 104:24 – 30)  We are merely stewards of the money and possessions He has entrusted to our care and oversight.  We are to return back to Him a portion of what He has given to us, obediently and cheerfully. (Malachi 3:10; 2 Corinthians 9:6–8) We are to use the rest to provide for our families, and to care for the needs of those around us in a discerning and thoughtful manner. (Ephesians 4:28; Micah 6:8)

These are the principles we are to teach our children, from their earliest moments.  We are to teach them not only with our words, but also by our actions.  Do our children see us return a portion of what God has given to us regularly, cheerfully, and obediently?  Do they see us work hard and make thoughtful decisions to meet the needs of our families?  Do they see us helping others with wisdom and kindness?

How do we help our children apply these principles with their own money?

First of all, they need to have their own money!  Different families do this in different ways.  Some children are paid specific amounts for the completion of certain chores.  Some children receive an allowance.  I heard of one creative couple who paid their children for each biography they read. However you choose for your children to receive money, they need to be taught that some of it needs to be returned to God.

Our children started to receive an allowance when they turned five years old.  We taught them that at least 10 percent needed to be given to God at church, and we requested offering envelopes from the church office for the new tither.  (Some seemed surprised at the request for a five year old, but no one ever turned us down!) We also taught our children that at least ten percent of all their earnings had to be put into a savings account, to develop a habit of saving from the very beginning. Our rule was that savings could be dipped into only for a car, tuition, or a house.

It is much easier to continue to live on 80 percent of one’s income as an adult when it has been done since childhood.

We have also observed that a five-year-old who receives ten dimes for an allowance feels rich when he sees only one dime go into his offering envelope, and only one dime go into savings, and realizes he has eight whole dimes left to spend as he chooses.  When did we lose this sense of God’s generosity and blessing in our lives, and think that our “needs” demand more than 80 percent of our income?

Now, how do we teach our children how to use the 80 percent wisely?  We gave our children a fairly wide latitude in what they did with that money, offering guidance and suggestions, but giving them freedom to make choices and to learn.  Some chose to give extra to meet special Kingdom needs.  That is a real blessing for parents!  Sometimes they frittered it away on trivial things. When they found something they really wanted and discovered they did not have enough money to purchase it, they learned that when you run out, you do without

We had to learn not to bail them out or try to “fix” their mistakes.  We realized that it is better to let them make some bad choices with a few dollars – and learn from it – than to make bad choices later on with many more dollars.

What about debt?  The Bible teaches us not to become a slave to debt, and this is certainly something our children need to learn.  On extremely rare occasions, when there was a particular item that one of our children wanted, we would let him “borrow ahead” to purchase it, in large part so he would learn about debt first-hand.  We were very strict about re-payment, and when the child saw how little was left from each week’s allowance after tithe, savings, and debt payments were taken out, he soon learned to find debt a burden and something to be avoided.  Planning ahead and waiting to purchase what he wanted seemed a much better option.

All of this may sound good and helpful, but we don’t want our children to give only because we say so, and to scheme to get the very most for themselves from their money.  The most important element in teaching our children to manage money is to teach them about God’s gift of salvation for them through the death, burial, and resurrection of His Son Jesus.  We demonstrate His life in us daily before them, and we pray earnestly for their salvation.  When they do make the choice to follow Jesus, His Spirit in them will guide them in all their life decisions, including how they handle the money and possessions He has given them.  Only then can they know the true joy of obedient giving and of living a life of discipline and service to their families and others.