by Debbie Altman

Growing up, our children knew that we only ordered water when we went out to dinner, (which was only if it was “kids eat free” night and we had a coupon!) We drove older used cars and almost all of our furniture was from Craig’s List (and our home looked very nice, actually!)  To this day, our adult children joke at how deprived they were that they only got Happy Meals twice a year, on each of their birthdays!  My husband quips that, “they were already happy!” 

Despite what we did as their parents, we knew our kids needed to know how to manage their own money. We’d heard plenty of stories of young college students who’d fallen into so much credit card debt that they became overwhelmed and depressed, and some even took their lives. Or stories of young couples starting out their marriages with huge amounts of debt.  So, one day while listening to Christian radio, I heard a program about teaching children the value of money.  We decided to start it right away with our kids.  Here’s how it works.

1.  Determine the “Kid Cost” – Instead of doling out money to your children a few dollars at a time for the things that you normally give them money for – clothes, toys,  money for a movie, a friend’s birthday gift – decide how much money on average that you are actually spending on them over a month’s time.


2. Divvy it up – After determining each child’s “Kid Cost,” get cash in that amount and divide the money into envelopes. For example, the envelopes could be labeled: Tithe, Save, Clothing, Entertainment, Gifts, Extras.  You decide how much should be in each envelope to start.


3. Place it in their hands – Now, hand over the envelopes to your children!  Yes, it sounds really scary, but it works! Over the next month, any clothing items they might desire must come from that money.  (Basics like underwear and socks, or large ticket items like a Prom dress, were still provided by us.)  If our daughter wanted a special pair of jeans that were more expensive, she learned to save up a couple months worth of her “clothing” allotment.  If they wanted to “borrow” from their clothing money for extra entertainment money, they could do so, but it meant they had less money to spend on clothes, (or skate board shoes!)


4. Don’t leave them alone – Through the whole process, our kids were still required to talk with us and get permission for decisions they were making. This allowed for many teaching moments. They learned quickly if something they wanted was really worth it.  And if it was, then it was worth waiting and saving up for.

Not surprisingly, there were many things they might have previously asked us for, that they now realized weren’t worth spending THEIR money on!  Having to budget and make choices about where to spend and not just “picking from the money tree,” taught them the value of money and self-control.  And the responsibility and trust given to them by us through this system brought them to another level of self-confidence and maturity.  The transformation was amazing!  (Our children did have required chores and responsibilities, by the way!)  This approach can continue to be adapted to the ages and personalities of your children, and can be applied all the way up through high school and even college.  We highly recommend it and have seen the fruit of it in the lives of our adult children. You won’t regret it!  

Debbie is the wife of Pastor Craig Altman, and together they founded Grace Family Church 18 years ago.  She is a former RN and mother of a 27 year old married daughter and 26 year old son.  She is also known as “Nona” to her precious granddaughter. Debbie enjoys family, reading and the beach, and is inappropriately competitive at board games.