The key to wealth is simple: spend less than you make and invest with the difference. And the key to service is to give more than you take.
My name is Scott Donnell. I am married to an angel named Amy, and we have four kids at home. I have spent two decades learning how the strongest families on earth create generational faith, relationships, and wealth. As a family coach, I teach money skills to millions of parents and kids. I don’t use the phrase “financial literacy” because you can’t read money like a book. Money is learned through the practice of earning it, sharing it, saving it, investing it, and spending it wisely. In that order!
Money skills should be a key component of discipleship with our kids. But most Christian parents have no clue where to start or how to pass down good money skills at all. So, they either ignore it altogether, keep their finances hidden from their kids, feel inadequate because of their own debt or financial issues, or reverse-disciple their kids into thinking that wanting money is bad or that talking about it is a taboo subject. So, the only money talks they hear are from worldly people who make money their god, or from pastors who tell them to be more generous with it. And you can’t give what you don’t have!
So, here’s your money roadmap. This is how I teach my kids the right view of money.
(Side note: many of these principles come from my book, Kingdom Habits).
1. God owns everything; we are stewards.
The earth is the Lord’s and everything in it (Ps. 50:10). He owns the cattle on a thousand hills; he makes the rules, and our very life is given by him for a time. Everything we have–money, investments, jobs, houses, cars, health, relationships–is on loan from God. Our job is to glorify God and advance the Kingdom of Heaven with our lives, our relationships, our money, and our stuff. We do this by using what the Lord has blessed us with to serve others. So, your money becomes a ministry, your fridge is open for raiding, your car is never too nice not to loan out, your home becomes ministry, and your business becomes discipleship.
Everything God loans you is for a specific reason for a specific season. And parents steward their children’s hearts and minds. This means you have to train stewardship. Do your kids know what you are saving for and why? Do they know what investments you have, how they will grow, and why you even have them? Do your kids know what ministries you give to and how those dollars will make an impact for God’s Kingdom? Think about how you can involve your children in family giving and how they can learn to give from what they have earned as well. For Christmas this year, give your kids a sum of money 10 days before Christmas to give away, and report back on Christmas what they did for the Lord.
2. Every steward will give an account to God one day.
If we are stewards, we are managing God’s stuff for a short time until we meet him face to face to explain what we did with it for his Kingdom. We must teach our children that we will be held accountable one day before God for how we stewarded all the things he gave in this life. Jesus is coming back, and someday soon, all the books of our lives will be opened and reviewed. On judgment day, everyone who rejected Jesus will be condemned for their sins. But everyone who accepted and believed in Jesus will have their sins forgiven, and we will receive eternity with God in heaven. But it doesn’t end there—we will also give an account as to how we stewarded our lives and money for God, and we will be rewarded for it (or not).
When we get to heaven, our money and stuff will testify to God for us or against us (James 5:3). If that money is hoarded or selfishly accumulated (not just unethically gained), it will be a bad testimony. The motives and selfish desires of our hearts will all be uncovered. But if we invest now,build Kingdom businesses, serve the poor and needy, and give generously to Kingdom causes, those assets will testify for us. No Christian will experience heaven the same way, so choose wisely.
If you want to disciple your children in faith and finance, then use your money now to throw haymakers for the kingdom of heaven. Faith grows only through risk, so set an example of radical giving and risky faith. Put your money where your mouth is and give God both your heart and your wallet. Pray with your kids for the needs of others and then be the answer to that prayer to show them faith in action. If you want your kids to follow Jesus, then show them a testimony of how you have been bold, generous, and eternally focused with your time, treasure, and talents. Or just take them on yet another vacation…
3. What you cling to owns you.
Money that is not evil–money is a tool. The love of money is what ruins people. Parents who think money is evil have a poverty mindset. They say things like, “We can’t afford that… money doesn’t grow on trees… why would you even want that thing… do you know how hard I worked for that and you just take it for granted.” We should never crush our kids’ desires for things, but we must guide their hearts to want to glorify God more than they want stuff.
God wants to bless his children with good things (Matt. 7:11). The problem comes when we worship or want blessings more than the Blesser (Rom. 1:25). This is what creates idolatry. You cannot serve both God and Mammon (Matt. 6:24). Mammon is the insatiable lust for more (I call it the god of more)–more money, more stuff, more power, more security, more success, etc. All it causes is anxiety and the need to control and perform, and it will never give you peace (Eccl. 5:10). Money can easily turn into any of these idols. Idolatry happens when we cling to the things of this world instead of God. If you spend more time and effort chasing, earning, or worrying about money than you do seeking and spending time with God, it is an idol.
Many people think that generosity is the best way to dethrone mammon, but that’s not true. Surrender to God is the only way to kill the idols and escape the rat race. Surrender is the currency of heaven. It creates contentment and peace, and it leads to radical forgiveness, radical faith, and radical generosity. God doesn’t just want to give to us; God wants to give through us for his Kingdom purposes. The first step in teaching your kids the right view of money is to dethrone any idol that stands between you and God. If you don’t do this before teaching your kid about money, you will raise vultures and little idol worshippers. With that said, now let’s talk about money.
4. You can’t spell learn without earn.
Allowance is socialism. Kids should never get money just for existing. In fact, kids won’t learn anything about money until they have actually earned it first. You can’t give your kids ten dollars to put in the offering plate and expect them to learn generosity (that teaches redistribution theology). You can’t expect your kids to take care of their toys if they have never earned enough money to pay for that toy. If you buy a new water bottle every time they lose one, they will keep losing bottles. All money skills come after kids learn to earn. That is why we have a rule that if our kids want to go to a birthday party, they buy the present with money they have earned. This teaches true generosity.
The most successful families in the world don’t teach their kids to chase money. They teach their kids to create value because money is just a store of value. Kids need to learn early that the more they create material value, the more money they will be rewarded with. You create value for others when you solve their problem, do something for them that they would happily pay to get done, or you find what others need and get it for them. The value you create turns into money for you, and you learn a ton of skills in the process. Kids don’t learn lessons—they earn them. So, focus on helping your kids find ways to create value for others in one of the three main ways: material value (money comes from this), emotional value, and spiritual value.
This is also how you get rid of the greedie gimmies in your home: stop letting your kids ask for things all the time. The poverty mindset is where kids always ask, “Can I have this?” But the wealthy mindset is training your kids to ask a different question to themselves: “How can I earn this?” When kids start to think that way, it unlocks everything. They start to think about ways to create value and give more than they take. That is why value creation is one of the greatest superpowers you can give your kids as they go into adulthood.
If you are thinking to yourself, “but my kid doesn’t care about money,” it is because you are paying for everything for them. The fastest way to get a child to want to earn is by removing many of the rewards that you are giving them, and starting to give them ways to take on more responsibility to earn things. In our house, kids’ needs should be met, but their wants should be earned. Kids need time, love, attention, food, water, shelter, clothes, etc. But most parents have dozens of rewards they just give their kids without any of it being earned (tech, games, toys, treats, social outings, sports, experiences, money, etc). Here’s the rule: rewards without responsibility equals entitlement; responsibility with rewards equals resentment. Kids have basic roles in the home that have nothing to do with rewards (make bed, clean room, do the dishes, take out the trash, homework), but they should also have a whole host of things they can do to earn the rewards they want. So, in our house, our kids don’t do chores; they build skills and earn.
5. A good steward gives every dollar a job.
Once a kid starts to earn money, they need to give every dollar a job, or it’s wasted. We call this splitting up the money into buckets. We call it the 10/20/70 Rule. The first 10% of the money has the job of thanking God for it all. This is the tithe, and that money goes into the share jar for church or other ministries. The next 20% is for saving and investing. Saving means those dollars should take care of the three E’s: emergencies, education, and experiences. This is what we should teach them to save for. Investing dollars is to go off and make more dollars. Investing dollars will have that job forever! They may change how they make more dollars (stock market, real estate, a business, loaning with collateral, certain insurance products, etc.), but their job never changes. For every dollar my kids put in that jar, we double it right away to teach them. Finally, 70% of the money pays for the things we need to live, followed by the things we want to buy.
There’s another level to this game, however. When I was a teenager, my dad told me that if I want to have true wealth and freedom, I should switch the 20% and the 70%. So, I should live off 20% of what I make and save and invest 70%. Save until I have a six-month emergency fund, then invest the rest. If I could live that way for ten years, then my investments would earn enough interest that it would pay for my monthly living expenses forever. He was right, and it worked. But because I learned these skills early, I didn’t stop creating value or investing. Now we can give more than we ever dreamed we would give.
6. Practice The Habit of Compounding.
Your children are not the product of you as their parent; they are the product of the systems and environment they are raised in. Whatever systems,frameworks, and incentive structures you create will have the greatest compounding effect on your kids’ future. This is what we teach in our family training program (MentorFamily.com). But the main point that you must train your children is this simple idea: consistency compounds.
God created things to compound and multiply. If you have a scarcity mindset, you will only see lack. Abundance and gratitude are what multiply. We were created to be fruitful and multiply and take dominion of the earth (Gen. 1:28). One person can share the love of Jesus with thousands of people in their lifetime. Investments create compounding interest over time, which is why money doubles in less than ten years and quadruples in twenty years when you let it grow in a diversified portfolio. We need to train this way of thinking into our children in the home: good decisions compound, and so do bad decisions. Good friends compound our character over time, and so do bad ones.
The greatest asset that kids have right now is their time, not their money. That is why time in the market beats timing the market every time. So, kids and teens should invest in themselves and learn the right ways of living that will have the greatest return for their future. Every money rep that your kids make before they leave your home will compound for life. You want them to make the $50 purchasing mistake in your home now so they don’t make a $50,000 mistake later in life. If they are generous with little, they will be generous later on with much more (Lk. 16:8.)
7. Charge for results, not time and effort.
Have you ever heard of the Rule of 170? If not, it is because I made it up. Let me explain. Since 2011, we have helped ten million families learn money skills, and we have put on over 5,000 children’s business fairs. When we studied our families over time, we realized something crazy. We learned that for every $1 a kid earns before 18 years old by creating value for others, it equals about $170 of extra income as an adult. But here’s the catch–it has to come from charging for results, not time and effort. This means that they have to get paid by completing a gig for something, solving a problem, finding a want or need and meeting it, or getting paid directly based on the value they create. So minimum hourly wage doesn’t count.
I’ll give you an example. I was coaching a family in Colorado where the son had just mowed lawns all day for $8/hr. He worked 9 hours and made $72. So, I asked him if we wanted to make $1000 next weekend instead, and he smiled. I told him to go to the next neighborhood and offer everyone $40 to mow their entire yard instead. So, he and his brother dropped papers off at every house, and the next Saturday, 25 families said yes. He mowed like a madman all day, finished the jobs, and collected $1000. This is the difference between charging for results (or the value you create) and charging for your time and effort. When you learn to make money in ways that aren’t directly tied to the hours you put in or the effort you showed, but by results, you start to realize how the wealthy think. They don’t work for a salary to pay the bills; they charge for results, build profitable businesses that scale beyond their time, and invest in profitable systems that make them money while they sleep.
So here’s your starter kit for discipling your kids around money. If you have questions or want to implement them alongside us in our parenting community, head over to mentorfamily.com for more help.
