Our Family’s Financial Philosophy: Give, Save, Spend

It’s always the same story:

Roenne (My 5 year old): Appa, can I get a new game (for the iPad or her iPod)?

Me: Well sweety… let’s see what’s in the App Store that’s new and free, shall we?

Roenne: Ok…

Except, this time, she wanted one that was most definitely not free.

Roenne: But Appa… I want a game that costs money.

Me: … … … hmmm… …

What’s neat is that we’ve been teaching our children a principle of financial planning since she was two years old, one that we first heard from our Pastor, Andy Stanley. We started with a $1 and divided it up into quarters, dimes, and nickels and showed her where to put them. Since then it’s been increased over time as she’s been visited by the Tooth Fairy and gotten money from grandparents for birthdays and such.

It’s called Give, Save, Spend and it’s very simple:

  1. Give – First, whenever you get a paycheck or some money, you set aside some of it to give back to our church and for those that need it more than we do.
  2. Save – Second, you put at least 60% of what’s left over into your savings (we call this bucket “Money for a rainy day!”).
  3. Spend – Lastly, you use what is left over for spending on what you need which may include fun things (like iPad apps).

Of course, for our much larger “more grown up” version we have figures, budgets, and plans that dive into each category but for our children the principles are just enough to get started. Give first, save second, and then spend last.

The lesson continued…

Me: Well, Roenne, do you have any money in your “Spend” cup?

Roenne: Hmm. Let me check..

She then goes off and grabs her three cups and brings them back. She counts $18 in her “Spend” cup and proudly smiles.

Roenne: I’ve got $18 dollars! I can spend some, right?

Me: Sure. This game is (gasp) $4.99 which is almost $5 dollars. Count me out $5 and I’ll get you that game.

Roenne proceeds to quickly count out the dollars – I’ve never seen her move so fast…! This was the first time she had actually spent some of her money explicitly on something that she had wanted. I knew this was a teaching moment!

I wrote out for her the simple math and she easily saw that things were being deducted from the Spend cup. She handed me the bills as well as the iPad.

I typed in the password and we waited for the new game to download. She was incredibly proud of herself but as she was about to go off and play it she asked this most interesting question:

Roenne: Appa… … how do I make more money because I used some today?

I smiled, gave her a great big hug and whispered:

Me: You do work that you love.

Roenne: Ok. I will.