It’s a common misconception that having money is against good Christian values. But there’s a huge difference between hoarding wealth and saving money so you can attend to your needs. As part of God's creation, you must also take care of yourself and, more often than not, that requires some financial resources.
As April is Financial Literacy Month, this is a good time to encourage your teen to start thinking about. As long as it is not for greed, saving and investing money can be for a good cause. It allows you and any children to whom you teach this lesson to become better stewards of the Kingdom of God.
Talk to Your Teen About Investing for the Future
As with any life lesson, make it a point to set aside time and have a meaningful conversation with your growing children. Clarify any misconceptions or misunderstandings they might have, such as the goal of investing as they might regard as a selfish act. Here are some points you can touch on:
1. Saving for the future is an act that honors God
By saving your wealth, you value it as a gift given by God. Instead of spending it impulsively, you choose to put it aside because you understand the importance of safeguarding the Lord's blessings. This, in turn, will allow you to use your riches for good — to care for your family, to contribute to a righteous cause, or to give back to those who are in need. Even the Bible praises those who save for the future, as shown in Proverbs 21:20,
"The wise store up choice food and olive oil, but fools gulp theirs down."
2. Debt is a form of bondage
Debt brings about a relational change. The lender becomes a master, while the borrower, his slave. Thus, it is seen as bondage. That being said, debt can very quickly become a problem. According to Matthew 6:24,
"No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money."
While debt isn't inherently wrong, it can distract from what's truly important. People who are deep in debt sometimes turn to desperate measures and even blame God for the consequences of their actions. That's why the accumulation of debt should be avoided, and putting your earnings into investments is one way to do this. But in the event that you need to repay dues, it should be done as soon as possible.
3. Don't invest for the wrong reasons
It's possible to want to accumulate wealth for the wrong reasons. And by doing this, you are straying from the right path. Investing for the sake of greed or pride will only ever lead to bad things. Heed 1 Timothy 6:9, which says that,
"Those who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge people into ruin and destruction."
Gaining riches is and never should be a reason to turn away from God. It should be the opposite: Acquiring such blessings should enhance your appreciation of Him.
Guide Them Through Their Investments
Now that you've explained the spiritual aspect to your teen, you should be ready to delve into the more technical financial details. Here are some options that can jumpstart your teen's investments:
1. Checking Account
Opening a checking account is the first step to getting your teen comfortable with handling their finances. It's much more sophisticated than a piggy bank, although that could be a good start for younger children. With a checking account, they have easier access to their money for convenience. However, make sure to highlight the responsibility that comes with this accessibility. Give instances where it's best to use this account, such as for food and other essentials, and situations where they should control their spending.
2. High-Yield Savings Account
A savings account is not as accessible as the former option, but they're for the purpose of saving and earning interest. A high-yield one means the account earns more interest over time provided that it remains mostly untouched. This is a great tool to explain how investments work. It can also encourage teenagers to curb their spending and leave their money to grow in the bank.
3. Brokerage Account
This particular account is for when your teen is ready to start investing with more serious financial goals. A brokerage account is just like a checking account in that it holds your cash. However, instead of using it to buy food or other items, you use it to buy financial products that can help grow your finances. These include stocks, bonds, mutual funds, and ETFs. Just note that most brokerages won't let minors open an account on their own, so you might have to help them by opening a custodial brokerage account. Once the brokerage account is open, you can research different investment opportunities with your teen.
4. Roth IRA
This type of account is for securing your teen's retirement. While that might seem too early at their age, it wouldn't hurt to be prepared. A Roth IRA is a retirement savings account where one can contribute post-tax dollars. It offers tax-free earnings and tax-free distributions, allowing your money to accumulate considerably over time. Setting this up early will help your teen's financial security — a blessing that can remove any obstacles that prevent them from fulfilling their life's purpose.
It would be prudent to look into each of these accounts before choosing what to go with. And keep in mind Proverbs 21:5, which says that,
"The plans of the diligent lead to profit as surely as haste leads to poverty."
Plan carefully and meticulously, because this is for the future of your child. And once you've set everything up, keep an eye on your teen's decisions. Be there to provide guidance whenever they need it but make sure they also understand the importance of making their own financial decisions. More importantly, these decisions should be aligned with their Christian values. Because, as with all actions, faith should be their guide.
Teresa Arnold is a freelance financial planner who is dedicated to making life easier for her clients. She extends this to hundreds of strangers around the world through her writing, as she is passionate about boosting global financial literacy. When she's not working on a new article, you'll find her jogging in the park with her German Shepherd, Willie.