Spending or Investing?

I wonder if you’ve ever thought about teaching your child the important differences between spending and investing. It has recently come to my attention that an understanding of this basic concept could

revolutionize most of our lives – and if understood early in life could affect the impact of the remainder of our days.

Spending and investing are two very different ways of using our resources. We usually think of spending or investing money, but it can also refer to our time, our talents, and other resources (such as possessions and friendships).

Spending is using today’s resources to meet today’s needs or wants. Investing is using resources today in a way that gives them more potential buying power in the future. Both should be a part of everyday life.

I’ve often taught the importance of playing games and the skills and attitudes that can be taught in that informal setting. A familiar game can be adapted slightly to teach about investing as well. Yahtze™ is fun and builds math skills in recognizing dice patterns and adding the score; it can also teach investing. The game allows three rolls to attempt to make the goal; suppose for a moment that you roll your desired goal on the first roll. What do you do with the extra two rolls? Bank them! Each player will need an extra sheet of paper to keep track of his bank account. Of course, at first it is empty, but each time he does not use a roll, he records it in his daily ledger. A simple tally system will work. Then, when he does not make a goal in the normal three rolls, he can take (withdraw) rolls from his bank account. At any time any player may say, that is enough (attempted rolls toward a goal) and accept what he has so he can bank more rolls. This is a small step toward learning about investing.

A further step would be to teach the practice of spend, tithe, save, invest using any gifts or allowance the learner receives.

In a recent sermon, my pastor said, “The difference between a fool and a wise man is seen in how they spend their resources.” Let’s raise a wise generation!