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Teaching Your Kids Money Management

This article is one of a total package of articles for teaching your kids how to manage their money. My preceding articles, in order of implementation, are: Start As Early As Possible; Change the Way They View Money; Get Rid of Allowances; How Much is Enough; Establish a Spending Plan; Let Them Manage It; You Must be Able to Say, “No”; and Savings Will Save Them from Disaster. Each of these topics is covered more thoroughly in my other articles. The titles following this article are intended to show you what to do next and complete the learning.

Giving it Away Will Help Them Grow: We know our children’s worth is not related to what they have or don’t have. It is about who they are. As they change their focus from a self-focused “it’s all about me” attitude to the world outside themselves and a view of “even I can make a difference in the world around me” they will have an increased self confidence and improved self esteem. If your children can grasp these views by using their abilities and income to contribute to others’ well being they will begin to feel better about world around them.

Charitable giving should be incorporated into your child’s spending plan at every age. Expand their horizons by involving them in charitable giving. As they give to a greater cause they will become invested and as a result more interested in that charity. The things we invest in tend to grab our interest and keep it.

One way to do this is to look for a charity that helps children of their same age group; someone they can relate to and feel good about helping. There are many good choices both locally and internationally. If possible make it about more than just giving money; the impact will be far greater if it is the use of their time and abilities coupled with the monetary donation. Most communities have outreach services to the homeless, those less fortunate, and the infirmed. This will teach them how to give not just from the wallet, but from the heart.

With most children once they see how well they have it in comparison to others, not only will they want to help out financially but will also desire to help out with their time and energy.

Have a category for charitable giving as part of their spending plan. Most families use the ten percent rule. That is, have them set aside ten percent of all sources of income for charitable giving. This includes gifts they may receive as birthday or for Christmas. By doing this it helps them to recognize many blessings in their life and the benefit of sharing their good fortune with others.

If you have a special charity you support, let them pitch in. We supported a world vision child in China for many years. By encouraging our son to be involved it made it more real. As we received correspondence from Yang we enjoyed learning of his progress in school and of his personal successes. It opened up doors of communication with our son that may otherwise have never taken place. It is important for children to understand that life is bigger than they are and we have a responsibility to others.

By giving some of their time, energy, and money to help others your children will learn an invaluable life lesson: There are circumstances in the world that are bigger than they and many people that are far less fortunate than we. By helping others they can be a part of solving some of these problems and helping to make a real difference in another person’s life.