For kids, learning the basic fundamentals of money is difficult, especially growing up in a touchless world where they see that just tapping a card to a machine produces goods and services. You don’t want to fail your kids, and certainly you don’t want them to always be dependent on you. So how do you teach them to care about money? You give it meaning…
Imagine what it would look like if your children didn’t go into the store and want every item in it. What if they told you they were saving up for something special, instead? Or perhaps, that someone else might need that toy more than them? That would be a proud parent moment that you would cherish for years.
In my free eBook, I give a guide for teaching your kids money-wise behaviors and I have written a bit about it in a blog post HERE.
In these resources I guide you of the importance of providing paid chores for your children, as outlined in academic research.
When your children get paid from these chores, the money should go into three money jars or “accounts”. One jar for purchases now, one for soon, and one for later money.
However, it can be a great practice for the third jar of money to be a part of a “tithing” teaching moment, or money that should be set aside for others in need. It is this third money jar that I am going to focus on and explain a great way to get your children to understand and be excited about giving to a charitable cause.
A great way to start is to talk about those in need. Make your child aware of the different causes that are out there. This year, 2020, is a great time to start. Let them know that you AND your child are going to help and make the decision together. Allow your child to ultimately pick the charity that the donations will go to. This will really help your child feel involved, in control, and feel pride in the donations given.
Next, consider setting up a donor-advised fund to have the funds deposited into. A donor-advised fund is a private fund administered by a third party and created for the purpose of managing charitable donations on behalf of an organization, family, or individual. Basically, it accomplishes all of the following:
· Make contributions to a single or multiple 501(c)3 charities within a single account. Many local charities can be found within the donor-advised funds, as well.
· Set up multiple account holders on an account, or in the case of a minor, the contribution can be made in acknowledgment of the minor child
· Receive an immediate charitable tax deduction upon the contribution
· Choose when the fund distributes to each charity; ie. when the charity is really in need of immediate funding
· Funds can be invested and grow overtime to a distribute an even larger some of cash. This can offer a valuable investing lesson to your child. They can really get excited about watching their donation potentially grow even bigger.
By having your child set aside chore money for others in need, it can help teach important budgeting and philanthropic money principles that they can use later in life. Donor-advised funds are a great vehicle for getting the whole family involved and motivated behind a purpose and inspire your child about giving for the future. In a year with many in need, it offers the opportunity to see their money in immediate action.
You too can have that proud parent moment and help others who need help through the process. Download your free guide to help teach your kids about money wise behaviors.
For more information and resources, visit the Lifepoint Blog.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
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