An important part of money management is giving. As you might remember from posts past, giving is the key to a happy and healthy life.

In order for giving to produce greater happiness and health, the act of giving needs to be meaningful and palpable. Consider these tips to make it meaningful for your child:

1. select an age appropriate method of giving
2. encourage your child’s participation in all parts of the process
3. discuss the “sacrifice” (time, money, mental energy)
4. focus on the recipient
5. consider the circle for giving (family is innermost, neighbors and friends maybe next outer ring, wider community next ring, etc). Each time you move to an outer ring, the act of giving feels less and less tangible.

Toddlers Guide to Giving

Toddlers are just beginning to look outside of themselves and widen their awareness.

My own toddler joyfully scribbles on a piece of paper and hands it to me. This is her first encounter with giving. My response to this gift has the potential to set the tone for an enduring love of giving.

I can optimize this experience by introducing the perspective of the recipient (she isn’t aware of this perspective yet) – “Oh, you made this for me! Were you thinking of me and how much I love colors? Thank you. That makes me feel so happy.”

Because toddlers are just widening their awareness, giving something handmade to someone who is part of the family or immediate community (the innermost circle) is most meaningful.

Preschoolers Guide to Giving

Preschoolers enjoy helping others, especially animals, friends, and family. Making a homemade bird feeder (pinecone, peanut butter, birdseed) is a fun way to help your child to think outside of himself.  Similarly, our daughter loves to see how happy she makes our dog by brushing him.

It can be an exciting outing to take your preschooler to a store to choose a gift for a friend or loved one.  Another approach is to choose some books or toys from the family collection to give away.

Elementary Child’s Guide to Giving

The elementary child is cognizant of people farther out in the circle.

The elementary aged child can benefit from helping another child in need, even if he is a stranger. It feels particularly significant if he uses a portion of his own money to put toward the gift or donation.

The elementary aged child is able to prioritize how he wants to give. Allow him to choose whether he wants to give to other children in need in this country, help a war refugee in another country, tithe to his religious organization, give money toward the welfare of animals or the health of our planet. The options are endless. Your child can start voicing and building his own values through this process.

Through the act of giving, children will learn more about the art of receiving. The ability to give and to receive gracefully rebound off of one another.

The Art of Receiving

To all of the parents who talk at length about wanting their children to value giving over receiving, I know. I get it. But, your child does need to learn how to receive. Teach your child how to be a grateful recipient of gifts.

Talk to him about how good it feels when someone else thinks of him and wants to make him happy. Shed light on the giver’s perspective – “Isn’t this so thoughtful. Sue thought about you and went to the store to pick this out just for you.”

This is how the ability to give and to receive gracefully rebound off of one another.

And please, please teach the importance of a thank you note!!

Related posts:

• Top Rated Gift for Every Child
• Have a Thankful Kid by Thursday

At first, understanding how we should allocate funds was a dilemma. I knew I did not want money to be a reward for chores. Not at this stage of the game.

Household chores help kids to develop a work ethic. An allowance helps kids develop money management skills. These are two critical yet separate lessons that should not be muddied by one another. Money and chores should not be interdependent at this stage.

And frankly, I do not like the idea of paying my kids to do the very tasks that I do not get paid to do (taking out the garbage, making beds, folding laundry, dishes, etc).

Our kids get money each week simply because they are a part of the family. They also need to help around the house simply because they are a part of the family.

Giving our kids money has helped achieve many goals:

1. Establish priorities for how to spend money.
2. Introduce the abstract idea of a necessity versus a desire (or need vs. want).
3. Introduce our practice to save 10%, give 10%, and spend 80%.
4. Discuss the less tangible concepts of giving and saving.
5. Consider how we will give the money (donations, hand-outs to homeless people, gifts for less fortunate kids, etc).
6. Check out the seven points from Teaching Kids About Money.

Money management is learned through trial and error. Simply handing out money is not enough. Money without restrictions leaves kids with a sense that there is cash to burn. This notion of disposable income is hard to outgrow. Kids need to be taught about money. Without this, the odds are that  they will be living paycheck to paycheck (i.e., in your house) long into their adult lives.

* Since some will be curious – our 5 year old receives $2 and our 2 year old receives $1. We give them money at our weekly family meetings.

Posts in this series:

• Top Rated Gift for Every Child
• Teaching Kids About Money
• The Do-Gooder’s Guide to Raising Generous Kids

Useful links:

• What Kids Need to Know About Money – MSN Money
• 8 Behaviors of the Financially Intelligent Parent
• The Financially Intelligent Parent (book link at Amazon)

Even if you perceive your own relationship with money to be healthy, it is a big responsibility to teach your child sound financial values. Even harder if you recognize that your own relationship with money is out of whack.

This series will help you to guide your child down the road toward a healthy financial outlook that is rich will gratitude and generosity. Subscribe here to get started.

The foundation to a healthy relationship with money is achieved with some thoughtful language and modeling. Below are seven good points to keep in mind:

1. When it comes to teaching kids about money, sooner is better.
2. Teach your kids that people can spend, save, and give away their money.
3. Teach them that money achieves necessities (food and shelter) and goals (traveling, philanthropy, etc).
4. Introduce the idea that people have different priorities for their money. Make a point to discuss your priorities with your child. Help them to create their own priorities.
5. Be mindful of your word choices. Rather than saying, “I have to go to work now.” Say, “I get to go to work now. I work so that we can have money to buy food or visit grandma and grandpa or so that you can go to school.”
6. Homeless people or those less fortunate will inevitably be a topic of concern for your child. How will you address this?
7. Give your child money so he can gain experience with it. I’ll talk much more about how to do this in an upcoming post. But just a word of warning – when you give your child the opportunity to have some money to spend, remember that there will be “mistakes”. Better to experience mistakes on a small scale when he’s young.  This way he can learn the importance of making good choices with money before the stakes go up.

Future posts will look at the art of giving and receiving as well as the importance of allowance for kids. Stay tuned, because you might be surprised by the post on allowances. If you’d like to follow this series, subscribe here and the posts will arrive in your email inbox.

Related post:

• Top Rated Gift for Every Child
• Raising a Financially Intelligent Kid
• The Do-Gooder’s Guide to Raising Generous Kids