How To Manage Money With Your Children

Teaching generosity is normally a process of reinforcing positive behaviors. Many children show up with a basically openhanded attitude. It is up to parents to create the right environment and encourage the right behaviors. The goal is to create a balanced person who has the attitude and skills to be discerningly generous.

The first step is a parent’s most important and most difficult step: modeling the behavior. If we demonstrate a “what’s mine is mine, he who dies with the most toys wins, tough luck, buddy” attitude it is not likely that our kids will grow up a cheerful giver. Developing and modeling these habits is half the battle. The next piece is to help children understand their relative wealth. Odds are good that if you are reading this post you are in the top 10% on the wealth scale worldwide. Expressing a proper contentment with your current circumstances will help. There are certainly a number of people around that are wealthier have more cool stuff than you, but there are many more folks (probably just out of sight) that are in much tougher circumstances. Third: kids need to feel secure in their circumstances. If you are perpetually expressing fear and discontent your kids will internalize that emotion. If they are fearful about meals and having a roof over their head they will have trouble learning generosity. Your next action is involving them in giving in a way they can understand. Putting money in the offering tray on Sunday morning or writing a check to the United Way is too abstract for kids. Collecting and delivering cans to the local food bank works better. Helping them pick out clothes and toys to give to somebody in need will resonate with a child.

All the standard tools in the parent toolbox can work in teaching generosity. Reinforce generosity when you see it with praise and even a reward. When your kids find themselves on the receiving end of stinginess ask them how it makes them feel. This is one of those areas where negative reinforcement is not very effective. You want kids that are cheerfully generous, not fearfully generous. Look for ways to praise the right behaviors, and use the unpleasant moments as an opportunity to teach.

As kids grow you can expand their horizons and work on more abstract ways. As they learn about people who live in less affluent circumstances ask your kids how they might help. Teens should be brought into the family giving decision process. Ask them about organizations or needs they are aware of and want to help. Keep alert for learning opportunities and places where your kids have an interest. An example: if you have a kid that loves animals you can talk about the impact of domesticated animals in third world countries. Heifer International ( is an organization that provides farm animals to people in very poor areas. A flock of geese can make a big difference in a family’s life (and survival) and can be had for just $20. If you are active in a church it can be a tremendous resource for reaching out. Just ask around.

Keep up the teaching and encourage your responsible teens to be givers. Listen when they talk about a need they have witnessed and ask, “What can you do about it?” Every once in a while you hear a news story about a kid that has organized a tremendous charity effort. Wonder were those kids come from? It comes from a parent asking, “What can you do about it” and then encouraging the action.

If you model generosity and encourage the same in your children you have a good chance of giving your kids a generous heart and a better relationship with money.

About the author

Jim Heitman, CFP®

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