June 13, 2022
How to teach your kids to be generous with money?
Do you ever wish you could help your kids or your grandkids be more generous with money? It is really important to Tim Goodwin, CFP and President of Goodwin Investment Advisory to teach his kids how to be smart with their money, which includes being generous. Tim and his wife, Maureen, set an example as well as foster a sense of generosity using a tool called the Greenlight app. This is not an ad for Greenlight, but they just love that Greenlight has three buckets for their kids to allocate their money. They pay their kids the amount of their age each week for doing chores around the house. This money automatically goes onto their greenlight card. They let their kids decide how much to put into the three buckets of spending, saving, and giving. All three of them decided to put 50% into spending, 25% into saving, and 25% into the giving bucket.
spend, save, give
It is a great tool because the girls can see how much they can spend, save, and give. They can choose to spend their spending bucket immediately or choose to let it build up to save for something bigger. That part is up to them. The saving bucket for each of his girls is going towards saving for a car. Even Tim’s 9-year-old is saving 25% of her nine dollars per week for a car. They all know that mom and dad will match their savings when it is time for them to purchase a car.
How do you teach your kids to be generous?
This one is a little bit trickier. Each of the girls has 25% going into their giving bucket each week they get to choose where they want to give. One of the things that Tim and Maureen do, is they have an annual tradition and around Christmas time we sit down as a family and we have an annual meeting that we call the “Goodwin Generosity Groove” that’s what they call it because their last name is Goodwin and it’s fun and a little bit nerdy, but they are going over a spreadsheet, so it makes sense! Tim and his family sit down in front of the TV and they pull up a spreadsheet with all the places they give to as a family. They have a conversation as a family about all the places that they give to and they assess whether each non-profit, or organization is doing a good job. They ask, “Should we give any of these non-profits a raise?” “Should we fire any of these organizations?” “Are there any other organizations that we should consider adding to this list?” In doing this they are creating a sense of intention about their giving and also holding the organizations they give their money to accountable to make sure they are doing what they say they are going to do. It would be good to determine your family’s personal criteria that you would like met by the organization you decide to give your money to. This could be communication, how they spend their resources, who they help, etc.
Talking about family giving generally brings up the conversation about each of their children’s personal giving and they can sit down with them and pull up their Greenlight app and see exactly how much is in their giving. Then they can send their money to an organization or cause of their choice. One cool thing about Greenlight is that if you pull up a nonprofit to give to and go to pay with your child’s greenlight debit card, it automatically knows it’s a non-profit and then funds it directly from your child’s giving account.
3 things generosity teaches your kids
- You will be passing down the legacy of generosity as grandparents and as parents, showing your children that generosity is important for you and your family. They see you’re passing down a legacy and that’s super important.
- You find out what breaks your kids’ or your grandkids’ hearts because that’s where a lot of times our giving is going to causes that really pull at our heart strings. This helps you learn about what problems they want to solve in the world. It is a way they can connect their passions to a need in the world that they can actually be a part of helping and participating in, in a tangible way. One of Tim’s daughters had heard that Google was matching any donations going to Ukraine so with the war going on with Russia she wanted to be able to make her money count as double, so they found a way to get her giving matched.
- Making a difference for others teaches your kids and your grandkids that generosity can bring them joy as well. When you are giving to others it has been proven that it makes you happier and healthier than those that don’t give and serve other people.