Over the years, Northwestern Mutual has conducted a number of studies on financial literacy. One of the key findings is that kids’ financial savvy and money habits don’t come from celebrities, friends, media or even teachers – it’s parents who have the most influence on the way children save and spend. But one financial area parents aren’t actively leading by example is in donations to charity, according to a survey released by the Northwestern Mutual Foundation’s financial literacy Web site, Themint.org.
When asked, “Do you know what organizations or causes your family donates money or time to?” most children 17 and younger said either, “I’m not aware of their giving at all” or “I know my parents give back, but I’m not sure how or to whom.” Only 23 percent said, “My parents talk about the organizations and causes they support.”
If parents don’t discuss their charitable intentions with their children, a valuable learning opportunity is lost. The same is true for professional advisors and working with clients. Planning how to give is just as important as the planning that goes into saving, spending and investing.
Tips for modeling your charitable outlook
This is a perfect time for you as a parent and Professional Advisor to demonstrate how you’re modeling and explaining charitable giving to your kids as well as your clients.
Engaging children and clients in financial matters doesn’t have to be complicated; there are many simple things you can do. For example, you might consider the following. Also describe to your clients how you are doing this with your family. Stories are very powerful teaching tools.
* Involve kids in conversations about your charitable giving. Develop giving goals as a family. Choose a charity to financially support together. Model – and explain – how the family will budget to meet its giving goal.
* Show them that money isn’t just for spending. Help kids start a four-bank system with compartments for saving, spending, investing and giving.
* Encourage children to develop realistic personal giving goals to support a cause in which they believe.
* Add fun into the process. For example, if your family decides to use its giving budget to buy toys for a program that distributes presents to disadvantaged children during the holidays, involve your children in the shopping for those toys.
* Explain to teens the concept of tax benefits related to charitable contributions to organizations such as The Salvation Army or your Church.
People are taught about the importance of giving. I believe that is one of the most lasting legacies you can provide.If you are now out of excuses not to get your estate planning in place or up to date, contact www.RossEstatePlanning.com