The ABCs of Money: Pause for a Cause

Editor's note: This is the fifth in a series of six columns on how parents can help their kids get smart about money.

Children are born givers. I will never forget the time my husband, Michael, and I were fretting about paying the mortgage and my youngest, Amanda, piped up that she would pay the bill with the money she had in her piggy bank. In her mind, it was just that simple: We needed the money and she had the money. Never mind the fact that all she had was about $10 in change.

What she taught me in that generous moment was that she would give us all she had to help solve our problem. And that is what kids do. They give. It is a natural instinct. So teaching our kids the importance of donating is different from teaching them about the other money choices (save, spend or invest), because our kids come armed with the desire to give. All we have to do is provide them with opportunities to exercise that instinct.

Watching you give your own money or time and talent to a cause is a great start, but it's not enough. To teach children the power of putting the "do" in donate you need to provide them with opportunities to do good themselves.

A Presidential Challenge

President George W. Bush presented our children with a giving opportunity in 2001 when he asked America's children to earn and donate $1 to help the children of Afghanistan. Children did so in a most amazing way. According to the American Red Cross, they donated nearly $12 million. Those dollars have bought school supplies, food and medicine, and have rebuilt schools for the Afghan children. All courtesy of our kids.

This weekend, give your child a "presidential challenge" of your own. Give $1 to your child (or more, if your child is older, but keep the amount within your usual giving level). Explain to him that he has one week to find a charity or cause that he would like to benefit from that money. If he is looking into a large, national charity, help him check out the charity at www.give.org (the Better Business Bureau of charities) before making a final decision.

At the end of the week, set up a family meeting to talk about the cause he chose. And promise to match his donation if he can convince you to help based on his reasoning for choosing that charity.

Finding a Cause

Start the process of choosing a charity by initiating a simple conversation about what your child loves - animals, sports, playgrounds, reading. Show him how all of his interests present an opportunity to donate.