Money Part I
I enjoy reading your column in the 5 Towns Jewish Times. My question is regarding my eight-year-old son and his interest in money. I am thinking about giving him an allowance or some way to earn money for good behavior but don't want to get sucked into a scenario where I’m asked can I have $ for everything thing he does and of course he should be helpful without a reward. What is a good system to integrate both good behavior and an allowance or should they be separate? And if so what are the guidelines for an allowance?
Miriam -Far Rockaway
Miriam, this is a question that has many different aspects. Let’s break it down into four main categories.
If you give your children a solid financial education when they’re younger, it’ll make their future a lot brighter. There are many ways to do this. The simple approach is to involve them in discussions around the home. If you’re buying a new phone, you can tell your kids, “I really wanted to get the iPhone 11 super plus with 18tb of data, but it’s not worth spending money on that since I don’t really need it. I’ll stick with the iPhone 6 plus 128.”
Obviously, this won’t work if your children constantly see you wasting money on useless or extravagant items. Here’s an example: There are many people who would be very hesitant to spend $3500 on a leather couch. However, these same people might quickly spend $4,000 upgrading to leather seats in their car. If you want your children to be financially smart, you need to be as well!
Another issue that many parents face is the “Amazon” challenge. Here’s how it goes. Your child watches you make a purchase using Amazon Prime, and it arrives a day or two later. They didn’t see you pay anything, and therefore they find it hard to understand why you can’t get them what they want, just as easily and quickly. This unfortunately encourages instant gratification, as our children take note of us acquiring items without putting in much effort or time. It might be beneficial for us to take a moment to verbalize our thoughts in front of our children before clicking the “Add to Cart” button. One suggestion might be to explain that it is cheaper online than in the store (if in fact it is), or that the item isn’t sold locally, etc. In most cases, it is easier to do our shopping online, but let’s be careful to express our purchasing considerations, as if we were shopping with our children in an actual store.
There are, however, many opportunities we can utilize to show our children where it is important and worthwhile to spend our money. Spending extra on special foods for Shabbos or Yom Tov teaches your children a great lesson! You can also donate money to Tzedaka, and let them help make the decision as to which organization you’ll help out.
The value of money can be imparted whether one is financially stable or not. For example, when you’re grocery shopping, you can bring your son along and show him how to look for sales (such as choosing the cereal boxes that are on sale for the week). Shopping can become a fun experience for him, and a great lesson as well. “Can you get me a ½ gallon of milk, a dozen eggs, and 6 green peppers for less than $10.00?” Alternatively, when choosing an item, you can casually remark, “Let’s get this brand. It’s a much better value for the money and similar to the more expensive brand.”
There is another great wonderful way to teach children the value of money, and it’s a great disciplinary tool as well. If your child damages something due to irresponsibility, or even because he’s upset, you can make him pay. Here’s an example. “You were upset and broke the vase. That vase cost $59.99 and I need you to pay for it.”
If your son doesn’t actually have any money, you can tell him, “I’ll take the money out of your bank account to pay for it.” Keep in mind, he doesn’t actually need a bank account for this to work, although it’s certainly better if he does. Obviously, this only applies to children who are old enough to understand the concept.
You are now accomplishing two things at once. First of all, he’s learning that actions have an immediate consequence. Secondly, you are teaching him that everything has a value.
The next item on our list, is responsibility. In order to instill in your children a sense of responsibility regarding work, you need to work hard as well. You don’t want to your kids to think you’re a hypocrite. We live in a time where entitlement is the norm. Adults seem to feel that they should receive things without putting in appropriate work, and this feeling most certainly trickles down to our children.
I was recently at a store, and there was a man complaining that he can’t feed his kids since everything is so expensive. He had an EBT card of some sort and he said it barely covered his needs. I asked him what he did for a living, and he said he had no job. I told him that I could get him a job as a manager of a store paying about $48,000 a year, and he told me, “It’s not for me.” I asked him what he was looking for and he said a high paying job that doesn’t require a lot of work. I suggested he go into Chinuch.
I wish I could say I was shocked. I wasn’t. There is definitely a mindset out there that believes every person should be compensated simply for being alive. In my humble opinion, that’s ridiculous. We need to teach our children the value of hard work, and the satisfaction that it brings.
If your son asks you to buy him an expensive toy, help him make lemonade and cookies, and let him set up shop on a side road. The interesting thing is, after he makes the money, he might not even want to spend it! Working hard for money actually helps children become more financially responsible. There are many other ways for children to experience working hard and putting in effort to earn money. For example, offering to shovel snow, babysitting, getting a job in the summer, etc.
There are two things that you need to be careful about when he starts trying to earn money.
Have a good Shabbos
11/24/2016 08:58:47 pm
Your Amazon part was spot on. Actually this whole article is. Wonderful as always.
11/24/2016 09:02:42 pm
I love the car analogy! My father used to say the same thing. When we take out a loan, we forget the value of money. Great writing!
11/24/2016 09:03:45 pm
I love buying Shabbos food and paying extra. I tell my kids "Shabbos food is worth it!" Thank you for this crucial parenting campaign.
11/24/2016 09:04:39 pm
You know, this e-mail is missing one point. What of the parents have NO money. That changes everything! I really enjoy reading these by the way.
11/24/2016 09:14:32 pm
Rachel, thanks for commenting. This is actually a separate article. I have been working on it for a while.
11/24/2016 09:05:34 pm
There's a great Dvar Torah coming up for this soon. Yaakov didn't even leave behind the Pachim Ketanim! Every cent is important.
11/24/2016 09:15:33 pm
Yechiel - Great Point! I've thought about including a Dvar Torah in each article, but decided against it. You can post one each week instead!
11/24/2016 09:12:06 pm
I agree with you on so many of these points. No more than what you wrote about making the kids work. That's the best way to ingrain within them a sense of responsibility and money smarts.
11/24/2016 09:13:26 pm
Great Line about Chinuch. Kind of the opposite though. That mentality you spoke about is permeating the world. It's sick. These emails are really quite amazing. Yasher Koach!
11/24/2016 09:17:54 pm
I wasn't really joking. Every great Mechanech or Mechaneches loves what they do. It's not hard work when it's so incredible. The reward we receive (albeit not in money) is priceless.
11/24/2016 09:47:32 pm
I have so many questions on this article, but I'll wait until next weeks. This much I will say. 1) you are 100% correct in what you wrote. 2) spouses need to work together to teach their children money smarts.
11/24/2016 09:54:09 pm
Thanks for being patient. Incidentally, spouses should work together in most areas of Chinuch..
11/24/2016 09:48:16 pm
The iPhone11 super plus. Classic. I love how you blend humor into these emails. I greatly enjoy!
11/24/2016 09:50:30 pm
What a great idea about the bank account! I can't wait to try this. Have a good Shabbis!
11/24/2016 09:51:35 pm
My 7 year old son is actually a miser. He collects money from birthday presents, tooth fairies and more, and counts it every day! I'm a bit worried.
11/24/2016 10:01:59 pm
How are there so many comments? I just got this 5 minutes ago. Fantastic as always.
11/25/2016 06:51:36 am
Money Smarts is important for every child to learn. I wonder if it's in fact nature that gives children a desire to earn or save money.
11/25/2016 06:54:01 am
My parents did something similar. They told me that if ok wanted to spend money, I had to earn it first. Any money I earned 10% went to maaser, and then the split the rest. Half to spend and half to save.
11/25/2016 07:04:38 am
There are a lot of interesting thoughts on this email. This was my first week signed up, and it actually went to Spam. In any case, it seems to me that as you pointed out, leading by example is the most important of everything.
11/25/2016 08:10:12 am
Maybe the rich get richer because they have the money to invest. :-)
11/25/2016 09:13:04 am
I'm sorry it went to spam. That happens with mass emails, you need to allow emails from "Rebbe@Yidparenting.com". You are partially correct. The wealthier people tend to raise their children to be more financially responsible, but that doesn't mean average people cannot do the same. I know of some needy families that have done a great job teaching their children to be financially responsible.
11/25/2016 07:22:51 am
I'm not sure why you're limiting these articles to religious parents. I've been reading through many of them and it seems that they pertain to all parents throughout the world.
11/25/2016 09:16:47 am
Thank You. Many of these articles are appropriate for all parents. However quite few of them discuss parenting from a religious point. An example would be Davening. In a few weeks, we're going to try and figure out the best way to teach your children the importance of saying the words inside a Siddur. I'm pretty sure that non-religious people would not appreciate or understand what we're talking about.
11/25/2016 07:58:50 am
Bank Account line is amazing! I actually opened a small account for my kids years ago, and I will definitely try this. When my son is in a destructive streak, it might chill him out if he's using his own money. Thanks!
11/25/2016 09:47:35 am
There is another element to being money savvy, and it's called being honest. People that are honest have an easier time since they appreciate the value of everything.
11/25/2016 11:20:05 am
What a great article. I'm quite curious about next week...in haven't decided what to do about allowance.
11/25/2016 11:27:33 am
Something else that might be worth writing in next week's article, is if children should be allowed to bring money to Yeshiva. It's a big point of contention between parents and children. Thank you for your hard work.
11/25/2016 11:29:00 am
I'm inspired and take lessons from each and every one of your posts. Thanks for sharing!
11/25/2016 12:31:41 pm
Another informative email. I've always found it interesting that parents waste money on frivolous things, and are surprised when their children don't appreciate the value of money.
11/25/2016 02:09:31 pm
I hope you don't think it's a good idea for kids to receive an allowance. Looking forward.
11/25/2016 02:39:30 pm
I used to be fine with my kids shoveling snow for people. Nowadays, I would be a lot more hesitant.
11/26/2016 10:08:11 pm
Rabbi Ross. Thank you for this important article. Part of the reason that there are so many Yidden suffering financially, is that our children are not being taught how to deal with money. There are obviously other factors, tuition, Yom Tov costs and more. However, reading this article, can help many families.
11/26/2016 10:09:02 pm
Funny. You are so right about the leather paragraph. My brother wouldn't spend $500 buying a couch in his house, but leather seats were a must have!
11/26/2016 10:10:35 pm
Great Stuff! Financial Stability is key - especially if you live in an area where people think they must keep up with the Jonses.
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Rabbi Yitzie Ross is a Rebbe and has been working with parents and kids for many years. You can read more about him in the "about" section.