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Raising a Rothschild

Shira Yehudit Djlilmand

Sefiras haOmer has settled in, and the counting process lends a purposeful tempo to the week. Small numbers give way to larger figures as our anticipation mounts. Yet the themes of counting, saving, and increasing value aren’t unique to sefirah; they’re the cornerstones of money management throughout the year. What’s the best way to convey these skills to our children?

Wednesday, April 27, 2011

rothschildWhen we walk our children to the chuppah, we pray that they will build a true Jewish home. And for that home to succeed, it has to be built not only on a sound Torah base, but also on a sound financial base. However, the sad fact is that many adults have never been taught even basic skills, such as how to manage a budget or balance a checkbook. Too often, a newly married couple is thrown unequipped into the financial maelstrom and gets severely battered.

There are organizations in the frum community that are working hard to educate people about finances. But if these skills can be taught earlier — before marriage — a lot of heartache can be saved. So how can we ensure that our kids get a sound grasp of money matters before we send them out into the world to fend for themselves?

Burning a Hole in Their Pocket

One way to teach kids about managing money is to give them some money of their own to manage. Allowances have always been a thorny issue. To give or not to give, how much, at what age; the questions are endless. Some people prefer not to give a regular allowance, but rather to dole out cash on occasion as the need — or want — arises. The problem is that it’s often difficult to distinguish between a desire and a real need, and it can get very hard to say no. Plus, this method does not teach kids how to be responsible with money. (It can also get very expensive!)

Most financial experts tend to be in favor of a regular allowance. Ezzie Goldish, a financial consultant in the New York area, maintains: “If a kid has a fixed amount every week, he can figure out what he can buy, and he knows that if he blows it, he’s stuck. That’s a valuable lesson for later on in life.”

Perhaps the thorniest question of all regarding pocket money is how much to give. Many of us are familiar with the standard whine: “But ALL my friends get a bigger allowance!” How to answer? Rena Abrams, a teacher with thirty years experience teaching elementary through high school, gave Family First her advice. “Too little can be dangerous,” she warns. “If a child is getting significantly less than his peers and he feels it, there is always the danger that it will lead to stealing from his peers or even from your own purse.

“But too much pocket money can also be risky as children have money to waste on unsuitable or questionable items, which ultimately doesn’t teach them anything about money management.” And if the family finances simply can’t handle paying out the kind of amount that your child’s friends are getting, then parents have to make the decision what’s appropriate for their family.

However, Ezzie Goldish insists that “It’s not the amount that’s important, but that it’s fixed and regular.” You cannot teach a kid good money management when he never knows how much money he will have to work with. 

Furthermore, it’s hard to know at what age to give pocket money. Many parents say that they hadn’t made hard-and-fast rules about a specific age to start giving pocket money, but rather started giving when they felt the child was ready. One mother simply explained, “I start giving when they start asking!”

That might not sound so well thought out, but, says Rena Abrams, it actually makes sense. For when a child starts to ask for an allowance is usually the time when they’re becoming aware of money and beginning to understand the concept. “Preschool children certainly don’t need pocket money, as they have little understanding of numbers at that age. First/second grade is the age when children first start working with money concepts in math, so that’s the natural time for them to ask for their own money.”

A lot depends on the personality of the child too; some young children can be very responsible with money while their older siblings are distinctly less so. Tikvah* knows all about that: “My eight-year-old son hoards his pocket money like it’s gold and won’t buy a thing with it, but his ten-year-old sister blows it all the day she gets it — and usually on junk and candy. Afterwards, when she has nothing left, she’s sorry. In fact, she’s even asked me to save her pocket money for her and not give it to her, even if she begs! But I won’t agree to that. The whole point of her having pocket money is that she has to learn what to do with it. I just hope she learns soon!”

How about making the kids earn their money? It seems most people think this is appropriate; a recent survey for Liberty’s Financial Young Investor Program shows that in the US, 75 percent of kids are expected to do chores to earn their allowance. The danger of tying the allowance to chores is, of course, that kids can then start to expect to get paid for everything they do around the house — something we certainly don’t want to encourage!

The danger can be avoided, however, suggests Rena, by setting firm rules. “You have to make things very clear. Tell them they’re not getting paid for every job, but that these are the chores that are expected of them to earn their allowance. Be very specific. But make sure to give yourself a loophole if you see it’s not working out, by warning them that you’ll be constantly reviewing the situation!”  

There’s another solution too, which some parents have utilized. Yocheved,* for example, helps her kids to help themselves; “If I see they really want something badly and it would take them forever to save up for it, then I’ll somehow manage to find them a job to do —something extra than regular daily chores. There’s never a shortage of things that need doing in the house!” 

 

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