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Spend. Save. Tzedakah.

Spend. Save. Tzedakah.

May 05, 2023

How can you teach kids the value of money when they have no consistent income coming in? For young children who haven’t yet had to work to earn the things they have, some fundamental concepts of money may feel foreign. However, they certainly don’t have to.

Now, more than ever, it has become increasingly important to know and understand the value of money and financial principles. The earlier you start, the better.

Children may not be receiving a biweekly check, but it is possible that they receive money as gifts for birthdays, holidays, and other celebrations. This is a good place to start.

By teaching children to act responsibly with the money they receive, even if it’s inconsistent, the more likely they are to replicate these good habits when they have a steady flow of money coming in.

A good way to begin teaching your kids about kosher money is by dividing the money they receive into three categories: spend, save, and Tzedakah. Each time your child receives money, you will both sit down and distribute they money amongst these categories.

For example, say your child receives $10 as a birthday gift. Maybe $1 is allocated to Tzedakah, $2 can be put towards savings, and the remaining $7 can then be spent on whatever they decide.

With this strategy, children have a tangible depiction of how much money they actually have, and helps to establish good money-making decisions early on.

On top of this, it teaches them to have accountability with their “spend” category, as they are the ones responsible for understanding what they can and cannot afford. The inevitable questions of “can I buy this Lego set or that doll?” that always arise in the toy section can be met with the following response: “you can absolutely use your spending money any way you’d like, as long as you have enough. I’d be happy to help you determine what you can and cannot afford at this time.” 

Children’s lives and understanding of the world primarily exist around what they can immediately see and what impacts them directly. Because of their limited experience and exposure to the world, they rarely are aware of or take into consideration the less fortunate or those with other needs. By instilling in them the habit of putting money towards tzedakah, our children will begin to learn and appreciate the practice and adopt the selfless mindset of helping the global community. 

These skills are important to learn young because they can be carried out as long as the person lives. As kids become older, their transition to a more robust financial strategy will be more seamless. It is at this point that they may start considering strategies that mirror those they practiced in their childhood. Certain practices like holistic financial planning, a values-based strategy that prioritizes your overall life vision and goals, and impact investing, a mission-driven process of aligning one’s values with one’s investment strategy, will allow them to continue the practices they grew up learning.

With a new year underway, now is a great time to re-evaluate the goals you’ve established for 2023 and consider adding “teaching financial literacy to my children” to your list. Apart from it providing your family with practical money-management skills to improve your life, it sets you up for better success with kosher money, showing the utmost respect and reverence to God.