Ask Mesila: Teach your children how to handle money
Q: My 10-year-old daughter recently earned about $200 by helping at a day camp. To her, it seems like a fortune. She now wishes to use that money to buy herself extra junk food and the things she claims all of her friends have. It kills me to see her squandering her money, but she says that she is the one who earned it so she has the right to decide how to spend it. My wife and I are unsure how to respond. What do you think?
A: The Midrash says that when Hashem told Moshe to collect the machatzist hashekel, He showed him a matbei’ah, a fiery coin. The matbei’ah shel eish can perhaps be understood as a metaphor for money in general: Both fire and money are necessary for survival, but both can be enormously destructive when uncontrolled. Just as young children should not be allowed to play with fire, they should not be given free rein in handling money. Money is not a toy. It is a potent, intoxicating and dangerous substance, and its use needs to be controlled.
According to Jewish law, a girl under 12, or a boy under 13, cannot take possession of any object or money.
The Torah view is that it is not good for children to be independently wealthy. No matter how bright they are, they do not possess the emotional maturity to make the correct decisions with money. Therefore, they should not be allowed the heady feeling of financial autonomy, nor should they be burdened with the weighty responsibility of managing their own finances.
If your 10-year-old has earned money, it technically belongs to you. To your daughter, however, your taking control of her hard-earned wages may seem utterly unfair, so you will have to be very careful to present it to her in a way that she can swallow.
Instead of exercising your “legal right” to your daughter’s money by appropriating it, you should express to her, gently and lovingly, that the money must be spent at your discretion. At the same time, communicate to her that you have a great deal of respect for her and her efforts and that it is your parental duty to help her use the money she earned in the way that will be the most rewarding and productive. Your daughter’s newfound wealth puts you in the position to teach her crucial values and attitudes toward money.
Teach her about charity. Teach her that money is important — not as an end, but as a means. Teach her the value of saving money, the value of planning how to use money and the value of establishing priorities when spending money. Teach her that having money is a responsibility and that having money does not make anyone a better person, and that money should not be the topic of idle conversation.
You cannot impart these attitudes and values to your daughter in a vacuum. But you can teach her these by involving her in the decisions that will be made with regard to her money. Suggest to her positive ways she can use it, and give her the opportunity to offer her own ideas. Explain to her the various options for safeguarding money — bank accounts or the old-fashioned coin bank — and decide with her how much should be put aside for savings and where the money will be kept.
Ideally, the time to discuss with children how to use their money is before they start earning it. This way, parents can explain ahead of time what will be done with the money, before any misunderstandings arise.
Mesila believes that teaching good financial habits should be part of the education we give our children. By demonstrating to our children the importance of handling money properly, we give them the foundation for a lifetime of financial responsibility and stability.
This new column is penned by Mesila financial planning and counseling experts, mesila.org. Email questions to email@example.com.