Don't bank on
others to teach
your child how to
manage money;
it's an evolving
process best
started early, and
at home.

GAIL LIPSITZ AND RHODA POSNER

SPECIAL TO THE JEWISH NEWS

LTJ

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Turnin
Dollars
Into Sense

Transmitting Jewish Values,"
psychologist and UJA/Federation
leader David Arnow observes that
many families "tend to relate to
issues involving money with dis-
comfort and outright avoidance ...
As a result, many parents miss
the opportunity of making the
home a place where children can
learn from their example."
Money is a wonderful vehicle
for parents to teach their children
values and prepare them for adult

trwip

omespun wisdom
about money
from a collection
of Yiddish prov-
erbs teaches that
"it's not that mon-
, ey makes every-
4.4Ahing good; it's
that no money makes everything
bad." And, "It is easier to make
money than to keep it."
Like it or not, we cannot be in-
different to and unaffected by
money. "Money is often a source
of underlying tension, overt hos-
tility, and chronic conflict" in fam-
ilies, asserts Olivia Mellon, a
Washington, D.C., psychothera-
pist who specializes in the psy-
chology of money and money
conflict resolution. "For most of
us, money is never just money,"

Rhoda Posner and Gail Lipsitz work
at Jewish Family Services in
Baltimore.

says Ms. Mellon. "It represents
some combination of love, power,
security, dependency, freedom,
control, and self-worth."
The emotions and significance
we attach to money stem from
childhood. Whether deliberately
or unwittingly, our families corn-
municated certain messages
about money to us: "money cor-
rupts," "money must be saved for
a rainy day," or "money should be
spent because you can't take it
with you."
As adults, we may find our-
selves repeating these patterns
or, conversely, reacting against
them. In turn, we influence our
children's attitudes. By observing
how we handle money, kids reach
conclusions about what is impor-
tant to their family: appearance,
possessions, education, tzedakah
or any other value.
In an article called "Reflections
on the Family, Tzedakah and

life. In learning how to manage
money, children gain experience
in planning, making choices, and
taking responsibility. This is a
continuous process, which is most
effective when parents first clar-
ify their own attitudes toward
money and act consistently.
The best time to start teaching
children financial responsibility
is at pre-school age. Young chil-
dren think in concrete terms. If
they are given the freedom to
spend a specified amount of
money as they see fit, they will
learn that when it's gone, it's gone.
But parents must be willing to let
their kids make some mistakes
and not bail them out. The risks
can be controlled by directing the
money for a particular purpose.
For example, on an outing to the
Walk For Israel, Jane and Lenny
give each of their twins $5 for
the day. Now the boys have
the freedom to make individual

choices on how to spend the
money.
These early lessons in reality
prepare children for budgeting
later. "You are empowering them
to run parts of their lives," says
Neale Godfrey, author of "Money
Doesn't Grow on Trees: A Parent's
Guide to Raising Financially Re-
sponsible Children."
Most parents set about teach-
ing kids the value of money in one
of three ways: by giving them
money as needed, allocating a reg-
ular allowance, or having them
work to earn the money. One
option is to rnix these models, de-
ciding at what age and for which
situations each is appropriate and
most conducive to learning.
A regular allowance is the best
way to teach money management.
Some parents tie the allowance to
household chores. Others believe
children should be expected to ful-
fill household responsibilities as
members of the family, with no
pay, and they separate the allow-
ance from those jobs. And some
give an allowance but provide ex-
tra money for certain household
responsibilities. Each of these
approaches communicates a fam-
ily's values, and each has pros and
cons. For example, paying Susan
to do her chores can be an incen-
tive, but does she then have the
right to refuse a job and forgo the
money?
In deciding on the amount and
timing of an allowance, first con-
sider your family's income and
standard of living. Then factor in
your child's age, needs, and abil-
ity to budget. With a young child,
start with small amounts for spe-
cific events (snacks at a movie or
family outing). The school-age
child who begins to venture out
into environments without adults
has different opportunities to
spend, such as school lunches or
video games. A teen-ager wants
to buy clothes and music, gas for
the car, and entertainment on
dates.
"Lengthening the time between
allowances is a way of shifting
more responsibility onto older kids
and teaching budgeting," says
Lynn Alsop in a Wall Street Jour-
nal article on "Kids and Money."
Keep in mind that the amount
given must realistically reflect the
current cost of living.
Another source of income is
money earned by working outside
the home. Middle schoolers cut
lawns, shovel snow, or babysit,
while teen-agers may have steady
jobs. While most parents allow
young children to keep their earn-
ings, later on parents can look at
their philosophy and financial cir-
cumstances with their teen-agers,
deciding whether some of the
young adults' earning will be con-
tributed back to the family "pot"
or to future educational expenses.
Children also receive gifts of
money—for birthdays, Chanukah,
bar mitzvah and graduation. A
painful scene in The Loman