Money Money Money

SUZANNE CHESSLER CONTRIBUTING WRITER

Tips to help
your child use
their monetary
gifts wisely.

C44

celebrate! • 2017

D

aniel Hollander, a Southfield attorney and financial advis-
er, never met Beth Kobliner, a New York money journalist
and author, but the two have some background experi-
ences and forward-looking viewpoints in common.
Both grew up with parents who were teachers, and both early
on understood how their respective bar and bat mitzvah gift
money would be spent. His was to be put away for college, and
hers was to be used to cover expenses for the coming-of-age reli-
gious celebration.
There was no decision-making on their parts, but they both
participated in conversations that made them
comfortable with what was necessary to maintain
stability in their lives.
The two, now with their own children able to
use bar and bat mitzvah money more freely, agree
the larger sums of cash and checks received dur-
ing these special events represent starting points
for establishing responsible financial manage-
ment perspectives.
The teaching, they recommend, ought to hap-
pen concurrently with preparing for the rituals
and partying — long before any gifts are given.
“At the time of a bar or bat mitzvah, a person is
supposed to be entering Jewish adulthood com-
mitted to Torah and study,” says Hollander, whose
firm is Hollander & Lone.
“That is the time to be thinking about what
adult realities are, and those realities certainly do
not include spending all available cash. Parents
should be communicating that idea as youngsters
anticipate the sums of money they will be receiv-
ing from family and friends invited to share in one
of life’s turning points.”
Kobliner, recently in Michigan to introduce
her new book Make Your Kid a Money Genius (even if you’re not),
has outlined the stages at which young people should be thinking
about various aspects of handling money. The time of the bar and
bat mitzvah enters into her commentary.
“A couple of years ago, I was appointed to President Obama’s
Advisory Council on Financial Capability for Young Americans,”
explains Kobliner, who has been a regular contributor to Money
and Glamour magazines. “I created a website called ‘Money As You

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Grow,’ and the Consumer Financial Protection Agency has used
the information for its website.”
In her book, Kobliner advises that the time of the bar or bat
mitzvah moves teens from building financial habits and values
into practicing money skills and decision making. As parents
mentor a child, it is recommended that they remain open about
communicating the financial status of their own family and sav-
ings needs for the future.
Deciding what to save and then opening and maintaining a sav-
ings account introduces a 13-year-old to everyday responsibilities
to be faced in adulthood, both advisers agree.
While it may be the child’s gift money, parents still hold respon-
sibility in directing any plans for the money given, says Kobliner,
who suggests the experience of getting large gifts can be especially
good practice for specific situations later in life, when a cash
bonus or a large tax refund is received.
If there is enough family money to allow a teen to go beyond
savings and make an investment over time, both financial special-
ists stress diversification just as they would for adults. Index funds
— each structured with holdings designed to match the perfor-
mance of an index of stocks or securities — fall into that category.
The element of risk and the time available for holding invest-
ments can be explained at this point, Hollander says.
“Good stewardship of bar and bat mitzvah money requires an
examination of the objectives of the child as tied to the parents’
wishes,” Hollander explains. “If a child understands that all or
most of the money has to be used toward college, then it is appro-
priate to explore the Michigan Education Savings Program and
how funds can accumulate tax-free.”
Kobliner advises that teens will be more willing to put away
money for college if parents talk about the realities of college by
making the issues concrete. One motivator is explaining that peo-
ple who go to college can earn $1 million more than the general
population in their lifetimes.
Also important to Kobliner has been the idea of giving back to
the community by donating some of the gifted money when pos-
sible.
“Talking rather than telling is important to the behavior of
youngsters as they’re growing older,” she says. “It is important for
a 13-year-old to think about giving to others as a way to commem-
orate this important experience.” *