Money Messages For Kids
Published as “Teaching children about money helps build crucial life skill, form healthy financial habits” in The Jewish Light —May 7, 2025
All of us picked up money messages from our families when growing up. Some were verbal messages — such as when it’s time for tzedakah; and some are nonverbal messages — things we observed our parents or relatives doing. When I was a kid in the 1960s and 70s, my folks paid cash or wrote checks for almost everything — groceries, clothes, utilities, other bills. They had a Phillips 66 gas card, and later a Sears credit card for appliances. So the message I got was that you don’t buy something unless you have the money to pay for it.
Money was something we earned. We got an allowance for doing chores – dishes, yardwork, and housecleaning when Mom went to graduate school. When older and if I wanted more, I got jobs — babysitting when I was 12, party helping at 16, movie theater concession girl or waitress in the 16-18 range.
If you want children to have a foundation for making good financial decisions, why not craft and plan your money messages for them early? No need to wait until high school to start talking to kids about money. Younger kids should be taught several basic concepts.
First, explain the difference between wants and needs. Needs are the survival expenses — food, roof over your head, utilities, (parents’) car to get you to school, activities, friends. Wants are those purchases you pine for such as the newest iPhone, cool (“drip”) clothes, music, extra-curricular expenses, summer camp.
Next, explain budgeting. A budget is a worksheet of money in versus money out. You need a budget so that your spending does not exceed your income. Where do funds come from? For families, “money in”or money sources are wages, commissions and paychecks for the majority of income.
Money out goes to mortgage, groceries, medical, utilities, car, veterinarian, etc. A child’s budget is much less complicated, of course. At the bottom of this article, find a simple budget worksheet for your child.
Third, they need to understand the value of savings. Tell them: This is where you keep money you’re saving for big things, like a bike, a video game system, iPhone, or gifts for family and friends. One proven technique is to open a savings account for your child and match some portion of every dollar saved. Once set up, review the monthly statement with the child and show how the account grows from deposits and interest. As your child gets used to saving, they will learn the importance of discipline and goal setting.
Related to this is the concept of growing your money. A great way to explain this is the term, “time value of money.” The time value of money simply says that a dollar received today is worth more than a dollar received in one day, one month, or a year, because the dollar received today can start earning interest immediately. This is a core principle of finance. A sum of money in the hand has greater value than the same sum to be paid in the future. This is because money can grow only through investing. An investment delayed is an opportunity lost.
Fifth, introduce the topic of sharing/charitable giving/ tzedakah. This is where you designate money to help others. Tzedakah is a mainstay of Jewish life. Tzedakah is literally translated as “justice” or “righteousness.” Tzedakah tells us that sharing what we have with others isn’t something special. It’s the honest and just thing to do. No matter how much you were blessed with, you can always share with others. A big bonus of tzedakah is that giving to others makes you feel great too!
Next, discuss borrowing. If your child asks to borrow money, explain the importance of repaying debts in a timely manner. If a child wants something they don’t have enough money to buy, and asked you (parent/guardian/grandparent) to buy it for them, make it a lesson and set guidelines. Establish a reasonable repayment schedule, and stick to it. For example —they must promise to pay back a little each week over a certain time period. They must keep track of what is paid and what is left to pay in a worksheet. By teaching your children the importance of borrowing only what they need and repaying loans as promised, you can help them avoid trouble later.
In summary: Teaching kids about personal finance early is a great way to teach them valuable life skills.
