I recently discovered that my 11-year-old son has been hanging onto his allowance, earnings from doing errands for neighbors, and years of birthday cash, and just has it all sitting in his room. Should we make him start buying his own clothes and pay for other necessities or extras? Besides putting some into a bank account (for college “savings?”), how should we advise him to spend his money?[Text Wrapping Break]
Thank you for helping to bring to people’s attention the importance of teaching our youth the proper way to manage their money.
Fortunately, there is an organization in our neighborhood that is working on getting a full curriculum of money management principles into our local yeshivot. The Flatbush Community Fund has a goal of teaching all yeshiva boys and girls such topics as “Needs vs. Wants,” “Saving for a Rainy Day,” “Getting Paid,” “Choosing a Checking Account,” etc. If parents from our community show interest in this topic, I am sure our yeshivot would be willing to begin teaching these classes, that were specifically developed for yeshiva students, once or twice a week.
As far as what to do with his stash? I would definitely NOT suggest that he become responsible for paying for his “necessities.” (I’m assuming that you, as his parents, have the wherewithal to continue doing that). A better approach would be to set aside a specific amount, say $100 or $200, and let him pay for that one special prize that he always wanted (with your permission and direction, of course). The balance should be placed into a savings account, as you suggest.
Given the very current market conditions, I would recommend a simple money market account or bank CD so that he can watch his investment slowly grow over time until he needs it.
Jido Financial Consulting