A few weeks ago, I was speaking with an elderly widower in Europe regarding issues of estate planning. He told me that while he had accumulated a very large amount of money, he still wanted to teach his children the value of hard work.
He reasoned that even though he could easily give each child tens of millions of euros each, if he did so, his children and grandchildren would become unproductive members of society, and that was something he was opposed to.
I asked him how he had set up his will, and he said he was leaving each child a very generous sum, but he split it into three different periods. They get the first third at the age of 37, the next bit, a smaller amount, at 42, and the final, larger payout at 48. That way they would have to learn a profession, start to work, buy their own home, and continue to keep working into their late 40s. Whether this is a winning formula, I’m not sure, but his intentions were noble: Teach his children the value of work.
We are now less than three weeks until Passover, meaning we are knee-deep in cleaning agents, and the thought of matzah is still far away. Can’t think about matzah until the curtains are cleaned and rid of all the hametz they are holding!
One of the central commands on Seder night is to teach our children about the Jewish nation’s exodus from slavery in Egypt. Passover is all about passing on our history and tradition from one generation to the next. The children of Israel left Egypt with great wealth.
While we have our children’s attention, it might be a good time to try and teach them about the value of money, and I don’t mean how much that afikomen is going to cost!
I am certainly not saying to spend time at the Seder and speak about money, but a good time to have that conversation might be during preparations for the holiday as we spend huge amounts of money.
I know I have written this before, but I remember when I first arrived in New York for university. I had never been on an airplane nor left the friendly confines of the Pacific Northwest. Shortly after my arrival, I was talking to a New Yorker and mentioned something about the large vegetable garden that we had in Seattle. I will never forget the look he gave me and his comment: “You actually grow vegetables? What do you live on, a farm or something?”
At least he was aware that vegetables don’t grow in a supermarket. Ask a young city child where milk comes from, and he will answer you: “From a store.” The same holds about money. Some kids think money comes out of a wall at a local bank. It’s like magic. You put in a card, type in a code, and presto – out comes the cash!
Especially at this time of year, we are all confronted with some very negative messages regarding money. Earlier this week, I looked online at my bank account, and as soon as I logged in, I was hit with an advertisement to take a loan for Passover. We are bombarded at this time of year with the notion that the more money you spend and the more you buy, the happier you will be. It’s for this reason that it is even more important for us to teach our children and remind ourselves about financial responsibility.
Hard work
True, the Israelites left Egypt with great wealth, but they worked as slaves for a very long time and earned that money as their wages. We need to stress to our kids that nothing comes for free. The last few days before Passover starts we are in the no-man’s land of having a kitchen that is kosher for Passover with no food to eat. And in what’s become customary every year in our home, we keep being asked by our children if we can go out for dinner. To which we respond that if you help clean, we will go out; if not, well, there are always some bananas left to eat. Children need to understand that our money is earned, not infinite, and should be used for positive purposes and to provide for our needs.
For this reason, the first thing to tell our children to do when they receive a gift is to give some of it (10%) to charity. This will help instill in them the need to help out those less fortunate and at an early age become active in their local community. Then we should talk to them about saving. Nothing teaches a youngster about the value of money more than making them pay for something. When it’s their money, they tend to think twice about buying the latest cool gadget.
Passover is centered on our children. Take a few minutes to teach them proper money habits.
Happy cleaning!
The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.
aaron@lighthousecapital.co.il
Aaron Katsman is the author of Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing.