Frum.Finance

My kids are a little too young I think, but I've thought a lot about how to teach kids about money and would be curious to hear others' thoughts.

There is the core component of money being a vehicle for kedusha (using it for tzedakah, hidur mitzvah, etc) but some other concepts I imagine being harder to teach are money's ability to generate more money when handled correctly, and also money's finitude. Especially with money being so electronic these days...

A point I always stress, which I think is a big problem in the world at large, is that just because one _can_ afford to buy something doesn't mean one _should_.
Actions here speak much louder than words.

That's one of the reasons I love living in Baltimore. The millionaires and the people on food stamps drive the same cars.

Happy to hear. The exact opposite of this mentality is one of the reasons why my wife &amp; I moved out out of a certain city that shall remain nameless.
When I was in Kollel, I biked to Kollel to avoid buying a second car. I had a Rebbi (not from my Kollel) get all upset at me that it's a bizayon for a talmid chacham. We had a 30 minute argument about it. Needless to say, I remained completely unconvinced by his arguments (e.g. that if I needed $5k for a medical condition, I would find the money, therefore the same applies to buying a car). It didn't help that this Rebbi drove a luxury car. 
Sorry for the rant, but imagine trying to be mechanech children surrounded by hashkafos like this.

One way for example is to have them earn money.

For example: we purchase a kitzur shulchan aruch for every clasates bar mitzvah which costs $18.00.
If you want to spend more for your best friend then this is how you can earn and save.

I have seem how people create a benchmark for all things and hand their kids the cash at the beginning of the year.

Each kid gets $600 cash.

With clear benchmarks on:

Clothes
Shoes
Gifts
Treat/snacks
Etc..

Obviously one can only do what they can afford

In the Rebbe Raytz's sichos.
He discusses how he earned money through mishnayos baal peh/tanya baal pe

$0.05 a line?

I love this conversation. Let's keep the suggestions coming!

Its hard to explain bc it's a unique relationship, but here is the best I've come up with so far.

International exchange student who is paid (a federally determined amount) to watch your kids up to 45 hours a week. You provide room and board and pay the program fee.

Flexibility example, we are going away this upcoming shabbos and going out motzei shabbos. She comes with us on the trip, she gets to do whatever she wants shabbos then comes back to watch the kids after and we can go out. Child care that travels with you. 

Here is one of the matching programs to learn more. 
<https://culturalcare.com/|https://culturalcare.com/>
From a thread in #general

TIL that MD 529 can use $10k per beneficiary (possibly per contributor so double if married) be used for K-12 tuition. The first $2,500 contributed to a MD 529 each year is state tax deductible

If you setup a non profit it can pay towards tuition <https://www.irs.gov/taxtopics/tc313#:~:text=A%20qualified%20tuition%20program%20(QTP,account%20for%20paying%20those%20expenses|https://www.irs.gov/taxtopics/tc313#:~:text=A%20qualified%20tuition%20program%20(QTP,account%20for%20paying%20those%20expenses>.

Isn’t that a 529? it says “is a program established and maintained by a state, or an agency or instrumentality of a state”

Just enrolled my 11th grader in a community college dual enrollment program in order to take a single course which she's taking online with no required synchronous class attendance.

This is so much easier than I thought it would be. I'm hoping to start earlier and with higher course loads for my next daughter

I don't know why anyone would do "ap" when you can get real college credit with a dual enrollment program.

AP meaning tests? 
Tests can be accepted as real credits

I thought ap needs to be a high school course with an AP test and that you don't actually get credit for it. When you start college for real, the college gives you credit for the course you already took

Clep is authored by the same people "college board" and doesn't require a course, but has a similar deal. Another college needs to credit you for it

But dual enrollment is getting actual credit, you don't need some later college to convert an hs course into college credit

I've been out of the world of colleges for about a decade now so my info might be obsolete, I might be making a bigger deal about these distinctions than I should

My own education path involved using a bachelor's from yeshiva bmg and a year of pre reqs to get into graduate school for CS. My first formal math prereq was calc 2 because I managed to use clep to satisfy calc 1.

My wife tested her way to a bachelor's and used it to get into grad school for school psychology but now we're talking about a bachelors from 20 years ago

I did the same through Excelsior in 2013 - dunno if it's still an option, but it was fast and cheap. Only useful in specific scenarios though

Our local bais yaakov does the whole 12th grade with a local community college, for a total of 6 courses (3 fall and 3 spring)

I did AP classes as well as enrolled in college during highschool. You can't really compare. AP tests are tests you just add on to courses you were already taking, so it's  an easy way to just get more credits and advance your degree.

I've always been of the opinion (which I learned from how I was brought up) that kids should be shielded from their parents finances, especially as it relates to absolute numbers. 

Recently I realized that the best way I could educate my older (teenage) children about finances would be to involve them in my tax filing process and my monthly bill paying process. Which I can't really do without exposing the absolute numbers.

I was wondering what the community thinks about whether kids should be shielded from their parents income, debt and spending numbers.

Assuming they know how to keep the information to themselves. What's the argument for shielding them?

Its great to know what kinds of bills to expect as an adult and what they typically cost. And how to navigate taxes

Sharing income and debt numbers though I don't think many kids could handle that.

It might be too much of a dose of reality than they could handle, either that it would be scary if money is tight in the household or alternatively make them gaavadik if their parents  are high earners.

Something about it also seems like a breach of parental authority, making it too much of a partnership with the kids but I can't explain exactly why i'm feeling that way


I agree with the points <@U06BC87EVB2> made. I think it's possible that exposing this information could cause nervousness or instability. There's something to be said, I think, for a child (even an older one) being shielded from financial aspects of life which can be scary

even scary for adults some of the time... :upside_down_face: 

I guess I feel the exact opposite. I wouldn't go into too much detail with younger kids, mostly just because they can't keep it to themselves.

I don't agree with protecting kids from real life because it can make them nervous. They're going to have to deal with those real life problems at some point, they may as well know it exists and how to handle it.

I only have younger kids, but I think by the time they're in their mid teens id be comfortable being open with them.

I bring up ballpark expenses (but not income) here and there when I feel they're useful. E.g. when my child asks whether I make $1K, or alternatively that I have $1M to buy our house. Instead of discussing my income, I talk about ballpark house prices and explain mortgages and start putting a floor on income levels.

Kids have no clue what anything besides candy and toys cost

$1K and $1M are basically the same thing to them

the exact numbers aren't necessary to educate, the same way you can teach them about healthy eating without telling them how much their parents weigh. 

The numbers and brackets and tax rates and all the details are fairly subject to change over time anyway. But I mention points that come up - like my kids know I never want to win some super expensive jewelry package in an auction pamphlet because the taxes on that are more than I'm willing to pay. But if you win the cash prize you can set some aside for taxes and still come out ahead. 
So pure hypothetical scenario but the concept of taking taxes into the cheshbon. 

So I'll give a specific example - I'm about to go through my annual process of gathering all my tax docs, totalling my charity expenses and certain other expenses. If I say to my kids "now I'll go through and check all my charity spending" they'll hear. but if they see the process and see me doing it, and even help, they'll take the message home more. Or if I show them "this is a W2, here is how much I made, how much I withheld, etc" it'll be much more meaningful than if I just show them a mock W2.

But I also don't feel great about showing them my actual numbers. I think kids should have the luxury of feeling secure in their family's finances, and I think them _not_ knowing the numbers is a part of that

Maybe I'm crazy but why are the actual numbers relevant and why do they have to practice filing taxes now? Assuming they have decent reading comprehension skills and understanding, can't they follow some online wizard like TurboTax and free tax USA and put box 2 where it says to put box 2? So many of the exact questions might be different in a couple of years. 

I would have them do their own taxes with my help as soon as they earned money though. I know so many people with a 1040-ez return who are sure they need an accountant. Which is honestly not the end of the world either in the grand scheme of things. 

Actually that's a great point. I'm probably overthinking and over optimizing. I think I can mention the basics and trust they'll figure out the details the same way most adults do

Like I think basic cooking skills are important but it's really not integral to know how to make every last dish. And even what they cook now might have to be adjusted and recalibrated for a different oven or taste and will take some figuring out. That's ok, you can keep learning in life. 

there are certain things that are good to know in general like what resources are available for advice or general tips like you don't have to pay the sticker price for medical bills 

on that note it can't hurt to have a copy of "never pay the first bill" in the house where they might pick it up

You for sure need to teach them the ideas of money such as banking, investing and the cost of living but I don't  think they should know your specific situation. Part of raising kids is preparing them for the world. They need to know how money and life works.