Whether it's a multiple of 18 for chai (pronounced 'kai,' meaning "life" in Hebrew) or not, cash is always a welcome gift for the bar or bat mitzvah. Parents need to teach their children smart financial habits, and the bar and bat mitzvah is a good time to think about how to create smart strategies to save and grow the gifts of cash.
Money experts say that even before bar or bat mitzvah, it's good to introduce a child to savings vehicles that could earn interest, such as savings bonds and certificates of deposit. Search for a compound interest calculator online and show your child how just one dollar can grow with interest over time. When youngsters get involved in money matters, they can become stewards of managing their money later. If they learn how to handle money at a younger age, they will be prepared to handle bigger financial decisions through the different stages of their life.
At Visions Federal Credit Union, with Bergen County branches in Mahwah, Westwood, Dumont, Englewood, Oakland and Saddle Brook, "the young customer is valued from the very beginning of his or her life," said Ada Myteberi, a [Regional Member Service Officer] for the New Jersey region. "The earlier good financial habits are built, the better," said Ms. Myteberi. "[Most of us parents] don't teach enough budgeting and money management to our kids."
The credit union offers a program for 12 and under called the Kirby Kangaroo Club, a free savings program designed especially for kids. Kirby Kangaroo uses stories, games, and entertainment to help kids learn about saving and finances. The club provides special incentives and benefits for children who are age 12 and younger. It includes The Kirby Kangaroo website packed with fun stuff for kids to learn with: stories, games, coloring pages, and jokes; quarterly Kirby Kangaroo newsletter; and special Kirby Kangaroo youth activities all year long. Every $5 deposit earns a gift.
Starting at age 13 at Visions, members are able to open a checking account and receive a debit card. A Flex Checking account is perfect for teens, too, with no monthly service charges or minimum balance requirements. They also offer youth lending and credit card accounts, too. These help teens learn responsible borrowing habits alongside guidance from parents and our own financial professionals. Visions members age 14 to 17 can also learn to manage a small credit card limit up to $500. A co-borrower is required, and the teenager member may be required to complete a financial literacy program with a parent or legal guardian before approval.
Experts say that the best way to teach youngsters about how to manage money is to give them some, and now that they have it, they can save or use it. They should figure out what they want and see how they can pay for it themselves. It gives them the chance to learn about the consequences of overspending.
Teaching children delayed gratification will help combat the "buy now, pay later" mentality that could mire them in credit card debt later on. Curbing impulse buying goes hand in hand with teaching delayed gratification. Before going shopping, create a budget. Outline what you're going to buy, what stores you're going to, and the price range for each item.
These also are important lessons of becoming a Jewish young man or woman, or any other culture for that matter: learning responsible money management to last a lifetime.
Reference: adapted from https://jewishstandard.timesofisrael.com/mitzvah-money/
