According to Rabbi Shmuley, an unhealthy relationship with money often stems from the way you perceived money during childhood. Rabbi Shmuley talks with Oprah Radio host and financial expert Jean Chatzky about the importance of raising children to have a good money ethic. Plus, Rabbi Shmuley offers advice to help parents teach their children useful money skills.
What to Teach Your Children About Money:
One must be responsible with money. "One must not waste it," Rabbi Shmuley says. "One must appreciate the value of a dollar. One must learn to save even small amounts—they build into big amounts."
One must work for money. Money doesn't come to those who are lazy—it has to be earned, Rabbi Shmuley says. "If you see money as a gift, if you don't work to earn it, you become spoiled and corrupt," he says.
Being responsible with money doesn't mean being cheap. "Cheapness is as big a vice as being a spendthrift," Rabbi Shumley says. "You have to be generous with your heart and your pocket when it comes to worthy people and worthy causes."
A percentage of your money must go to charity. Rabbi Shmuley recommends giving 10 percent of your money to charity. "It should be put in a separate charity account, and you should be meticulous in whatever percentage you decide to give," he says.
How to Make Your Children Better with Money:
Give your children a weekly allowance. If you give your child $20 a week, Rabbi Shmuley says you should tell them to save $8, spend $10 on things you approve of and give $2 to charity.
Get them a savings account. Take them to the bank and set up a savings account in their name, Rabbi Shmuley says.
Set up a charity account. Rabbi Shmuley says you should discuss various charities with your children and let them decide where they want to give so they can learn to be generous.
Don't let them waste money. If your child wastes his money on garbage, Rabbi Shmuley says you should stop giving him his allowance for a few weeks.
Be a good fiscal role model. Don't live for shopping, Rabbi Shmuley says. Also, give to charity with your children's knowledge. "Be generous on things that really matter, like hospitality and giving your family a comfortable standard of living," he says.
Give your children jobs. Pay them for jobs like mowing the lawn or babysitting so they can earn money for nonessentials, Rabbi Shmuley says. "My kids even did the old lemonade stand a few summers, and they made about five bucks," he says. "And, boy, did they protect that money and appreciate it [because] they had earned it themselves."
"Children must be taught that money is a means to higher ends. It is there to be used responsibly to support a family, live generously and end the plight of the poor. But money should never be used as a currency by which we purchase self-esteem."