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Have you ever told your children, “Money doesn’t grow on trees?”

Indeed, when a very young child sees his mom take money out of an ATM, he thinks that the banknotes magically appear. And when he sees Dad writing a check, he thinks money gets created by writing down what you want on a piece of paper.


Even though we all learn the truth about where money comes from, the financial myths and habits developed by people who are not taught proper financial skills early on persist into adult life. Children who never learn about saving and budgeting grow into financially unsavvy adults.

Two ways to teach your kids about money

Next time you take your kids to the store show them the truth behind the sales: the “great deal” on three tins of lemon chutney for half price is nothing but a marketing ploy because you would never normally buy lemon chutney anyway. When you compare two different cans of tuna, let your kids be part of the calculation of the cost per unit and which one is more value for money. If they ask to buy a treat, explain that there is a limited amount of money to buy food, and the perils of going over the budget.

When you give your kids an allowance, make it contingent on their giving a portion of it to charity. Then, a piece should go into the piggy bank, and then, and only then, the rest can be spent. This teaches them the concepts of saving and planning.

Delayed gratification

If your kids don’t have enough money saved to buy the toy/gadget they want, don’t run out and buy it for them. Teaching them to save for what they want lets them determine if it is “worth it.” If your budget allows you to buy the gadgets they want, instead of giving them the money straight away, consider employing them and paying them to do odd jobs. This teaches the value of money and hard work. Children need to learn from an early age they can’t spend what they don’t have.

Teach your children how to be financially responsible when they are young, when the cost of mistakes is relatively small. Perhaps the best lesson you can teach children about budgeting is that it isn’t restricting – it gives you the freedom to spend what you have.


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Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd, a financial planning and investment services firm specializing in working with Americans living in Israel who have investment accounts in America. He is a licensed financial professional both in the U.S. and Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, FSI. Accounts held at Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. Neither Profile nor PRG gives tax or legal advice. Before immigrating to Israel, it is advisable to consult with a tax attorney who is knowledgeable about Israeli law. Contact at