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In my practice, clients often ask me for advice on the best way to educate their children about money. Properly educating one’s kids about personal finance is extremely important and can change the trajectory of their life. Unfortunately, most yeshivas and even colleges don’t have a financial planning curriculum. The burden of teaching financial literacy is solely on parents.

Many parents feel overwhelmed when it comes to this task. This may be because they don’t have expertise in this area or because they’ve made poor money decisions themselves. Fortunately, understanding just a few concepts can make all the difference. Let’s review them.

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Appreciation for money: A healthy relationship with money should start at a young age. While teaching budgeting, cash flow management and savings are important skills, few elementary or high school students have the patience to sit down and discuss any of those topics. It’s wiser to start with simply instilling an appreciation for the things one has: an iPhone, computer, car, spending Pesach in a hotel, going away for Succos, simply going out to a nice meal, or any other luxury that may be in their lives. Teaching kids to be grateful through casual discussion reinforces a positive attitude towards money and will serve as a springboard for other finance-related conversations. It will also open the child’s eyes to families that may not be as fortunate. That awareness, and possible lessons on charity, is helpful beyond the world of personal finance. As I tell my clients, financial planning is not only about the accumulation of wealth, it is also about the transmission of values to the next generation.

View college as an investment: Student debt may be the single biggest financial mistake people make. Many high school seniors choose a university based on national rankings, campus life or junior year study abroad options. In reality, college should be viewed as an investment towards a successful financial future. If a student needs to take out debt to finance their education, it’s essential that they have a well-defined plan on how they plan to repay it. If there is no repayment strategy in place, it can have a domino effect that will impact the rest of their life. Cash flows will be tighter, the ability to save will be impeded, and lifestyle goals like buying a home and having kids may need to be postponed. Failing to view your child’s college education as an investment can have the unintended consequences of saddling them with an insurmountable level of debt that will derail their financial future.

Avoid lifestyle creep: As college graduates enter the workforce and begin to make money, there is a natural desire to spend that money on more things. This temptation to spend more as one’s income increases is known as “lifestyle creep.” This is something that everyone in the frum world can relate to. It is imbedded in our communities. Lifestyle creep will not lead to more satisfaction. Instead, it usually leads to more financial strain as one tries to maintain an increasingly expensive lifestyle.

One of the smartest decisions a young professional can make is to continue to live like a student until they bolster their financial reserves and get a handle on their cash flow. For those fresh out of college and accustomed to living with roommates, continuing in a shared living space will not impact their lifestyle, but will allow them to save more money for the next stage of life. After I graduated Yeshiva University, I lived in a dilapidated townhouse in Washington Heights with nine roommates. Looking back years later, it doesn’t seem like a pleasant way to live. However, I saved money on rent and utilities, had a wonderful social life, and was able to max out my 401(k) on an entry level salary. It turned out to be both a great life and a wise financial decision.

Enroll in employer’s retirement plan: When starting a job for the first time, one should make sure they are contributing to their firm’s retirement plan. It’s astounding how many people decide not to do so. They often justify this decision because their employer doesn’t match their contributions or they need the cash flow for other expenses. In reality, the matching is just the cherry on top of what is a wonderful way to save for your future in a tax efficient manner. As for needing the cash flow, I often find that after careful review many find other expenses that are discretionary or simply a case of lifestyle creep.

As a 22-year-old first entering the workforce, your 40- or 50-year investment time horizon is your biggest asset. To capitalize on this asset, it is essential to enroll in one’s 401(k) and contribute the maximum amount, if possible. Once the money is automatically contributed, you probably won’t miss it. Odds are you will just learn to live on less. Over time, the power of compound interest will work its magic and increase your nest egg exponentially to provide for a comfortable retirement.

Understand how credit cards work: Many sophisticated people don’t understand how credit cards work. Credit cards exist to ease transactional burdens and allow people to shop without carrying wads of cash. The added benefit is to build your credit score. A good credit score impacts many areas, including allowing one to get lower rates on borrowed money (e.g., to buy a house or start a business), makes getting approval to rent a house or apartment easier, and potentially lowers auto insurance rates. Building your credit score is as simple as paying off your full credit card balance, on time, every month. The credit card issuer reports each monthly payment to the credit reporting agencies. This will help increase your credit score because it shows lenders that you can manage credit responsibly.

Never try to ‘keep up with the Joneses’: Settling in a community often comes with certain social pressures to maintain a particular lifestyle. It’s important to teach your children that there will always be someone who has more. There will always be a family in your social circle that appears to have a higher income, nicer house, fancier car, go on better vacations, and on and on. At all levels of wealth, trying to keep up with others is a futile goal that will only lead to unhappiness and financial hardship. It’s far more important to live within your means, save money every year, invest it prudently, and focus on the things in life that give you true joy, like spending quality time with family and friends. Focusing on educating your kids on what’s important in life and these prudent financial principals will give them a great foundation for the future.

Readers are encouraged to ask their personal financial questions, which may be quoted from and addressed in a future column, by emailing Jonathan@shenkmanwealth.com.

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Jonathan I. Shenkman, AIF® is the President of Shenkman Wealth Management and serves as a financial advisor and portfolio manager for his clients. In this role he acts in a fiduciary capacity to help his clients achieve their financial goals. He publishes regularly in financial periodicals such as Barron’s, CNBC, Forbes, Kiplinger, and The Wall Street Journal. He also hosts numerous webinars on various wealth management topics. Jonathan lives in West Hempstead with his family. You can follow Jonathan on Twitter/YouTube @ShenkmanOnMoney.