October 26, 2006
The magic Spend/Save/Tzedakah Plan keeps kids thinking
"I know what I want for my birthday," my first-grader announced upon returning from school today. "A PSP [PlayStation Portable]."
"Jake" I replied, intent on giving my son perspective on how much his request would cost. "Do you realize that you could go to the dollar store and buy 300 toys for the price of one PSP?"
"Really?" Jake asked, clearly pondering this revelation. "I guess I'll just do that instead!"
It's not that my son is inherently greedy. On the contrary, he's compassionate and generous. It's just that he is in a developmental place where it's difficult for him to grasp the concept and value of money. In fact, the vast majority of grade-schoolers (up to age 11) are what cognitive psychologists call concrete thinkers. That means they have a tough time conceptualizing anything they can't physically see or touch. Money -- thanks to credit cards, checks, Internet PayPal accounts and the like -- is a hugely abstract concept.
Through the eyes of my soon to be 7- year-old, the difference between $300, $30 and $3 is largely inconsequential. I know it seems hard to believe that this could be so, but that's only because we adults have the ability to think abstractly. Trust me, after a decade and a half as an elementary school teacher, I can tell you that, with rare exception, the only way an early elementary-aged child is going to truly understand the quantitative distinction between these amounts is if he actually sees 300 $1 bills piled next to 30 $1 bills piled next to three $1 bills.
So how do we enlighten our concrete-thinking kiddies to the fact that -- despite popular playground belief -- money doesn't grow in ATM machines? With the Spend/Save/Tzedakah plan, of course! A superconcrete, positively priceless program that helps children the grasp the value of money, empowers them with financial smarts and encourages them to give back to their community, all in one fell swoop. Here's what you need to know to get it working for your little spenders.
Three Little Piggies
The basic premise of the Spend/Save/Tzedakah plan is to have our kids regularly divide their allowance into three distinct sections -- one for personal spending, one for saving and one for giving. Deciding how to allocate the money (i.e. 60 percent spending, 30 percent savings and 10 percent tzedakah) is a personal family choice, but it's important to make sure kids stick to their designated amounts every week.
For the Spend/Save/Tzedakah plan to work its magic, children should be required to use their personal spending money for all nonessential purchases other than birthday and Chanukah gifts. That means our kids pay for their own popcorn at the movies, Power Ranger popsicles from the ice cream man and fruitless attempts on the "try-to-pick-up-a-stuffed-animal-with-a-metal-claw" machine. Still doubtful? Consider the following scenarios:
Shopping at Target without the Spend/Save/Tzedakah Plan:
Child: "Can I get that Hot Wheels car?"
Child: "Please? It's only $1.29, and I've really been wanting that one."
Parent: "I said NO."
Child: "But, it's a Hummer Hot Wheels -- with real monster truck wheels!"
Parent: "How many times do I have to tell you? No means no!"
Child: "Please? PLEASE? PLEEEEASE?"
Parent: "OK, fine. Just put it in the cart and stop whining."
(Epilogue: The same scene plays out the next day only this time the kid wants a pair of $70 Heelys roller sneakers.)
Shopping at Target with the Spend/Save/Tzedakah plan:
Child: "Can I get that Hot Wheels car?"
Parent: "Sure. You can use your spending money any way you'd like."
Child: "Well, I don't really need it. I'd rather save my money for those Heelys roller sneakers."
Just to clarify. The kind of savings we're talking about here is the kind you put away for a long-term goal -- like going to college or spending a high school semester in Israel -- not an exorbitantly priced toy or an overpriced outfit. The key here is to help our children move beyond the instant gratification mentality toward understanding that some things cost so much money it takes years to save and pay for them.
Finally, it's important for children to have a concrete representation of their savings progress. Have them place a sticker on a chart each time they surpass a $10 increment, or enroll them in a kiddie savings program that requires no minimum balance and provides monthly statements. We parents will be as excited as our kids to see how much money they are putting away for their future!
Our kids' lives largely exist within a vacuum. They have their families, their friends, their schools, their neighborhoods and their material possessions. They often don't consider the needs of those less fortunate, not because they don't care but because they are not used to thinking outside their familiar worlds.
By putting a small portion of their allowance toward tzedakah each week, our children will begin to appreciate their responsibility as Jews and human beings to share their resources with the community. They'll come to recognize that many of life's most precious gifts come without a barcode. And that -- in the scheme of things -- a PlayStation Portable isn't really that important after all.
For a piggy bank perfectly designed to fit the Spend/Save/Tzedakah plan, check out the Learning Cents bank at www.learningcents.com.
Sharon Duke Estroff is a syndicated Jewish parenting columnist, award-winning Jewish educator and mother of four. Her first book, "Can I Have a Cell Phone for Hanukkah? The Essential 411 on Raising Modern Jewish Kids" will be published by Broadway Books, a division of Random House, in 2007.