My favorite photo of my dad at his 1957 bar mitzvah shows him, tuxedoed but clearly pre-pubescent, proudly holding a sign that reads, “Today, I Am a Man.” The bar or bat mitzvah as an overnight transition into adulthood — while meaningful — is an idea that has long amused actual adults, the parents of newly-minted teens and giggly daughters grasping the meaning of their own rites of passage.
But if some aspects of a bar or bat mitzvah aren’t quite mature, the gifts kids receive, in the form of all those checks in multiples of $18, often are. Many will be receiving their own money for the first time in their young lives, which makes the b-mitzvah a prime teachable moment for parents who want to raise financially smart, savvy and sensible adults (or “adults”).
About a year before her bat mitzvah, Lisa Grossman’s father presented her with a Quicken spreadsheet that represented her account in the “Dad Bank.” Every week, her allowance appeared in the spreadsheet as a direct deposit. When she wanted to buy something, she submitted for a withdrawal. The savings left in the account accrued interest — at a highly favorable 1% monthly rate — so she learned about savings and compounded growth.
Writing thank-you notes to those who gifted her money for her bat mitzvah, Grossman remembers writing, “Thank you for the generous gift. It’s in the bank and accruing interest right now!”
“My mom told me not to write that, she thought it was too impersonal,” recalls Grossman, who is now a mom of two young kids in Medford, Massachusetts. “But I thought it was really cool. I was excited that my gifts were growing all on their own while they just sat there. Why wouldn’t the gift-givers be excited about that too?”
Grossman’s experience is an example of what experts call “financial literacy,” a set of skills Jewish kids have a unique opportunity to learn if they receive cash gifts for bar or bat mitzvah.
“For many children, this is the first milestone where they receive a substantial amount of money and can start building their own savings,” says Jennifer Seitz, certified financial education instructor and educational content lead at Greenlight, a banking and investing app for kids.
Unlike Grossman’s dad, many parents are unsure how to maximize the opportunity a bar or bat mitzvah offers to teach kids to be smart, savvy and sensible with money. Seitz points to recent data that shows that nearly half of American teens have never made a budget, and only 21 U.S. states require a financial literacy course in high school.
“Most parents know to guide their child not to spend it all at once,” says Seitz, “but even better is to show how they can maximize their gifts for a healthy financial future.”
Rabbi Neal Gold, a teacher and author who edited the volume “Radiance: Creative Mitzvah Living,” says the bar or bat mitzvah is a unique opportunity to set newly minted Jewish teens on a path to become thoughtful, generous practitioners of tzedakah, the mitzvah associated with charitable giving. “The mitzvah of tzedakah is where all of our values…are truly put into practice,” says Gold. “What could be more fundamental to the process of becoming a bar mitzvah or bat mitzvah than that?”
Gold encourages bar and bat mitzvah kids to ask “all the adult questions of giving” as they fulfill the mitzvah of giving 10-20% of their income (in this case, gifts) to tzedakah, like:
- How do I learn about an organization so that I know it will use my money in the most responsible and effective ways?
- Should I give to Jewish organizations or otherwise?
- Local or national or international?
- In the U.S. or in Israel?
- To a big organization where my donation may be less significant, or to a smaller organization where my contribution will have an outsized impact?
- What realm of tikkun olam do I want to tackle with my tzedakah money?
For the portion of their financial gifts they will keep, Seitz recommends teaching teens some basic financial terminology so they speak the language of smart money management. Some of these include:
- Investment: the process of acquiring an asset with the goal of increasing income or value
- Interest: a percentage of a financial sum that’s charged (loan) or paid (investment) at regular intervals
- Compounding interest: money earned on money earned
- Inflation: the cost of goods and services relative to the value of the dollar — teach kids to look for interest rates that are higher than the inflation rate
- Wealth: the value of all assets — including but not limited to money — owned by a person
- A “rainy day” fund: money set aside for an unexpected expense
Teens respond to concrete examples that show them the benefit of adhering to simple, savvy financial principles. Seitz offers this one: If a teen invests $150 per month with an 8% annual interest rate starting when they are 16 years old, they can watch it grow to more than $1 million by the time they are 65 years old (the $150 they set aside each month equals less than $90,000 of that). Waiting just five more years — until the age of 21 — to start $150 monthly savings would only reach about $730,000 by age 65. That’s nearly $400,000 less without the five-year head start.
These numbers might not square with current interest rates, but doing some financial math can help kids get inspired to see the road to a financially stable future.
Newly minted teens also have expenses that come with their newfound independence —primarily around leisure activities but also possibly including bus fare and eventually gas if they have access to a car. “That makes saving and budgeting necessary habits and skills to learn, so they can live within their means and stay disciplined with their money choices,” says Seitz. There are many free budgeting apps that offer easy tools to help your teens create — and adhere to — a realistic budget based on their income and expected expenses. Setting their own priorities will leave teens feeling empowered and confident in their money-management abilities… even if they need to learn some lessons the hard way.
But they need not learn these lessons alone. A 2020 study published in the Journal of Family and Economic Issues shows that when parents and kids actively discuss money at home, kids are more likely to have positive financial outcomes in early adulthood. “Regular conversations are a big piece of financial socialization,” says Seitz, to normalize and practice being intentional with how to spend and save money. If your family works with a financial planner or adviser, consider inviting your bar or bat mitzvah child to open their own account, as Deena Samberg-Shefsky did when her son had his bar mitzvah two years ago. Her son “learned a lot” from sitting down with the advisor, Samberg-Shefsky says, and the family enjoys the monthly teachable moment of reviewing his statements together.
Family decision-making can also build skills, says Seitz: “Challenge your family to make a pact to spend less on something that you really don’t need. Instead, save for something you’d value together much more.” Teens also benefit from learning a bit about how the household runs. Seitz recommends asking your teen to guess the monthly cost of different bills in the family budget, like electricity, internet or streaming services, and showing them how bills arrive and how they’re paid.
However you guide your child into the next phase of their nascent adulthood, remember: Those multiples of $18 refer to the Hebrew word for “life.” So when your child learns to save for the future, spend smartly in the present and give generously always, they are laying the foundation for a life of meaning, security and kindness.