Eid Money to Teach Money

Teaching kids about money is hard.

How do we introduce them to the complex world of finance while preserving their innocence and preventing an unhealthy obsession with money?

Eid.

How We (Don't) Teach Money

When I talk to adults about how often they talked about money growing up, most say not often at all.

Parents may offer general money wisdom: save money, give generously, and spend less than you make. But when it comes to a clear, actionable game plan, many of us were left in the dark.

That is a problem.

Too often, the silence around money cultivates financial anxiety and disordered habits that follow us into adulthood.

If you decide to teach your children about money intentionally, you'll quickly find yourself in a debate about whether you should

1. give your children an allowance or
2. pay a commission for household work they do

Both options have their drawbacks. Does an allowance imply money comes without effort? Will children expect remuneration for simply contributing to home life?

There are no easy answers.

I’ve considered devising an elaborate system to teach my children about money. It involved determining a list of unpaid tasks and another list of commission-based extra-effort chores. I even had a flowchart to decide when I would garnish commissions if work wasn't getting done.

Thankfully, my wife talked me out of my plans for educational theatrics.

Teaching kids about money is tricky because there are few natural money-learning opportunities in a child's life.

Except for Eid.

Eid: A Natural Money-Learning Opportunity

A few visits to family and friends on Eid day will make many children a little richer the day after.

We can temporarily bypass the allowance versus commission debate because, like it or not, kids have money in hand. Amounts will vary, but each child can ask themselves a shared question: How will I manage this new money?

And that's why Eid is a natural money-learning opportunity. Parents can, in real time, teach their children about responsible and generous money management.

Here's a simple approach we've found beneficial in our home. After Eid, our children count their Eid money and then do what we call the “Triple Split”:

1. Share: a portion to donate (e.g. 30%)
2. Save: a portion to save long-term (e.g. 40%)
3. Spend: a portion that the kids can spend freely, within reason (e.g. 30%)

We try to simplify the decision-making process by asking our children, "If you had $10, how many dollars would you like to share, save, and spend?” The resulting percentage-based allocations aren't always perfect but provide a good starting point.

The numbers aren’t nearly as important as the exercise of dividing itself. That’s especially true for younger children. When our kids suggest lopsided allocations, we guide them back to a more balanced distribution.

Ultimately, we want our children to get in the habit of thinking of money through a trifocal lens (share, save, spend) rather than adhere to specific numbers.

Benefits of the Triple Split Exercise

This exercise offers several benefits.

1. Simplicity: Money can be an emotional game. The Triple Split exercise simplifies decision-making by having children pre-commit to a specific amount of spending. Decisions thereafter are made within a single split rather than between splits: It’s a lot easier to decide if you want to spend $15 to buy Lego or Play-Doh than it is to decide if you want to spend it buying either of those items…or save it…or donate it. Triple Splitting shows children how to reduce the emotional intensity of financial decisions.
2. Justice: Naquib al-Attas writes in On Justice and the Nature of Man that justice in Islamic tradition is the practice of “putting things in their proper place.” As mundane as the exercise may seem, Triple Splitting is an act of justice. It reminds children that receiving gifts is bundled with responsibility toward others (share) and our future selves (save).
3. Virtue: The Triple Split money exercise nudges children to think about giving first, saving second, and spending third. That order is intentional. As we grow older, money pushes and pulls on our egos. Planning to give first emphasizes generosity as a primary virtue.

Children who practice thoughtful money management from a young age are more likely to approach finances generously and responsibly as adults.

We hope that the Triple Split exercise helps our kids achieve this. No flowcharts, wage garnishment, or educational theatrics involved.