Money is never just money

Israel is about to start teaching teenagers how money works. But there is a harder question: who will teach them why they behave the way they do toward money? By the time 15-year-olds learn about credit, inflation, investments, or compound interest, many of the beliefs that will shape their financial lives have already begun to form. They learned them at home, not in class, but by observing.

Teenagers already know who in the house can spend money without asking, who gets stressed when the credit card statement arrives, whether money is discussed openly or only after an argument starts, whether success means having more, whether saving is perceived as a responsibility or as an expression of fear, and whether the parent who earns more is also the one who has the final say. Long before children understand what money is, they understand what money does to people. And that may be much more important than we tend to think.

We like to believe that financial mistakes are primarily a problem of lack of knowledge. We will teach young people the true cost of debt — and they will take out loans wisely. We will explain to them what risk diversification is — and they will invest rationally. We will show them what can happen to money if you start saving at a young age — and they will save. But if knowledge were enough, people with extensive financial knowledge would almost never make bad economic decisions. And yet, they do make them.

Investors who understand risk well still panic when markets fall. Successful managers chase investments just because everyone around them is profiting from them. Spouses who can afford a purchase without any difficulty still hide it from each other. Parents who know that continuing to bail out an adult child from difficulties might create dependency — give him money one more time. The spreadsheet can tell us what is logical to do. It cannot explain why we still choose to do something else. Because money is never just money.

For someone who grew up in a home where the family business collapsed, money can be security. For someone who grew up with controlling parents, it can be freedom. For someone who felt outside the social circle in childhood, it can be status. For a parent who wants to give their children everything they didn't have, money can be an expression of love. And it can also be power — when the one who holds the money believes that the very fact that they are paying also gives them the right to decide.

All this does not make financial education less important. On the contrary, it makes the next step obvious: we need to teach our children not only how money works, but also how they themselves behave when money enters the picture.

• The financial question: how much does this loan cost me?

• The emotional question: why do I feel I must have this thing now?

• The financial question: how much do I need to save?

• The emotional question: what am I afraid of if I don't save?

There is a simple experiment that parents can do this evening. Ask your child: "What did you learn about money from observing us?" And then comes the hard part: do not explain, do not correct, and do not get defensive. Just listen. Because it is possible that the most important financial lesson your child will receive this year will not take place at school at all. It may be the discovery of what they have already learned at home.

Diego Sokolovsky is an economist and expert in financial psychology and behavioral finance. Tali Schwarzpiter is a psychologist and process facilitator specializing in emotions, relationships, and communication. Together, they founded the DA3 Team, which deals with financial decision-making and the human dynamics behind it.