How to talk about money with your kids

Thursday, April 20th

00:27:25

Cash in with a finance teacher at West Irondequoit. 

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

You have got to grab their attention I don't care what it is that you need to do to get your kids' attention if it's jumping up and down waving your arms up in the air shouting. Paying yourself. First. It's seven figures and see any writers think you so much for joining the weekly podcast we do it every weekend we talk money. I love the sound of that we talk about how to make money. How to save money and lend to spend money. Our job as parents is to help our kids with their personal finance and just start that conversation now. Sharon might be uncomfortable nobody really wants to talk money I saw a study T. Rowe Price did as a study that says. Almost half of us intentionally. Ignored conversations about money with our kids. Why. If they don't learn from us who were being in a learned from we need to be having meaningful conversations about money. And sure it's boring I remember as a kid man I hated it on my dad but pontificate about saving I would just ignore him but now is an adult they look back and I am so grateful for all of those conversations. So we thought we would get a whole bunch of kids can ask them. Basic personal finance questions so your kid is in the room with view or in the car with you have them answer a lot of college fully answered these. Financial questions. First questions. I mean. As a kid and an iPhone would probably beat any team now iPhone is how long because kids want to fit in and they wanna have. Good device that. Play on the moon and act cool if you want something you can't afford somebody stop talking to a parent seeds you can borrow the money and then pain and that the leader would be a good idea trying to persuade them. And your parents to give you money for it in don't get this thing that I really. First step. On the back if you get money you should bite stuff bring you before you do it for anyone else. And to think about yourself above the others like to do you want and silly but others aren't so you leg and I mean violate you live for yourself and settling greedy CNN money. Acrylic something more important. We're like something else for someone else it well. I don't think soon. Her life you need to have six yeah. Think our kids so we that we catch Jimmie there expert bringing engineers led to his career and financial management teacher for the past fifteen years. At western run decoy she gave us some insight. And how we start that conversation went there. These sunglasses. Sing us out with that's no problem. I know what if it's different tours I'd cash it OS only be old lady in the room here but I feel like before hurt. When I was only went to high school together I don't think the older one can always enough I don't remember when you were growing up it was. I once I save I buying and now it feels like it's more roads I want. I need it I'd buy. As a parent I think that's the high school kids that that I teach anyways I think sometimes they the issue there is they're so used to having. You know the brand means that the cell phone and I think the difference now though and that Amy and I could be wrong and I just. I teach high school so you know I'm not an expert in psychology here and yeah on those lines but I think wind with two parents always work gain. You know you have a little bit more accurate in cognac and so in their four or sometimes it translates into. You know mom or dad being a little bit more her. Generous than a lenient in generous on those things so there for a kid will be able to have. Nike shoes and and not that they weren't Nike shoes but how many pairs you have yeah you know there you know that I. Cell phones just the expense every month. Of those things we have you know a little bit more money in our. I nap budget so therefore we intend to use I think we splurge a little bit Murphy feeding into this beast of an unhealthy relationship with money for our kids well I think. That's where a parent pass to. Have a discussion with their kids at ten not just give give give but have a discussion with kids and that's where we come into play as. I think it's a high school level as a teacher my job is to kind of either reinforce or so. There's going to be some home lives where the parents are already having these conversations but. Just like every kid when your mom and dad says that it's a lecture when your teacher says that. The bells go off and the connection gets me yeah so I. I think we're at where good teachers are really good reinforce or of the lessons that are going on at home. I'm being able to relate that back to how many hours you have to work for. Now I don't necessarily think you have to tell him. Salary. It's an issue there because I read an article in this guy was explaining how keen. And his wife wanted to teach their kids the value of money. So they went to the bank and they took out in cash how much they bring in for the month and elated on the table and make kids jaws dropped as they've never seen that much money at onetime I. Then he was like OK so then I started to shave off okay this amount. Those to mortgage this mound goes to yours soccer cleats this goes as an entity and it cues I get DNA told them this is what we have left at the end of the month and that was an. As much of a pile of money he disclosed pretty much everything is that a good well that's. Just remember that a kid doesn't necessarily have the same. Privacy. As you do so if you know you're giving them private information that you don't necessarily want to be published stores set out loud to other people bend. You have to be conscious of that sometimes generalities make a lot of sense that and you know Leon just on your exact dollar amount but if you give them that a general sense of what you making. You tennis at a perfect you can put out a lot of cash and kids icicle but I don't. Necessarily. Think most kids understand the actual value of the dollar. Until they begin to work for. Any money they can start to relate you know that's one of the lessons we talk about is OKC get your babysitting job you make. Five dollars hour ten dollars an hour you know what does that relate to you if you have to pay a forty dollar a month. Cell phone bill or did you know right now every piece of money that they they get in they can do it. They haven't won it yeah so it's setting up those foundational skills on it you know. Do you wanna see if 50%. And then spend the other 50% you know the idea of opportunity costs what did you have to do to work for them money. In order to go off and spend it is it worth. Five dollars every day to go to. You Taco Bell or McDonald's or does it make sense to have the peanut butter and jelly see candidates that didn't cost you as much so let's talk about that they need verses want so how do you teach them and how should we as parents. Teach your kids I think we start to begin to the next conversation at the college level as. You know because usually and living expenses and and yeah high schoolers for the most part has bigger. There living expenses taking care of Draco. You you kind of make it that next move for them which just have hardly been mean it's you know first for most of them at this point it's going to be two or three. Years away so you say okay who's gonna pay for that rent and you you give them all but can you estimate it. I love having them go home and talk to their parents know and I usually pick a couple of the kids that have older siblings and bring have them bring back. Some real top amounts and then we talk about what your first salary gonna look like. What's your first grand look like look what your brother pays look what in the and we start to evaluate the different options. We just have conversations about that begins in the tape so one person might have a sibling who pays 800 dollars a month and right. And then the other one I have a sibling that's like paying 300 dollars and then we talk about that difference of 500 dollars and where can go in what they can do with that. And that idea that. It and we start to set up again met foundational skills bit hopefully Varity started was is in the savings. You know I I I never had enough money to save. Little did you didn't have enough money to save or you didn't. Set it aside before you spent so we asked her about paying yourself first. Set aside your savings don't touch it don't think about it it's never even it's it is if you've never even made it. Oh you went dead in their first that your very first thing that you do and then the next thing is you live off of the Iraq so now you make your rent decision based on. The savings is very tight away now you can put your nano meet your rank decisions or yourself own decisions and you know running the kids elections. This is so depressing I'm like it's supposed to be saying I thought it's supposed to be creating. Keating so you have tour says the mean. You've been asking for choices more and more as you grow. Here's your system. You know that they 800 dollar a month apartments and you fall. But the dollar wanted to 300 dollar one probably doesn't have as many features. Five. With that can you can you do more you know more would that money what can you do down and we just have these conversations but it's not about being depressing it's about. Choices. And he would love first her act is there's a lot of parents who don't do bad I don't think we as a society do that enough and that's why we're in. So much trouble when it comes Dubya look at the statistics about Americans in debt. We think we all need a refresher course on the pay yourself first. So you'll tell your kid OK so they get let's say birthday money because at a certain age they're not even working out press. So at that point in life until they really don't understand the value of money so big birthday money how do you tell them giving you fifty dollars from grandma and grandpa my. At that point would you say well yeah and that goes back to what your most comfortable what they think most people would say. You know anywhere from 25 to 50% should be safe okay. An especially knowing that your cat. So you know your kid about it that you know anybody else so yeah her kid. Yeah I think it's just you may think typically now our US a spender by nature. Or you save her tiny women are self aware. Not the most frightening LA when they get a dollar gonna spend a dollar and that's how safety get a dollar you spend a dollar. You know that typically leads he somebody who's who's more of a Siebert big daddy can. You know they kept the idea I guess save up for got my eye on some things so. We have that conversation. Instead of saving saving is where I went wrong where I'm like OK here's your birthday money and Molina give you this percentage of your birthday money and I'm gonna take the other half. But I don't think he physically see me taking it they know it's somewhere in general I need to give this big jar that they can see in their room. Watching them money good rallies that do you think more effective if they visually see their money growing so. It's a great question I think that. For your little one for any little one. There I don't think they don't get a guy concerts are pretty big so that I think as you get in the middle school but now the conversation about a bank account. Taking them to a bank could mean a physical bank. In it and putting the money end is not a bad not that you do every time but yes every once in a while. Take a field trip to the bank have them goal in width of whatever is in their piggy bank and you know footed in the actual names so they can see it. If you think your kid is. Age appropriate for it you can talk to them about looking for the FDIC sticker on the banks. That's a conversation I have with my. Freshmen and sophomores because they need to know that when they go to put their money in the bank it's safe feel what if they hear on the news that the bank got wrapped. Oh my my money you okay my dad. So we talk about FDIC if they autocratic credit union. They also have the same concept there so we talk about those two. Insurance agencies fear created in the great depression and think heard it mean closed your freshman and sophomores have had a conversation about Great Depression yeah in May know that that money is saved in not talk about it up to 250000. Dollars so. They're not there you know your it's your it's your money SA you know Beck says. To this savings component week we talk about registers a grade area because we have Kodak. And Kodak a lot of the kids have a connection whether the grandparents. That that. Worked for Kodak and Kodak was well known GM I mean there's a lot of fun yeah had pensions. And so that's that was part of this siege first and I think that down there's there's a gap there we had our grandparents meaning he had pensions they they all felt pretty secure that that company was gonna take care of them forever yet and probably right around their parents' generation as when that those started to kind of fall away in the ballpark and our parents' age group had to. Figure it out would not a whole lot of education about fine and yeah and so our kids are that first generation and in the you know the kids. Did you ever take him that yes I have in him not talking big broad strokes here but. Our kids' generation is that first generation that can come up from from all the way through with financial education's the bones to financial education. And know how to set up for retirement without having to have a penchant to act I always feel tellem like I kind of feel bad for. Our our parents generation or my parents' generation really because. They didn't they didn't have the education you are making kind of some dinner items sitting sitting at La but brain really didn't have. Mean we didn't teach it in a wasn't widely available the Internet wasn't as strong is that what you couldn't is gloom and AMP so you know I kind of that that idea when we moved away from pensions is really put us you know. At a difference in the climate for these kids it's gonna be really strong that they're gonna have to do it on their own. And so really. Give them those tools by telling them. You know here's which need to be need to learn to pay yourself first you need to forget about that money you need to. You you don't touch that money that money ten days there forever and you budget based on. Based on the rest may say about two to 10%. To get you can really use a guy anywhere between the two to 10%. Is what they should save automatically. Never touch you've seen a teacher for fifteen years at west around cried and kudos to west are on cries for even offering a class like that every parent says it why don't they teach this in school all we were never taught in school while they teach in school. Is this a mandatory class in every district or is this. For the most part they do. Near state requires a a basic unit on personal finance you know I really can't died and it's it's only one unit they've got a huge curriculum so it's it doesn't died and everything. And it doesn't real basics and then what. Art class does and in erratically is it in really. Blows each of those components up and we really talk to them about you know and I'm not a financial advisor side just in us India day that out loud. What I do is I give them the ideas for them to go win that information and go seek out you know professional advice but to get it in there. Their head to CN thinking about it to take a couple of Scully kicked. How the kids it's not it. Think if you can take a nugget from each of the units and then you can make decisions based on those those financial nuggets. I'm so most district some of them haven't as a required class. Most don't have any as are my eighteenth someday there will be heart it's unfortunate that it's not. The graduation requirements and these kids just means youth you see it you'll hear it. These kids are just bogs down they have so much that doing so much. They're involved in so much there I mean they're an amazing generation they're just stick gold get a multitask yes they're amazing yeah. Even though I you're stopped they're great I mean they can just they can do it all on the and finance classes are still dropping. To the bottom of the priority list which is unfortunate do you ever see this. The pendulum idea. You know I would have. I'd have to say probably not. I think that personal finance is just one of those things that kind of has started home. OK I'm so I think that that the parents that push in their kid into a personal finance class sees the value. And I saw the kids is nothing that I am telling you that you can't find the answer to. Outside of it this classroom so I'm here I'm a resource I'm giving you the basics but everything that I'm saying you find it. So he was Arnie you remember that we had the conversation then you know five years from now when your company gives you a 401K match. Go don't be scared of it is I think that's the non loan half the black with finances as we have these big scary terms. No probably a lot of experts Alec app that's scary the first kid and for a regular person who. You know it's just doing their regular job yes sound like scary concepts in it's easier do we know our. Then it is to piano go in there and do their research or ask a question. And I did you know these kids get their first job offer and based they're getting these all these forms in. Jury member Rick I remember I remember being so like I better be in the past he's furious. I got to do everything right and I want to ask them questions so you know you got to borrow one came match you barrel no I don't need that so we're. What we're doing in in classes OK remember that word that's the word and then that's the scenario where go to Google. Look it up really quick you can find everything that I am telling you just don't just say no. Though that action stuff and do you know research it's out there it's not. It's not rocket science it's nothing that you can find the information don't be scared by it. It's because it's fear of the unknown craft right there some adults your right that are scared of the farm intact. Or they have misconceptions about borrowing case in which sounds scary. Yeah it doesn't is that what the art brought in any you know any. Where it's an industry that doesn't help itself IRAs Roth there is far on case for a three Beason and if I just for and do right drama on the list and act. You know on the board and I'm like look at kids. Per kid there it. Is all about it it's like another language overwhelming and so you just start to break down each fun. And then I give them in the order in which they should do it men. Usually jump up and down at the ones that I want them do that's OK so tell me you can jump up and down once those are the ones that we as parents should probably jump up and down as well so saving big get money for however they get their money from me they're working or from Graham on Graham. Save a percentage great we got that in two to 10% usually you should set aside. Obviously when you're younger the closer to 10%. The batter can OK can live without it now you can live without it forever. And especially if you make him more money you're just more comfortable with just keeping it a set aside right okay so. But of course. Everybody's different so we have yet it yeah it can't go let's say everybody ST 10% so it's it is at least they have the concept of saving. OK so then the next jump up and down thing is need verses why because they know you have those discussions in your class right step. So what is what's truly in need and in a high school kids mind you know Nike sneakers are need until we have the discussion okay one sneakers. 150. Dollars or a hundred dollar right are they really in media and how many pairs of those do you need that because those. Kind expensive so we have a conversation about a need would be shoes or sneakers and not necessarily. You know of the nicest ones and same thing with close you know would. Again another this. The generation. Is up it definitely knows its marketing and knows it's Selena so. You know how many of those buying the name and how much money goes to that so really the watt. Is when you get into those extras. Buying lunch vs bringing lunch you know you can save a ton of money by. Bringing your lunch noon every day to school and verses you know bowing out in in in Iran letting you know. Musical for Delray at the corner and they know every day that's that can add up to be at a premium expense so talking about those things like how you can. Shade in in really that leads you directly to the budget which is. Yeah you don't have a budget right now because but your parents do so let's talk about the budget that's nice that. We go home and I have and talked to their parents and talk to their siblings and trying gets a realistic numbers on what an average. Households. I'm OK so it looks like you should communicate we get kids about the budget not necessarily solid numbers may not because like you said privacy whatever but. Just the concept of OK I'm paying the mortgage right now around she sit next to me well I pay these bills because you might not even realize. That there is a foam rail track there's a credit card builders and mortgage in practice our Jeannie. RG knead your your kids even think about you guys Jeannie don't hurt right water pay for water garbage. Yes he's yeah he's that OK they just rightly so they just see this yeah those are our normal. But we know that there bill so we. We list out those those ones and we talk about you know where you can. Where you can kind of shave Voss and Mike exec had a needs vs wants you mean an apartment may be right you don't need any hundred dollar apartment union an apartment. So we talk about ways to save they're deep get a roommate. Well I can't possibly have roommate no one I don't want to live with anybody. That's fine then know that that's the extra money than what you gonna live without you know we talk about cable TV this generational lap times are diplomatic cable. And they do that it's so but that's you know for that at the cost savings. Get a lot of false means of what I you can convince yourself that you need a lot of things the cellphones a perfect one they need a cellphone. Yeah you don't need. They need that fast is cellphone tell you don't eat itself might newest cell phone and then that leads to another one another big one is so here's your budget. Set aside an emergency savings and so we talked about having an annual savings as soon as you are. College it it it should start that idea savings especially if your your college students having. A part time job nuns and start to test build up just a little bit of savings. But they say between three to six months of emergency savings so ivory for household should have. A little account. That's three to six months of your bills that set aside. As we talk about you know your first apartment. And your car and all these expenses that go into the budget and then adding an up and having three to six months and a tone it doesn't grow on trees you're not gonna BO bill. Three months up. In one month you know yeah this is something that's going to be a slow process here but it is one of those big nuggets that you should take away from the S class which is. You don't eat you need to have. Which there's going to be life expenses. Knowing banged those are what's sometimes put people into credit card that. And it's not he didn't do anything wrong it's life happens there are to him emergencies and liked it just happens. That it takes discipline. Because when you want that whatever it is that you want you have to just pretend you don't even have that money back an emergency money back. And in this is another thing that I tell my students when you're going home and you're having conversations with your parents and if you've made a mistake I Tom about all of the mistakes that I made in me because that's how you. Well and happy about that tell you how are honest and I okay teaching them what you've done wrong so I mean I have not perfect actually never. At night and didn't go to school for. I'm teaching I went back to school to become a teacher so this is a second career really for me and I lots of mistakes and I. Oh are great out there and talk about my mandate so I don't think you should feared. Having that conversation with your kids about what mistakes you've made. I don't think you have to scare them in your approach on how to say it. But I think these are things that happens to you talk about what would things you've done right what things you've done wrong and and you know he had helped spur that conversation and they they get talking so. You dedicated your time to this podcast so we're gonna give you year return on investment. Here RO why what are some takeaways some things that we as parents can do today or at least seriously consider I think. Having conversations. Is good at that very first thing so no matter what it what devices out there. Just always having money conversations don't pretend that money isn't. A topic can the guy is in need it big kids are serious about it at an all ages the big ones is you know. Pay yourself first get into that habit of saving because if a kid can save starting at eighteen or nineteen years old. They can and and I Shawmut calculator you can find him right online. I'm if you save at eighteen or nineteen years old by the time you're 65. You can be a millionaire. Now obviously that depends on the market conditions yeah a lot of things but there's potential there so you know. Go online finalists money calculators and look at it and talk to kids about their needs a verses their wants and then we talked about decisions if you delay by five years if you delay by ten years. If you don't start saving until you're thirty. What they had different so that an outcome and is and it's usually. Usually half to it's a significant 40% of the money as it is gone just because you would talk about it's it's count pounding money making money more you. Rather than you having to work really hard for your own money. And the money were you aware that your money work field but the only way networks is that they start early. So as early as they possibly hand it's always on their mind that first I have to pay myself. That I know I'll make my budgeting decisions and we also think that way and that's why we do this because it isn't impossible. To get there now it's just financial independence is what I always say we have to strive for financial and a pet. And ends where we're working because we want to net because we have to correct. We really need to start talking to our kids in order to send them up for financial success Geneen lent west around quite high school career and financial management teacher thank you so much for joining us today. And having conversations with their kids we also need to encourage them to. Dreamed they think big work hard even for us as adults you may have all these great ideas in your head of things that you want to do ways that you when I heard some extra money and the size and next week will help you put those ideas into motion we'll have Deanna I'm asked creator of brows deep I'm Monroe avenue here in Rochester took her passion for browse sculpting and turned it into me profitable business here ready to get inspired. Next week and seven figures.
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