Episode 43: How to Teach Your Kids About Money

ABOUT THIS EPISODE

Parents should teach their children about money while they are still in the home. Listen as financial expert John Browning shares some practical tips on using allowances, chores, and helping children learn to set goals can equip them to handle money properly.

Welcome to the build your life podcast with John Brownie. Build your life as a relaxed and unedited conversation with financial expert John Browning. John's the founder of Guardian Rock Wealth, with offices in Hawaii, Colorado and Illinois. John's also the author of the book build a life, not a portfolio, a guide to your financial future based on your personal values, which you can purchase on Amazon. Or stay around to the end of today's show and I'll tell you how to get a freak copy mild right to your door. I'm Michael Dlan, your host for the next few minutes as we chat with financial expert, business owner and author John Brownie. Hey, John Brown and welcome to another great episode of Your podcast. How are you today? I'm doing fine. I'm doing really well. Actually, glad to hear that. Love your new outfit. That looks really good. I like the casualness of that. Absolutely trying not to get too formal here, because you know what lifes to short...

...and we're all about bill your life. It is we're you know, and just we got to be inviting and involved. So, anyway, speaking of involved, you're a parent. You have a few kids and six you've got to be. You've got it six kids and you got to be involved in their life at and in a number of ways. One of those is preparing kids for their financial future. So I want to talk about that because I've got four children to her, are grown into are still in the house. What are some what I would call tips, tactics or takeaways that you can teach me to teach my kids about having a good, solid financial future? There was a lot of tease, but you're in. I've had six kids and I still have six kids. And Yeah, I want to make that claric got rid of walk because I didn't like him. It's like Bill Cozy said, I could you know, I can make another one just like it.

Take that. So we've had we've been through this from from age zero all the way up to twenty seven is my oldest, and and all of them are out on their own except for one. She's fourteen and we're doing our best to teach her some of these practical incivals and to peas there practically. Yeah, and some people were going to disagree with me on some of these points, but kids and everyone else learn from not what you say but what you do. So that's one very important thing to keep in mind. So as you're going through your finances, you know, it used to be we would balance our check books as given, showing my age. Now you don't do that anymore. That's a check book. Yeah, that's a check. Like I still write a check every once more I need to. But we would, you know, my dad would sit down and he be balancing...

...his check book and I was pretty small and I would call him, so, what are you doing? Then he said, well, I'm bouncing the check book in. This is how you do it. There's ways to do that in this digital economy as well. Now, maybe you don't want your kids to see you know exactly what that is, but explaining the concept of what you're taking as an important time and you're doing is really, really important, because they see you do that, and the younger they are the better, when they see you working on that and looking at your budgeting and planning and all the things that I like to talk about. So and that's good because, yeah, you don't like this, you don't want to keep it a secret from your kids. And how many people do that? So maybe Yep, to so many parents who are just like, well, that's none of their best ness. It's like what Yo it really is, and they don't necessarily need to know certain things. Right. They don't need it because you know kids will say, Oh, my dad makes UX number of dollars.

What? That may not be. Okay, right. I mean by but explaining to them in the way for their age group, how they will understand, is don't keep that a secret. That's right. And here's one practical tip. I don't know if you're going to get it, but I'm going to give it, is when you go shopping with him and you swipe the credit card, you walk out of the store with this bag of goodies, make sure they're there a month later when you're writing the check to pay that bill, because a lot of them just think that's like a free thing. I want one of those. Yeah, I want one of those cards where you just get some great and you know you'd be so we laugh, but you know, if you're ten or ten, eleven, twelve, why would you not think that that's right? You just have to have a card, one of those that I want, one of those things. You got to remember how they perceived the world. They haven't had your experiences yet, so it's very important. That's a great practical tip. Good job on that. You, thank you, thank you. I've learned so much from me. I just got to give it back. What about? What about some...

...other things? Yeah, another thing that I see all the time is this idea of and I realize people are going to disagree about this, but the whole idea of an allowance. And I'm not a fan of giving kids money. We had a chore Wheels In our House and the first shore was first shore you got was that was kind of part of you know, you get to live here and that's hard to be in the family, right. But if you wanted to do something extra, above and beyond, then we were willing to pay for that. And granted, we overpaid because we wanted we wanted to get have them experience, but there was still an element of I earned this. Yes, first of all, they're they become kind of proud of that, and they sure, because that carries through to adult life. Right. We go out, we earn and then we spend a resaid, right. So I'm not a fan of just here's ten bucks a week or whatever whatever it is it's. Then they begin to think it's for it.

Well, it's entitlement. Yeah, here's ten bucks just because you live and breathe and you're my kid. Right, I'm with you. Yeah, I like that. So very long time ago we put our young kid, when they were my boys, when they were young, grown up, on a commission scale, kind of doing the same things. Say, here are a bunch of ways you can earn money around the house. You can wash my car, you can, and each one pays, you know what, three bucks or two bucks or whatever. If you want to do it, great, if you don't, you don't get the money. Very similar what you're saying. They had chores, but then this was over and above but we didn't make them do it. They had to do it if they wanted the money. And the other part of that, too, is when they asked for that. You know, I'm show my age again, gi Joe, or maybe it's now it's Sony, playstation or whatever it does. Don't don't go buy it for him, don't give it. You know what. This is why they earn their money. And if they just get stuck because they asked for it or they wind a little bit, that's all kids tend to do, then that's not really teaching them. Yeah, and some of the...

...old scene. Everyone's while my wife is, you know, I'm still waiting for our Ferrari from the last episode we did. John. That's right, I want to wind just a bed here and well, so let's make you know that. Other thanks. Yeah, some other things about that is so, you know, as you as they get some money, you know, coach them on how goes and maybe even set up some pretty hard and fast rules, like ten percent of it maybe goes into savings and explain to them on savings is for. Savings is not to you know, dip into when you need the Sony playstation game or the xbox game. This is savings for something that you might need in the future. Maybe that's an education or whatever it might be. And you can help them then. Remember these are kids. They yeah, you need to coach them right there in a different playing field than you are. They have an experienced life. So you explain to them what you know I need that they may have because mom and dad's a play all their needs, right, right. So you explain that to him...

...and then maybe ten percent goes into savings for something that and have helped them set their goals. I want this xbox game and try hard not to say such a waste of money. Try because they are kids, they have different ones than you do. So let them have that. And then the rest of maybe it's ten percent, maybe it's point percent, whatever you decide as a parent. And then the rest of that money, you know, it's okay if you want to go, you know, spend that on on one whatever it is that, as a kid, brings you joy. Maybe it's a such your role or candy or whatever, and you cringe because there's wasting all their money. That's right, but allow them to have that joy. Otherwise it really crushes the spirit. Right, just like in our own adult planning, allowing ourselves to do whatever it is it brings our USU way, whether it's getting that cup of starbucks or whether, you know what a getting that pair of shoes that you've been wanting, whatever it might be, allowing...

...ourselves not to just go to work and slave away every single day and I really see any results and just be looking way off into the future. Allow them some joy that they've learned themselves. Yeah, and that's good, and that helping them set goals is a really cool thing, because that's delayed gratification. Can make you work for it and then when you get it, they're gonna appreciate it a whole lot more. Right. But you need to help through them because if there anything like me, they're gonna get about, you know, four steps into that goal and say, you know, I'd rather have the single mayor. It's like, well, that's okay, but that's a choice that you're making, because we do that all I do that all time. Yep, and I've even, you know, as my kids got older, just just sort of in a side is. You know, they needed, they needed, truly needed transportation. They didn't have enough and and you know that, I get that, but because they don't have the opportunity to earn it. So there have been an even with a for me,...

...for our family with six kids, a full ride to college is a little tough. So what we had, we had you get half a ride. Yeah, the rest of you have to come up yourself, and that's kind of what we did with with the automobiles as well. You get that. And then one of one of my kids, you know, sort of you know, he outlived that car and he didn't have his credit built up quite yet. Need truly needed another car. I financed it for him so that he wouldn't have to pay twenty one percent and dressed good name car when starts in Twenty Charles Night. But I made him, you know, that was the agreement. And you know what he did it? He paid me back every penny with interest and and that's the way we worked at so, you know, helping out your kids is different than just giving them things. Well, it's good and that that yeah, we won't even talk about this very long. My inlaws had a had an adult child, moved back in with them right and shortly after college and my father in law charged him rent to...

...live there. But my father in law took that money every month and stuck in an account and when when he was ready to go buy an apartment, get a rent apartment or by a house, he took him father and I'll took that money said here's your down payment. So he was paying money for rent, but my final law did something else with it to help him out financially. I kind of thought that was pretty brilliant. Yeah, that's a that's another way to look at it and it's a way to you know, do want to give your kids something? That's a great way to do it, especially when you don't tell them about it. That's right. They realize later, wow, what a great thing my parents did for me there. Yeah, appreciate it well, I and these are great tips and I think the the principle behind all of these, underlies all of it, is as parents we need to teach our kids. We really need to teach them about finances and start small, but have a plan and equip them so that when they leave your house when they're eighteen or nineteen, they go off to college,...

...they're not cloles. They have a they have a they understand about money and I know my kids. When they were like seventeen, they start getting all these credit card offers and I would intercept that mail and throw away. You don't need that right. They all wanted them, but understanding how the credit card companies working, why are they sending all these things? For me, genre girds great money making thing for the banks. They awesome. They are the bank for the bank not breathing. It's right. You end up with a lot of toys and a lot of debt. And I mean we want him go. We need to do a whole episode on credit card, but that's another issue. Teaching your kids about planning for their future. Yeah, well, actually, you know what that now you know of the next episode probably is building your credit. So the idea that that credit cards are just nasty little things but in some ways can be a necessary evil to build credit in today's society, not that you use it, but that you have...

...it when you absolutely that. Yeah, I just I just wrote that down, took a note because I want to talk about that and because we hear a lot of times that versus Debo cards. Just do Debo cards and cash apps and all these other things that I've always wondered. Where's the balance there, because I'm sure there's a bounce. So I love listening into that and an upcoming episode of building credit. Where does credit card fit in the and then what? When? When, and how should you use a debit card or a cash APP or whatever that thing is, and where is the balance? That would be really that, really a ground it. And these new innovations are great and they're wonderful, but do they help you build your credit yet? Are they there in the you know? So, yeah, well, we'll do that. That's a whole different episode of your right. Okay, well, we'll we'll wrap this one up with the tips, tactics and takeaways to protect your parents pocketbook. How about that? Will just be thrown...

...like it, but but really teaching your kids about about their financial future and and equipping them with what they need from really a young age, helping them understate and money in finance INS and out, and and how to delay gratification, how to set goals allowances. We talked about a lot today. Go back and listen to it and then just reach out to John and schedule a call with him, and it's just one of the many parts of wisdom that he will give you as he helps you build a life, not just a portfolio, so that you'll be able to live the life that you want now and later. All right. Right, so, John, thank you for your time and that was a great episode. All right, we'll see you next time. All right, take care, buddy. Money really is a big part of our lives and John Browning can help you and your family learn how to keep money in the proper perspective. It's important, but it's only a tool that could help you build the life that you want. If you like, John Emili a free copy of his book build a life not a portfolio. Go to John's website, Guardian rockwealthcom, and click the contact US...

...link and send your request. John Will Mell a copy of his book right to your door absolutely free. Thanks for listening to building your life podcast with John Browning. Be Sure to subscribe to this podcast so each new episode will be sent to you automagically when it's released. Have a terrific day.

In-Stream Audio Search

NEW

Search across all episodes within this podcast

Episodes (128)