What do your kids know about money? Jen Hemphill, host of the podcast, Her Dinero Matters, shares tips from her experience as an accredited financial advisor and as a mom. Learn how to talk about money with children of all ages and how you can help them to become financially responsible.

Resources:

• Listen Jen Hemphill’s podcast Her Dinero Matters on all major podcast platforms
• Explore Money As You Grow, a resource from the Consumer Finance Protection Bureau to help parents and caregivers talk to kids about money
• Get more tips to help your child become financially responsible  in “Adulting 101: From Cooking to Credit Cards” on PTA’s Our Children online magazine

Helen Westmoreland: Welcome to today's episode, I'm Helen Westmoreland.

LaWanda Toney: And I'm LaWanda Toney. And we're your co-hosts.

Helen Westmoreland: And today we're talking about money, whether you are a spender or a saver or somewhere in between, money is a huge part of our society. So how can we teach our children about money and how to use it responsibly?

LaWanda Toney: It's a great question. Also, who should be teaching our kids about money? Is it the parent's job? Should schools have a role in financial education? Maybe it's a combination.

Helen Westmoreland: We are going to get to the bottom of that and much more today with our very special guest. We are excited to welcome Jen Hemphill to the show. Jen Hemphill, a military spouse and proud bilingual Latina is a Latina money expert and accredited financial counselor, author and speaker. She also hosts the award-winning podcast, Her Dinero Matters, which focuses on the advancement of US Latinas to minimize the gender wage gap while creating a healthy, confident conversation around money.

She has been featured in publications, such as Forbes, Oprah magazine, and many more. If that's not enough, she is also a mom, herself of two children, welcome to the Jen.

Jen Hemphill: Thank you so much Helen and Lawanda, I'm really, really excited to be here, especially talking about money, especially talking about financial education in schools and our kids is just so very important. Because, as kids ourselves chances are nine times out of 10 parents didn't talk to us about money. So we need to start a cycle of talking to our kids about money. Absolutely. Thank you so much for having me.

Helen Westmoreland: Well, thank you. So, tell, we like to start off with a little bit of background. I think you teed it up. Why are you so passionate about financial education and, and how did you get into that career?

Jen Hemphill: Well I've always really enjoyed the topic of money, and I think a part of it was because growing up, I was born in Colombia and it was a time where the economy wasn't very good. My parents were both college educated and my dad being a foreigner he's, he's American, had a difficult time getting a job. So finances were very, very stressful and I always heard we can't afford it. We don't have enough money and it was just really some tough times. And seeing that I was that kid because they already told me, we don't have the money, I didn't ask my parents for money or very rarely, I can't say that, cause if I had them on there, like they might, they might say differently. I'd like to say, very rarely did I ask for money, because in my brain they've told me they didn't have any and I saw them struggle.

I saw the hardship. And so for me, it was very important to me to find that babysitting job, get money and earn that money. And I always vowed that I wanted to be in a better financial spot when I became an adult. And so, that was a part of it. And then the second part, you mentioned, I'm a military spouse and for me was just very important to have a career, but because I knew my husband and I wanted to have kids. And being military, my husband would be traveling a lot. I wanted to make sure that I was at home with my kids, so I wanted to have a career, but I want it to be at home what it looked like? I didn't know. And eventually it led to this business, in a nutshell.

LaWanda Toney: So I want to talk a little bit about how we demystify money for kids. Like you mentioned at the top that, when you were a kid are a lot of us, our parents didn't talk to us about money in they didn't talk about it a lot. We might've heard them having conversations with each other. Or I remember asking my mom for something and she said, no. And I was like, why, why can't you just go to the ATM and get it? And she's like, you have to have money at the bank to be able to withdraw it out of the ATM. But never really explaining money. Why do you think that is?

Jen Hemphill: I think because as parents, we tend to think we're not good with money. And we may tend to think who are we to talk to our kids about money when we've made all these mistakes? Or maybe the finances are tight or maybe money is such a stressful topic for you. It could be any of those things. But, I think it's really important that even though you may not be perfect with money, who is?

Even with the mistakes that brings value to a conversation with your child, because from your mistakes. From being imperfect, you can be open about it, even though it's scary, but it's okay, you're human. We are all human. And in being able to talk about those mistakes, how valuable it is, because you already are seen as a hero in your kid's eyes. And then, you putting yourself in a spot where you're human, it makes your kid, I think really appreciate you more because you're not perfect. And kids, when they're little, they're getting into trouble a lot and making mistakes, because that's what we do.

But I think it's just really important to do you at this time with what you know. And not be afraid to talk about money, not be afraid to share those mistakes. Oh, we kind of overdrew the account. Okay, how did that happen? And share with them why, what the cause with that and that from there they are learning from you. So I think it's very valuable.

LaWanda Toney: Yeah. I like that.

Helen Westmoreland: That makes a ton of sense. One of the other things, LaWanda and I were remembering that makes the money conversation hard. It's like when we grew up there was a lot of physical money, right? Money felt very tangible. You knew what it got. And now whether it's cryptocurrency, or are these like other monetary like things and games and otherwise, like it's a, it's a more abstract concept. How do you suggest parents get underneath it, when money does feel kind of unreal in some ways to kids? Should we be taking money out of the bank and doing like what we did growing up? How have you seen things change and how do you suggest parents address it?

Jen Hemphill: You need to know your kid best and you can definitely take out that cash. I think there's value for sure in that. But because we don't live in that world, there's value in seeing that cash and having them spend that cash money and understand that process of spending and how it's minimizing the money that they already had maybe in savings. But there's also value in making sure they understand this digital world of online banking and the best way to do that is them having a budget.

It can be super simple. If they receive allowance, their income is their allowance. And you can create really simple buckets in that budget that can serve as their categories. Is it for savings? Is it for saving, spending, it could be investing, right? and then having and using whether that debit card, there's all sorts of credit cards too, that are made for kids that are aren't credit cards, but it's literally the parent putting some money into an account and they're using that.

So there's those types of tools out there that you can use, but allowing them to spend, to fall on their face, because this is the time, if they make mistakes that you're there to pick them up and making those mistakes right now is valuable. I mean, can you tell them all about making mistakes, but it's really valuable for them to see that because it's how they learn because we do live in a digital world, they need, they need to understand how that works. And how, of course there's not a lot of writing checks anymore, but really understanding where, like, for example, when you write a check, that doesn't mean the money has already been taken out right away until the check is cashed and, because sometimes we think, oh, there's extra money. You forgot that there's still a check that hasn't been cashed.

So I think it's a combination of those things and just knowing your kid as well, in terms of what they're ready for. What sparks their interest at this time, because what sparks their interest is what they're ready for, right, especially when they're asking these types of questions.

LaWanda Toney: Yeah, no, that makes a lot of sense with my son, his interest does help us have that conversation around money, because it's about the gaming. Adding money to games to do certain things, and so yes, the games. This makes so much sense because Caleb's interests right now, of course, are games just like any other nine-year-old, adding money to the games to be able to do a particular thing or a skin or something like that. So he's always asking for this, I call it invisible money. And, and he support, so for holidays, he's asking for gift cards and then now debit cards and saying that we owe him, because can we add money to this card or things like that.

So I love how you said, be able to educate them about money with their interests, because that's what would keep him more engaged than me physically handing him some money, putting money on his Vbux card makes all the sense to him.

Helen Westmoreland: So at the top of the episode, we talked about this big question about what are, sort of here, what should parents be doing at home to help their kids better understand money, but also what should schools be doing? Jen, what do you, what do you see as those roles?

Jen Hemphill: There is that discussion or debate parents should be teaching kids about money, no schools. I think it's both, because one, we need to start that cycle. And with school, some schools, they have some sort of personal finance component, but it's interesting, in my son's school, because he graduated from high school last year, they do have that. It can be self-directed or if you're taking economics, then that covers that piece for them to be able to graduate. So is that really enough? Is that what that self-directed component be enough? I don't think so, cause I think you need to talk.

I think going through a course, yes, will it be helpful? And so I know I'm going around the loop with this. but, school should be teaching real life concepts, like the importance of saving, what debt is. How to use a credit card, because there's nothing wrong with using a credit card, if you're using a credit card responsibly.

What a credit report is, what the purpose of the credit report, taxes… Teens get jobs. Do they understand their pay stub? Do they understand? Okay. I was supposed to getting paid this money, but all of a sudden, a good chunk of it has gone what happened? I think those type of real-life concepts should be taught in schools. Because, I know my son now that he's in college and he's learning some real life lessons, and I've been helping him along the way, he's like, why didn't it teach us in school? Why didn't we hear this versus being taught X, Y, and Z.

But I think, parents should talk and what parents should teach them is their experience. Values are important, in the conversation of money, how to be a good saver, but beyond that, what has it done to them when they saved? Right. What has it done for them when the parents spend responsibly? Why is that important? Like the parents will be able to take those concepts and give it a more personal flavor if you will, because the kids will relate to it. So I think both sides have a role, because the schools, the parent's responsibility yes, is to get them ready for adulthood. Right. For the real life.

The school's responsibility is to educate them, and I think personal finance, I really think on both sides have that role.

LaWanda Toney: Well, I think that you're right. It's kind of a part of college prep, because I mean, we've all went to college and I don't know about your campuses, but our college campuses had credit card people reps and yes, free t-shirts

Helen Westmoreland: My first credit card wasn't like from my university. Right. Yeah,

LaWanda Toney: Totally, and no one really gives you that instruction of what to do with it once you get it. We've all had to learn those hard lessons. So I think that it should something that parents are responsible for, but also a part of that college development, college prep, in the school.

Jen Hemphill: Absolutely, and it could be like the school teaches the concept and the parent continues a conversation at home with that concept, whether it's the taxes or what's on that pay stub, how to read this pay stub.

Helen Westmoreland: You, gave us a good list. I'm like, I gotta write all those down.

LaWanda Toney: No totally. Some of our listeners wrote in and gave us some scenarios or some love some help with.

Jen Hemphill: Absolutely. Let's do it.

LaWanda Toney: Yay. Let's do it. My 14 year old started babysitting and he already wants to begin saving for a car. I want to encourage him, but I'm not sure what a responsible goal for him to set, how much we as parents should chip in or how he can even start the process. How do other parents handle this?

Jen Hemphill: In terms of shopping for a car, if a teenager wants to save for a car, I love that this teen already wants to save. That first of all, that is awesome.

I think the first step would be to not necessarily go to the dealer. You can buy cars online now, we're so advanced nowadays, but shop in quotes for cars, window shop. If you will, for the cars to see what kind the car the kid wants. So that way you have an idea of what kind of car, what costs talk about the car depreciation, maybe the car. I know my oldest, when he was talking, I want to buy a car. He wanted to buy a Corvette, and a brand new Corvette. And then we had conversations about how much they cost. And why would he want it new? Why can't he get a used one?

Eventually, he understood, that cars depreciate. So you want to have an idea and in front of that have conversations, okay, you want this car, it costs this. Why do you want this car? But you want to also be realistic for you and your kid and your teen. Because, besides the cost of the car, you, cars and need maintenance, they're going to need after the cars purchased the maintenance, the insurance, gas, if you want to go anywhere with the car, right. And so you want to be realistic and you want to work backwards with what the cost of the car. And you want to have a conversation with your partner of, okay, is our child going to be responsible, to purchase the car? The full costs, to pay the insurance, which we know, oh my goodness is sky high. Are they going to be also responsible to maintain the car, put gas in the car? It's a lot for a 14 year old.

So having that discussion with your partner to see what would make sense and be realistic? For him or her are and, and then from there, decide what, how you can help financially if that's what you want to do. But they need to be aware, beyond just buying the car, there's going to be maintenance and there's websites where you can look up, okay. The maintenance schedule, and then from there, you can look up for T for changing the brakes, X amount of miles, how much do brakes, typically cost? So you really want to have that realistic conversation, but not, but make it doable for them if possible for your finances, because you don't want to put yourself in the hole.

So after they buy the car, what kind of monthly income are they going to continue babysitting? Would they need to just for gas in the car or whatever, you all have decided and agreed upon with your, with your kid, that this is what will help you with, but you are responsible, responsible for A, B and C. So it's about looking at the whole picture, but really seeing where their head is at.

Helen Westmoreland: I have a follow up question to that because I had a job really young. I feel like I learned the most about money when I was earning money. And I had to decide what to do with it. And it felt very real. And I had things I had to pay for And what is your general advice of that conversation I have with your kids around earning money and how to navigate that responsibly?

Jen Hemphill: So I love that question. So I think when your kid is interested in earning money, I think that's a great thing. Cause, I think they're ready for managing that money. You need to have a conversation in terms, definitely creating a budget, a simple budget. So what is their interest? I think saving, and if they're ready for invest, even if it's just a little bit, have a conversation about their goals as well. So why do they want to work? Why do they want to earn money? What is the money that they're earning, gonna go to those conversations that will help you create that budget.

And really that's simply it. It's just creating a plan for what that money is going to be for. And having that understanding, because sometimes kids just want to earn money because, oh, I just want to have money so I can spend.

Helen Westmoreland: I think that's usually the driving factor for a lot.

Jen Hemphill: I think another fun conversation would be is okay if you're earning that money, let's say, and they, you can fast forward their lives till let's say when there are an adult, what does this translate to when they want to rent an apartment? And have the utilities to play, to pay, have those kinds of scenarios for conversations. So they understand how far the money that they're making right now goes, or doesn't go. So I think that's another thing that you can do that helps them think ahead, even though they're not going to be renting an apartment right then, , but I think it's helpful to understand, have these real life scenarios.

Okay. I'm making this amount of money a month. If I had an apartment and I had utilities, there's even games online, that you can plug those numbers. Oh, this is how much money I would have left after I pay all the bills. Oh my gosh. I don't have enough to eat or those types of things.

Helen Westmoreland: Hmm. That's great. Thank you, Jen. We've got one more scenario for you. A dad writes in, I really want to get our 17 year old, a credit card. But my wife is nervous. What advice do you have when it comes to teens and credit cards?

Jen Hemphill: We've done this with our oldest. We haven't done this yet with our youngest, yet. Add them as an authorized user, definitely it can help them build their credit. I think the first thing, well do you want to have a conversation with your teen? Like if you're contemplating this and haven't decided, and you can say, Hey, John or Amanda, we were wanting to add you as an authorized user to help you build this credit and why this is important.

But if we do this, this is what the card can be used for and what it cannot be. I know in this scenario, you mentioned emergencies. You need to define what an emergency is because when I hear this scenario, I want to use a credit card for emergencies, in my mind, being that I teach personal finance and I coach around this.

I'm like, you should have an emergency fund. You don't shouldn't, you don't need it. You shouldn't be using your credit card for emergencies, but it could be the type emergency of, your kid is driving. The car stopped working and they had to pay A, B and C to get them started, and they needed that credit card.

So that's why it's important to have that conversation. What can the credit card be used for and what it can't. You can set spending limits, so that will help. So therefore, if you have a credit limit of 10,000, your kid is not going to go crazy and spend 10,000. If you put a credit limit or a spending limit of $200.

So you can that. Okay. If the wife and the scenario is nervous, create a written agreement, and both of you sign it after you have those conversations of what the credit card is for, why you are doing this, because then you have the conversation on credit and the importance of credit.

But it also teaches them some good spending habits of when to spend or when not to spend, or you can even talk to them. If you want to spend on clothes, if it goes over this amount, you need to talk to us first before you swipe that credit card, for example.

It could be that the credit card is only used. I know for my kid in college right now, it's only used for things like books. But other things, he has a certain amount of money that he has to manage, and that has to be for clothes, anything that he needs, but the credit card is very limited on what he can use it right now on.

Helen Westmoreland: That's good advice.

LaWanda Toney: That makes sense. I love it. Let's see. So if our audience wants to learn more about you and your podcast, where should they go?

Jen Hemphill: Simply, Jenhemphill.com and you can find the podcasts and how to follow me all on that website.

LaWanda Toney: Awesome, and do you want to go ahead and share your social media handles?

Jen Hemphill: Just Jen Hemphill, if you, on Instagram, Jen Hemphill, Twitter, Jen Hemphill, but with an extra L don't even let me tell you that story. And I accidentally typed too fast and I hit enter. I haven't been able to change it, because there's another Jen Hemphill. Twitter is Jen Hemphill with 3 L's.

Helen Westmoreland: It's memorable.

LaWanda Toney: It is. You won't forget it. I'm going to go look. And then also, if there's one thing out of all the things that we've talked about today, one thing you want parents to walk away from today, what would that be?

Jen Hemphill: To do you, and really talk to your kids from the perspective of what you know, that you don't have to have all things perfect. And just trust your instinct as to what your kids need from you in terms of money. Just trust your parental instinct because you have to be calm. I know money is sometimes it's hard to be confident with, but the more you start talking about it, you'll gain that confidence. So just do it, just do talk to them with what you know, and it's okay that you're not perfect, cause none of us are.

Helen Westmoreland: Mm, I like that.

LaWanda Toney: Thank you so much for that. That's really great.

Helen Westmoreland: I did forget to tell you, so I have a three-year-old Jen.

So she's like very much in that, like doesn't really understand, but mama is frugal. For Christmas I bought her these like light-up sneakers, it was like a big deal. And I took her to the playground this week and she was stomping in a mud puddle. And I was like, sweetie. You're gonna ruin your shoes. I'm not getting more new shoes. And then she got really upset, like sobbing, crying. I said, sweetie shoes cost money. I just got, I just bought these for you. There's not money to keep buying more shoes and she was confused and I was like, well, hopefully it'll come off. And so I go home, wash the shoes. And when I take them out, they're clean. She's like, they're clean. That means you have money for more shoes now. And I was like that’s not exactly how that works. But I don't know. I mean, I don't know what the right advice for a three-year-old is. Like, do you talk about money with three-year-olds?

Jen Hemphill: You can. There is actually this website that is through the CFPB and it gives you some activities and ideas. If you Google “money as you grow” and depending on their ages, it gives you different age groups and what they, what they are ready for and the developmental age. So that can give you, especially for that age group, that can give you some tips and ideas for that.

Helen Westmoreland: It's very good advice. Yeah. It was like, I mean, you sort of got the message there. Oh, thank you again, Jen.

Jen Hemphill: I appreciate you having me.

LaWanda Toney: Yes. To our listeners, thanks for joining us, please remember to visit apple podcast page and leave a rating and a review, and as always for more resources related to today's episode, check out notesfromthebackpack.com.

Thanks for listening. Joi