Their money mindset will inevitably be influenced. Shouldn't it be by you?

• And so building that financial literacy, that practical application, and more than anything is really that healthy mindset and relationship when it comes to money. (01:44)
• The biggest thing you can do is to expose your kids to anything to do with money to any degree that you're comfortable with. (04:37)
• Something is going to influence them and start subconsciously setting up these expectations and these relationships when it comes to money. (08:56)

Quote for the episode. "The point is that some relationship is going to develop. So you can either let it come together however it happens, letting those chips fall wherever they may, or you can attempt to actively influence what that end result may be." (04:15)

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Welcome to the EnjoyMore30s Family Finance

podcast. The only podcast dedicated to making life more

enjoyable for young families by hitting on the financial topics

that tend to weigh on us, stress us out, and distract our focus

from simply enjoying life.

Hello and welcome once again to the EnjoyMore30s

Family Finance podcast. We are in the third episode here of the

Your Kids Money Mindset series. We have I would say what is

probably the most important episode of this entire series

that we're going to go over. And that's what your

responsibilities are when it comes to really teaching your

kids about money.

As always, if you like what you're hearing, please make sure

to subscribe, follow us on Apple podcasts, any of those apps out

there, wherever you listen. Clicking a star leaving that

review really helps us reach the literally millions of other

young families out there just like you. Last week, we

discussed many different ways you could save for your kids,

and education in particular and it really boiled down to two

main trade offs that you're going to have to decide between.

Do you more value flexibility, meaning the ability to use funds

for college, or anything else you really might want to for

your children? So think weddings, think houses, cars,

all that kind of stuff. Or are you of the mindset of going all

in on trying to maximize that college or school specific

funding? So if you haven't checked out that episode yet,

definitely do that soon.

Today's episode, though, is titled School Doesn't Teach

Money, It's On You, where we're going to cover just how much is

really on your shoulders as parents because nobody's really

telling you how important it is that you talk to your kids about

money. And so building that financial literacy, that

practical application, and more than anything I would say is

really that healthy mindset and relationship when it comes to

money. So if you think back to your own schooling, you know,

raise your hand as you're listening to me here. How many o

you guys had financial literac classes? I'm guessing there ar

no hands up, zero. It was t e same for me. I there w

s a personal finance class w ere they taught you how to balan

e a checkbook and other ery outdated things like that.

And from what I've heard, what I can tell, what I can see, t

at's pretty much exactly the ame today. I've one, let's call

im an extended family member, wh is involved in the school sys

em, and told me once that there ere some kind of a basic finan

ial literacy seminar as part of the freshman orientation. And t

at, you know, is the most I've ver heard of. I don't know why

hey designed it for freshmen, who are eight years away likely

rom earning any money at all. But still, that was the most

've ever heard of anybody d ing trying to help kids out

ith financial literacy, lear ing some things about money

hat would actually be practical and useful to them down the road

So overall, this first par is simple. And it's really the

oal of the entire episode. And that's for you to realize

how much is on your shoulder as parents. And in my opinion

at least, it's close, if no at exactly 100% of it.

Now, one of the great things that was taught to me in my life

was that everyone is going to form an impression of you. One

way or another, they're going to have some kind of an impression

of you by you interacting with them. You can either just

completely accept that as is, kind of just let those chips

fall wherever they may fall, or you can attempt to actively

influence that impression. So if you think of whatever the last

job interview was that you went to, you didn't just wear, you

know, one shoe and that comfy 20 year old sweatshirt with stains

all over it. No, you wanted to look good, you wanted to look a

certain way to influence that person who is going to be

interviewing you and deciding whether or not they wanted to

give you the job. So you wanted it to be positive in the way

that you looked. If you went there and you were all

disheveled, they would say this person doesn't care and that

would be the impression that they would form of you. So when

it comes to your kids, they're going to form some relationship

with money. They may turn out to be spenders, they may be savers,

they may be completely oblivious and just ignore it fully. And

all those are possible. The point though, is that some

relationship is going to develop. So you can either let

it come together however it happens again, letting those

chips fall maybe wherever they may, or you can attempt to

actively influence what that end result may be.

So what can you do to help as parents? The biggest thing you

can do is to expose your kids to anything to do with money to any

degree that you're comfortable with. You don't have to open up

the entire checkbook and give them monthly statements. But we

have this notion in our society that finances are too taboo. We

have to hide it from our children, not burden them with

those things. But sharing with your kids gives that opportunity

for them to start to learn. Kids absorb and emulate more than you

think. If that wasn't true, we wouldn't be, you know, so afraid

of turning into our parents. You know, whenever I say to my

children, they, at some point, parrot back out to me at some

point in the future so I have to watch what I say. And you know

every parent talks like that, everybody parent, everybody's

parent says, 'Oh, you know, at some point, we have to be really

careful what we said around them, because they would just

repeat it out in the open.' And it's not just what they hear and

repeat when they're really young. So when you show them or

even just speak to them about how you pay bills online or how

you save into your work plan every month, or why you started

to use a credit card versus cash or vice versa, or whatever

system you have for budgeting. Or maybe even better, how about

some of the mistakes that you made with money when you were

younger? You're opening their mind to start thinking to even

some small subconscious degree about money. And you know, I

shared in a previous episode, how my Grandpa Joe used to put

money in envelopes for all his expenses. So here's my grocery

envelope, here's my mortgage envelope. His daughter's

remember that. All five of them, remember that. So I've spoken to

others who used to write out their bills on an envelope every

month, add it up, send out the checks, their kids remember that

too. I don't know if it's now because so much stuff is done on

the computer, that it's not out in the open as much. But that

doesn't mean that your kids can't see it. Show them that

Excel sheet, show them something. And if you have

really young kids like me, it's more just showing them that

money is this somewhat intangible thing that exists.

I'm sure you play, you know, grocery store. I guess for me,

it's it's Trader Joe's, because that's the only grocery store my

kids really know. Adding up that pretend cost and seeing if you

have enough money. So seeing how money isn't infinite is a great,

you know, play exercise to go through with them.

I mean, personally, I probably learned the most when I was 16

years old, and had my first job working at CVS. My best friend

growing up, his name was Peter, he worked there and you know, so

I decided to work there, too. You were paid whatever the

minimum wage is at the time, and from a 16 year old's

perspective, I had to work pretty hard for basically no

money. And I learned working for money is hard. And for me, that

was easy motivation to want something a little bit more than

that. So everything that I just went through is having to do

with that mindset, respect for money and what you were

spending.

However, you know, when you're trying to teach your kids about

money growing, there is another really cool way to go about it.

If you do have children that have reported income, so not

under the table income from the restaurant, or whatever it might

be, but real reported income, that makes them eligible for a

retirement account, or specifically what I like to go

through a Roth IRA. Now a Roth IRA, as you may know, from other

episodes, they go tax free, no tax deduction when you go in,

but they all grow tax free. So let's say Johnny earned $2,500.

You know, either Johnny or mom and dad as an incentive can put

up to that same amount, up to $2,500 in the Roth IRA. Whatever

you earn, that's now the amount that you qualify for, up to the

$6,000 a year limit if you're under 50 years old. Now, that

may not seem like a big deal when Johnny is 16 years old but

that $2,500 would come out to over $100,000 of fully tax free

income if we assume an 8% rate of return, when Johnny turns 65.

"You see this account I set up for you, Johnny, with the

assumptions on making this is actually $100,000 for your

retirement."

So again, the goal for this episode is to realize that the

relationship your children will eventually have with money, that

responsibility that's fully on you. They're going to develop

some money mindset one way or another. Is it going to be from

TV, their friends, some music video of a guy throwing money

out of a car window? You know, what is it going to be?

Something is going to influence them and start subconsciously

setting up these expectations and these relationships when it

comes to money. So the last person it could be is you.

Remember that any exposure will make a greater impact on them

than you may know. Remember how when they were you know two

years old and starting to talk, they would repeat everything

that you said. It's getting in there even if they don't

necessarily show it in the in the moment. So really, you know,

put a very high price very high priority on setting that example

and that exposure for your kids is the best advice I could give

there.

Thanks for tuning in today and join us for next week's episode

called What a Nice Gift! where we're going to cover all things

gifting, from how much you can gift to what happens if you go

over that limit, to interesting ways to consider making the most

of that gifting money to kids.

Overall, if you're able to implement what we cover today

and every day, fantastic as always, less to worry about them

before and he could focus more on enjoying life. If you are

wanting help with these things though or have questions you

need help in clarifying. Check out the Ask Joe section on the

show's website www.enjoymore30s.com. That's

EnjoyMore30s.com. Until next week, thanks for joining me

today and I look forward to connecting with you again soon.

The conversations on this show are

Joe's opinions and provided for general information purposes

only. They do not constitute accounting, legal, tax or other

professional advice for your specific situation. You should

always seek appropriate advice from a financial advisor,

accountant, lawyer or other professional before acting upon

any content or information found here first. Joe is affiliated

with New Horizons Wealth Management LLC, a branch office

of TFS Securities, Inc., and TFS Advisory Services an SEC

registered Investment Advisor member FINRA/SIPC.