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How to Talk With Parents About Money | Series 3.1
Episode 117th May 2021 • Enjoy More 30s: Family Finance • Joseph P. Okaly
00:00:00 00:11:43

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Being able to talk to you parents about money may be more important than you think.

  • Wanting them to make the most of their money (01:29)
  • Your parents likely come from a different money perspective than you (05:36)
  • Ask basic financial preference questions without giving your input (06:46)

Quote for the episode: "The goal is to start a conversation, not tell them why they're wrong."

Securities offered through TFS Securities, Inc., Advisory Services through TFS Advisory Services, a SEC Registered Investment Advisor Member FINRA / SIPC. TFS Securities, Inc. located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.

Transcripts

Voiceover Audio:

Welcome to the Enjoy More 30s: Family Finance

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podcast, the only podcast dedicated to making life more

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enjoyable for young families by hitting on the financial topics

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

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from simply enjoying life.

Joseph Okaly:

Hello and welcome to the next series, which I

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really can't help but be pretty excited about for a couple

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different reasons here. This series itself is called "Your

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Parent's Money Mindset". And in it, we're going to tackle a

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number of aspects to help you address many times what's the

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elephant in the room, when it comes to your parents and money.

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Parents and money can be one of the most challenging scenarios.

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We are probably closer to them than most anyone else in the

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world, however, many times money might as well be spelled

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t-a-b-o-o, taboo. The biggest reason why this can be

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challenging is because it generally doesn't come up until

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a crisis hits. Mom or dad can't make their own decisions, maybe

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should no longer be making their own decisions and don't know it,

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or ran into some kind of an escalating expenses or health

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may have declined. All of which can eventually hit their

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children squarely in the face. Obviously 100% on board for

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helping the people that you know raised us, took care of us, put

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food in our mouths, put us on this track, this path to where

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we are today. But that doesn't mean the best time to start

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helping is when a crisis hits.

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The other aspect is really the opposite of that coin. Parents

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don't really know how much they have or what that translates

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into kind of many times and that's really the whole theme of

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this whole podcast. It's really not just them, it's everybody

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when there's not a financial education kind of prerequisite

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that's provided to all of us in school or growing up. And that

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manifests in either not living their own lives to the fullest,

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or maybe not really realizing that they're going to pass with

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a lot more money in their pockets than they expect. So

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when we speak with clients and show them what path they're on,

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many times we literally have to tell them, "If you continue to

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do what you're doing right now, you are going to die with a lot

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of money in your pocket. Is that your goal? Is that what you

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would prefer? Or would you rather get to share it with your

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kids now through vacations, gifting, or anything else and

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see that smile on their face when you're still alive." And so

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in 13 years now, I've yet to have anyone state the goal was

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to have really big stuffed pockets on their way out.

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If your parents always had money for whatever you guys may have

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needed, not that they were frivolous at all, but just you

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know, dance camp came up, they somehow found money for that.

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You had to go to college, they kind of somehow found money for

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that. You needed a car, they somehow kind of found money for

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that. You had braces, they somehow kind of found money for

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that. And if that was kind of how your parents mentality was,

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where they were kind of careful with money but they always were

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able to come up with whatever they needed, many times that's

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kind of the blueprint for this type of a person. They got to

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where they are today by being a little bit more on the frugal

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side overall, very careful with their money, making sure that

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they had what they needed. So now when they're retired, and

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maybe they have more than enough assets to be a little bit more

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free with more enjoying life with, it's hard to just flip a

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switch and say, "Okay, I spent the last 40 years really being

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careful with every penny. And now all of a sudden, I have this

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freedom to kind of spend." And it's not something that happens

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overnight. For us, it might take three, four or five different

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meetings with people to really convince them that, "Hey, you

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have this extra money. Even if you spend an extra $5,000 a

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year, the numbers say you're not going to run out of money even

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when we account for all these things that could go wrong."

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So today, we're going to cover what you need to know about how

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your parents relationship with money is likely very different

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from yours. And more importantly, what you can start

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doing to take steps in bridging that gap between you guys. So my

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daughter Avery is currently four years old. And as any four year

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old, she asks a lot of why questions. Why is the sky blue?

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Why can't we eat chocolate every day? Why does green mean go, and

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red mean stop? I really kind of liked that one in particular, by

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the way. But children have a completely different lens on the

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world and that's so fascinating. And at the same time, it also

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makes answering their questions somewhat difficult because

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they're coming from that different, you know, innocent

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perspective, that different plane compared to us. So

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recently we read David and Goliath, a story I would expect

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everybody to know. So if you remember in this story, David

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hits Goliath with the rock. And Avery asks, "Why did David hit

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him?" You know, this is supposed to be the crowning moment of the

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story where David triumphs, and all Avery could see was that

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David got angry and hit somebody else with a rock. So aren't we

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not supposed to hit people? Is Goliath okay? Well, it certainly

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caught me off guard. Am I supposed to, you know, go

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against everything that we've been talking about with her and

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just condone violence that, you know, if they deserve it, then

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you can hit them with a rock kind of a thing. If you're

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wondering, I instead went with a, "No, you shouldn't hit people

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Avery, you're right. David was just frustrated. I think he and

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Goliath probably afterwards used their words and became friends."

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So right, wrong and different, that's what I went with, and

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there you go.

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So what you need to know about talking to your parents about

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money is first that they come from a completely different

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perspective than you do most likely. While they didn't

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directly go through the Great Depression themselves, their

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parents did. And because of that, they likely were very

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influenced second hand by that Great Depression mentality, so

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to speak. The pay off your mortgage, keep your money under

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your mattress, in the banks kind of a thing. They perhaps don't

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like paying bills online or prefer paper statements.

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Finances overall may be very personal to them, very private

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to them. They probably don't like using Venmo, publicly

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posting that they are paying someone with, you know, a cute

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emoji at the end of it. Because you may come from another money

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mindset, it may be hard to have any money related conversations.

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And just taking that topic off the table is probably much

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easier many of the times. However, putting it on the table

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is the first step to building that bridge, and that's what I

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want to try to encourage you to do today.

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So what you can do is ask questions without providing

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advice or input. So that last part is very important- without

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providing advice or input. Start conversations that involve some

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financial aspect, just to start building a bridge of having that

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topic be something you can talk about, even if it's to a minimal

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kind of an aspect at the beginning. The initial goal here

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is to start a conversation. In the episodes that follow in this

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series, you're going to be able to build out your knowledge,

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extend the conversation, speak intelligently, so they could

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say, "Hey, you know, my kid kind of knows what they're talking

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about here." Maybe I can have a little bit more of a back and

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forth. But for today just focus on the goal of a conversation in

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and of itself. So here's some examples of what you can talk

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about. Again, careful not to tell them why you think they are

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wrong, if you do think they're wrong, but just to open that

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door, rather. For a lot of these questions, it's really just

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about expressing concern for their well being, which I'm

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pretty sure they'd appreciate.

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"Hey Mom, Dad. Just curious, do you use one bank? Or do you have

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a number of different banks that you use?" "Hey Mom, Dad. Just

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curious, do you like paying most of your bills online? Do you

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like paying them directly? What do you feel like works out the

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best for you?" "Hey Mom, Dad. Just curious, do you use your

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debit card mostly? Do you have a number of credit cards you use?

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Again, kind of, what works best for you? What do you find to be

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the best and most comfortable?" "How did you know when you

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should start investing? How did you kind of figure that out? How

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did you say, 'hey, I should start putting money away'? And

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how did you go about doing that?" "If God forbid anything

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ever happened to you, do you have some place with like

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documents? Or some person I'm supposed to go talk to?" "Hey

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Mom, Dad. You know, just urious, how did you know you

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an even retire? Like, how did hat dawn on you? How did you

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now, 'Hey, I have enough money for the next 30 years'? Did yo

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have a financial advisor ever d like projections for you to kno

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how much you could spend, or h w long your money might last

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" "Hey Mom, Dad. Just curious, o you have medical coverage wh

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n you're retired? I know I g t mine through work, but you don

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t work anymore. Do you still ha e coverage? How do you know wh

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t it covers and what it doesn t cover

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Every parent now is different. So maybe none of these will open

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the door even a crack, maybe there are other questions you

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can think of that might be more fitting for your specific

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parents. But coming from this place of concern, which you

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likely have for them anyway I would assume, is the best chance

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to have it be well received.

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So a quick recap of today. First is to acknowledge that money is

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hard to talk about. But there are significant reasons why you

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should think about having those conversations with parents. The

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first is to head off that bad track earlier than later. And

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secondly is to get them thinking about making the most out of

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their money that they've worked so hard to earn over their

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entire lifetimes. They may have worked for 30 years or more, so

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they really deserve to use that money and I'm sure that's what

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you want for them too. Know as well that they are almost

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certainly coming from a different mindset about money.

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Remember, no public Venmo purchases with emojis at the

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end. Lastly, start bridging that gap by asking very basic

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financial preference questions, or those that express concern

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without being invasive. I've said it many times again today.

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The goal is to start a conversation, not tell them why

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they are wrong.

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Thanks for tuning in today. As always, if you are able to

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implement what we cover, that's fantastic. You have less to

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worry about than before, and can focus more on enjoying life. If

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you are wanting help with these things though, or have questions

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you need help in clarifying, check out the 'Ask Joe' section

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on the show's website. www . enjoy more 30s .com, that's

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enjoy more three zero s .com. If you enjoyed this episode

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specifically, please make sure to subscribe and review us on

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Apple podcasts or wherever you listen. There are literally

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millions of young American families out there I'm trying to

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reach and help just like you. Clicking a star, writing a

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review really goes a long way. The next episode is "Your

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Parents Trust Their Advisor", where we are going to extend now

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into if you can open that door of conversation, who are they

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probably taking advice from already, and what does that

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advice maybe look like? Until next week, thanks for joining me

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

Voiceover Audio:

The conversations on this show are

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Joe's opinions and provided for general information purposes

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

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professional advice for your specific situation. You should

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always seek appropriate advice from a financial advisor,

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accountant, lawyer or other professional before acting upon

Voiceover Audio:

any content or information found here first. Joseph is affiliated

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with New Horizons Wealth Management LLC, a branch office

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of TFS securities Inc and TFS advisory services, an SEC

Voiceover Audio:

registered investment advisor member FINRA/SIPC.

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