Latest / WTF! Women Talk Finance / EP 23: How to Raise Kids Who Are Smart With Money with Kim Butler

Transcript

EP 23: How to Raise Kids Who Are Smart With Money with Kim Butler · WTF! Women Talk Finance

0:00
SPEAKER_05: I'm Jackie.
0:01
SPEAKER_05: I'm Candice.
0:03
SPEAKER_05: And this is WTF.
0:05
SPEAKER_03: Grab your coffee, wine, water bottle, emotional support snack, no judgment.
0:10
SPEAKER_05: And let's get into it.
0:12
SPEAKER_05: Hi, welcome back to WTF Women Talk Finance.
0:16
SPEAKER_05: We're here today with Kim Butler.
0:17
SPEAKER_05: Kim is someone who has spent decades thinking about something that founders don't always spend enough time thinking about.
0:24
SPEAKER_05: How the decisions we're all making today actually affect the life and the wealth that we're trying to build over the long term.
0:32
SPEAKER_05: Kim's the founder of Prosperity Thinkers and Prosperity Parents and has spent more than 30 years helping people think differently about wealth, cash flow, control, and financial decision making.
0:43
SPEAKER_05: She and her husband also helped build the prosperity economics movement together.
0:47
SPEAKER_05: She also owns alpacas, and that's all I really need to say.
0:50
SPEAKER_05: So, Kim, thanks for being here with us today.
0:53
SPEAKER_02: Such a joy.
0:54
SPEAKER_02: I just love this space.
0:56
SPEAKER_02: And you know, I love my brand of prosperity thinkers, but if I rebranded ever, it would be called the Guaranteed Girls.
1:05
SPEAKER_03: Love it.
1:05
SPEAKER_03: We're here for that.
1:06
SPEAKER_03: I love that.
1:07
SPEAKER_03: That's a that's adorable.
1:10
SPEAKER_03: I think you should totally brand that.
1:12
SPEAKER_03: It may happen.
1:14
SPEAKER_03: I like it.
1:15
SPEAKER_03: Um, so we these are these are always fun episodes, but also I have a hard time because we've known you for a very long time.
1:24
SPEAKER_03: And so I don't want to skip over and like start mid-stroline with you for our listeners that are listening in.
1:35
SPEAKER_03: So can you give us just kind of like this kind of high level of prosperity thinkers and prosperity parents?
1:43
SPEAKER_03: Because I think a lot of people can relate to to both.
1:46
SPEAKER_03: Absolutely.
1:47
SPEAKER_02: Well, I have my little show and tell things.
1:49
SPEAKER_02: So my cow, yes, this is fourth grade Kim milking Holstein cows, the black and white kind, like for real.
1:56
SPEAKER_02: Um, because my parents gave me a cow and said, this is your job.
2:01
SPEAKER_02: And that really got me started with money.
2:03
SPEAKER_02: And our family did such an incredible job of helping us as kids, so my sister as well, learn about money and all the things.
2:12
SPEAKER_02: So fourth grade to 12th grade, I milked cows, I sold milk, I did uh really a full business, earned a lot of income and learned how to deal with money because of it and all the things that go with cash flow and business decisions, et cetera.
2:27
SPEAKER_02: And then I went to school and then I worked at a bank for a while, and then I wanted to help people with their finances more thoroughly.
2:34
SPEAKER_02: And this is before the internet existed.
2:36
SPEAKER_02: So I did the life insurance realm and the investment realm and the series seven and the series 65, and I have all the stuff over my early adulthood, and I'm trying to make this as fast as possible.
2:48
SPEAKER_02: Um, then as I progressed, I just realized that actually those licensing issues cause problems.
2:57
SPEAKER_02: And oh my gosh, I've seen so many wins and so many losses in the personal financial space.
3:06
SPEAKER_02: And because of the internet, I'm very blessed to have clients in all 50 states and a very wide socioonomic arena, which I love.
3:14
SPEAKER_02: I kind of feel like my upper end clients enable me to serve the clients that sometimes need a little bit more help and maybe the zeros are a few smaller, right?
3:23
SPEAKER_02: So that's kind of cool.
3:24
SPEAKER_02: But anyway, I now live on an alpha farm.
3:28
SPEAKER_02: So also for real.
3:29
SPEAKER_02: So this is my show and tell for alpha's, and that's awesome.
3:33
SPEAKER_02: And I live in Texas and I love it, and I just believe so much in the realm of helping people with their personal finances, which is why I've started the Prosperity Parents.
3:43
SPEAKER_02: It's kind of like a sub-brand.
3:45
SPEAKER_02: So if people are curious, they really should go to Prosperity Thinkers because that's where everything starts, right?
3:51
SPEAKER_02: It's in our mindset.
3:52
SPEAKER_02: But then the Prosperity Parents is helping adults talk with children around money.
3:59
SPEAKER_02: Because whether you're a grandparent or a parent, or maybe you just have Girl Scouts or whatever, Sunday school kids, right?
4:06
SPEAKER_02: Gotta talk about money.
4:07
SPEAKER_02: And that's why Women Talk Finance is such an awesome space because it's the talk that matters.
4:14
SPEAKER_02: We'll, we'll have some more conversation around the prosperity parents, I'm sure, but that's kind of like a sub-brand for me.
4:21
SPEAKER_05: I'm really curious, Kim, how you had such a great foundation to learn money, understand money, work with money from a young age.
4:30
SPEAKER_05: Um, I think a lot of people don't have that same childhood experience.
4:35
SPEAKER_05: And so there comes a point in their later teens or early adult life where they say, I need to learn this.
4:44
SPEAKER_05: You having it innately taught and understanding it, how did you come to that recognition?
4:49
SPEAKER_05: Like, okay, I have this.
4:51
SPEAKER_05: Other people need to learn this.
4:53
SPEAKER_05: Like, what was that moment for you when you recognized you had this, you, you had this unique childhood experience and were in a position to like help others learn something that you already benefited from?
5:06
SPEAKER_02: Well, it started with my own children.
5:08
SPEAKER_02: So just like you guys are doing, because I hear about or I see your lemonade stands or whatever, I know that this is happening.
5:15
SPEAKER_02: I raised without really knowing about it, it was very sub, uh, very unconscious, not subconscious, was very unconscious.
5:22
SPEAKER_02: I raised my own children the way that I was raised.
5:25
SPEAKER_02: And so my adult children today, 29 and 30, I think they are financial rock stars in life.
5:32
SPEAKER_02: Not because they have lots of money, but they know what to do with the money.
5:35
SPEAKER_02: And I'll share you really quick story that was that realization point that you're asking about.
5:40
SPEAKER_02: So I'm at my son's wedding shower, which, you know, the guys and the girls all go today for a wedding shower.
5:47
SPEAKER_02: There's about 30 people there.
5:49
SPEAKER_02: And somebody says, I've heard that this family does family meetings.
5:55
SPEAKER_02: Does anybody do family meetings?
5:57
SPEAKER_02: And I like raise my hand.
5:59
SPEAKER_02: Nobody else raises their hand.
6:02
SPEAKER_02: And it dawns on me, oh my gosh, this family meeting thing that I'm sure my parents didn't call it that, that we did every Saturday morning after we milked the cows, was part of that raising of money smarts that occurred while I was growing up.
6:21
SPEAKER_02: And then I did the same thing with my children.
6:23
SPEAKER_02: And I've got some very specific things that your listeners can do.
6:27
SPEAKER_02: So I'm sure we'll get to that.
6:28
SPEAKER_02: Remind me, three S's and three E's and one question.
6:31
SPEAKER_02: So seven little things we can talk about.
6:34
SPEAKER_02: But it is something that I just realized in this shower was, I don't remember, maybe uh seven years ago, eight years ago.
6:42
SPEAKER_02: I realized, oh my gosh, uh, because of the way that I was raised, and then because of the way I've very unconsciously raised my own adult children, and I see how this, these 29, 30-year-olds and they both have kids, are doing with their money.
6:55
SPEAKER_02: I realized, I've got something here, and it must be shared.
7:02
SPEAKER_03: I love this.
7:04
SPEAKER_03: I love this for so many reasons.
7:05
SPEAKER_03: I'm kind of in the thick of it right now, and you had asked me on another call, or you you just kind of put it out to the group where parents feel in a scale of one to five on the conversations.
7:18
SPEAKER_03: I think I'm hitting a three, to be honest.
7:20
SPEAKER_03: And I I feel uh I feel guilt like I should be doing better.
7:25
SPEAKER_03: This is what I do.
7:27
SPEAKER_03: Um and there's tricky things.
7:32
SPEAKER_03: One, my kids don't really understand what it is my husband and I do.
7:36
SPEAKER_03: So that was a really interesting piece.
7:39
SPEAKER_03: They definitely understand how to earn money and they're eager to earn money.
7:46
SPEAKER_03: They don't have this like broader scale understanding of budgeting and how much things cost.
7:56
SPEAKER_03: And my kids are growing up in a pretty uh fluent situation, right?
8:01
SPEAKER_03: Right.
8:02
SPEAKER_03: Um, and so I do find it tricky and I don't know how much to share with them at all times and how to say something or um how to even discuss money sometimes with them.
8:17
SPEAKER_03: I don't know how much they're gonna go to school and then bring maybe our conversations to school.
8:23
SPEAKER_03: So it's it's tricky.
8:24
SPEAKER_03: How do you how do you guide, and maybe we this is where we jump into the S three S's and three E's, but how are you guiding these conversations?
8:35
SPEAKER_03: Is this parent, is this family meeting like full-blown budget meeting?
8:39
SPEAKER_03: Like we're going through like spreadsheets.
8:42
SPEAKER_03: Here's my spreadsheet, diagrams, diagrams.
8:48
SPEAKER_03: Here is what I spent on your activities this month.
8:51
SPEAKER_03: You better practice and show up because this was more than my first mortgage payment.
8:57
SPEAKER_05: We're gonna whiteboard a family balance sheet right now.
9:00
SPEAKER_05: Seriously.
9:02
SPEAKER_02: Absolutely.
9:02
SPEAKER_02: And all the kids will be right in and interested, right?
9:06
SPEAKER_02: So into it.
9:08
SPEAKER_02: Jackie, uh, most kids didn't actually want to read that intro to finance book I heard that you looked at.
9:15
SPEAKER_05: I did not, Kim.
9:16
SPEAKER_05: As an adult, so do you finance?
9:18
SPEAKER_05: I didn't, I didn't want to touch it.
9:19
SPEAKER_05: I didn't want to hand it to me.
9:21
SPEAKER_05: It looks heavy.
9:22
SPEAKER_02: Yeah, yeah.
9:23
SPEAKER_02: Americans in particular don't want to talk about money.
9:25
SPEAKER_02: We sure as heck don't want to talk about life insurance.
9:27
SPEAKER_02: Although here's a fun fact for you when a Canadian couple gets pregnant, they immediately go buy life insurance because Canadians are very more fear-based than Americans.
9:41
SPEAKER_02: When Americans get pregnant, I know so many young families that have either no or very little life insurance because you just don't want to deal with it and they don't think they're not.
9:52
SPEAKER_05: Well, and their first their first thought is like, I better get on a daycare list for little Susie when she turns four.
9:59
SPEAKER_05: I gotta get on that list now.
10:00
SPEAKER_05: For sure.
10:02
SPEAKER_02: So I want to go back to Candace's question, and I have what I just think, and I'm just so grateful because this is how my parents did it, I did it with my kids, is the solution for the very specific sub-question that you asked about.
10:18
SPEAKER_02: So this is kind of like for your founders and for your wealthier families, and then we can do the same thing for people that have less zeros on the balance sheet.
10:26
SPEAKER_02: Do not put your earned income into the checking account where you pay your bills.
10:31
SPEAKER_02: That's the same solution.
10:33
SPEAKER_04: Say it again.
10:34
SPEAKER_02: Do, mm-hmm, thank you.
10:35
SPEAKER_02: Do not put your earned income into the checking account where you pay your bills.
10:43
SPEAKER_02: Put your earned income into another account.
10:46
SPEAKER_02: And ideally, both spouses do that, and you can have two accounts or one, it doesn't really matter.
10:50
SPEAKER_02: And it doesn't, you don't need anything fancy, just same bank, whatever.
10:55
SPEAKER_02: Do not put your earned income into the same checking account where you pay your bills.
10:59
SPEAKER_02: What you put into the checking account where you pay your bills is enough for your family to live their life the exact same way that they're living it today.
11:06
SPEAKER_02: So let's just use$10,000 as an easy number a month.
11:10
SPEAKER_02: Okay.
11:10
SPEAKER_02: It could be a thousand a month.
11:12
SPEAKER_02: It doesn't matter what the what the zeros are.
11:14
SPEAKER_02: But whatever the income is, is the income.
11:16
SPEAKER_02: And you don't want to share that because to your point, it may get shared at school and you don't want that.
11:22
SPEAKER_02: But if, and you know, frankly, even the household, the households now that's the$10,000 number, that could be problematic too.
11:29
SPEAKER_02: And so at some point you may need to have a conversation around the privacy.
11:33
SPEAKER_02: But if you just put into the checking account to pay your bills what you need to pay your bills and live your life, then the whole thing around money just becomes so much easier to talk about.
11:45
SPEAKER_02: And then you add in these lane years and green years conversations and you add in the three S's and three E's, which I'll get to as soon as you give me the go-ahead.
11:53
SPEAKER_02: And that will absolutely solve this issue.
11:57
SPEAKER_02: And Candace, you will go from a three to a five, which is I got this.
12:03
SPEAKER_02: Like I I'm not scared anymore.
12:05
SPEAKER_02: I did use five as the good number, right?
12:07
SPEAKER_02: Sometimes I get confused.
12:08
SPEAKER_02: One or five.
12:11
SPEAKER_03: I'm feeling, as the kids say, mid.
12:15
SPEAKER_02: Yeah.
12:16
unknown: Yeah.
12:17
SPEAKER_02: So you want to hit the you want to hit the three S's because you brought up one of them.
12:20
SPEAKER_03: I want, yeah, let's let's dive into that.
12:22
SPEAKER_03: I want to I want to hear three S's, three E's, one Q.
12:25
SPEAKER_03: And I I want to echo, I love that because that's that is what we do.
12:29
SPEAKER_03: That has been what's what we do.
12:31
SPEAKER_03: We have our own accounts, we have our own contributions to our family account.
12:38
SPEAKER_03: It is tricky when you have businesses because some of your expenses are business expenses.
12:42
SPEAKER_03: So you gotta try to make it all work, but um we we call it float, the float number.
12:50
SPEAKER_03: Where what's the float?
12:52
SPEAKER_03: And it's the number you keep in those accounts is the float.
12:55
SPEAKER_03: Yeah, love it.
12:57
SPEAKER_04: Well, the three S's are in this order.
13:02
SPEAKER_02: Share, save, spend, share, save, spend.
13:11
SPEAKER_02: Okay, so share if you're a biblical family, right?
13:14
SPEAKER_02: 10%, whatever, 20%, kind of depends on which Bible thing you read, but share.
13:20
SPEAKER_02: And sharing is if you're not a biblical family, it's still totally legit because you have gifts that you give to people, you have arenas that you are sharing, and you want your kids to share.
13:31
SPEAKER_03: And so I recommend charity is we do the food bank, we're a big food bank family.
13:37
SPEAKER_03: Um we do, we sometimes prep food to give to the food bank, or we will do, especially when they do matching, we will do uh we'll donate, and then I I do tell the kids, I'm like, we bought 200 meals with that, you know, or whatever it was.
13:54
SPEAKER_03: There was one we did like a thousand meals at Thanksgiving, and that was a very exciting thing to be like a thousand meals, that's a good amount of meals for our community.
14:03
SPEAKER_03: Yeah.
14:04
SPEAKER_02: Well, see, you got the kids physically engaged, and so I recommend that people set up jars, ideally like clear plastic or glass jars, because the kids, especially the younger kids, they really need to get the physicality of money going.
14:18
SPEAKER_02: And I recommend that families go to the bank, you can still do this these days, and actually purchase rolls of quarters, rolls of dimes, single dollar bills.
14:27
SPEAKER_02: I always, as I was raising my family, I had 100 single dollar bills.
14:33
SPEAKER_02: I kept them in the car.
14:35
SPEAKER_02: And that way, if they were given like 10 bucks for birthday or whatever, I would take the 10 and give them 10 ones.
14:41
SPEAKER_02: And then they could go to the share, save, spend jars and put, we did 20%, right?
14:49
SPEAKER_02: 20% in the sh in the uh share, and then we did 20% to save.
14:55
SPEAKER_02: So again, you know, 10, 20%, whatever, and then whatever the leftover is to spend.
15:01
SPEAKER_02: So you've got to get, you don't have to do anything.
15:05
SPEAKER_02: You will want to get the the physicality involved, get that share, save, spend thing going.
15:12
SPEAKER_02: And I'm talking from age two and up, because you know what happens if you don't do it at two?
15:19
SPEAKER_02: You get the greedy gimmies at the grocery store.
15:24
SPEAKER_03: I can I can say that is 100% certain.
15:26
SPEAKER_03: We did do this, but not as not as tightly as what you're recommending.
15:30
SPEAKER_03: And so they do, and I love the ones.
15:34
SPEAKER_03: Littles have a hard time distinguishing between a one and a 20.
15:38
SPEAKER_03: And so the ones are we do ones as well, mostly because there's no mistaking how much my five-year-old knows how much money she has because it is, and she's actually quite the saver.
15:50
SPEAKER_03: So she has this stack.
15:52
SPEAKER_03: It kind of looks like she's running some sort of ring or something because it's like this she loves a stack of dollar bills.
15:58
SPEAKER_03: She loves her thick stack of dollar bills.
16:00
SPEAKER_03: Her sister loves to spend her thick stack of she'll happily give it away too.
16:06
SPEAKER_03: But she just she wants to, she loves to spend it.
16:12
SPEAKER_02: I love it.
16:13
SPEAKER_02: Well, frankly, you know, we talk about the littles.
16:16
SPEAKER_02: I know people in their 40s and 50s and 60s that need the same three sets of jars, accounts, whatever, but it's really something that Americans just were not taught.
16:26
SPEAKER_02: And we used to be, like if you go back into the 40s and and so like the 1940s and earlier, um, this was a thing.
16:35
SPEAKER_02: You know, people talked about saving as a verb, and people talked about saving first, and people actually did that.
16:40
SPEAKER_02: And today we don't.
16:42
SPEAKER_02: We spend first and we have nothing left over and we can't figure it out, no matter how many zeros the income is.
16:48
SPEAKER_05: I'm really curious psychologically and culturally, what caused that shift?
16:53
SPEAKER_05: I was raised a lot like you, Kim.
16:54
SPEAKER_05: My par my parents both grew up on farms.
16:57
SPEAKER_05: Their parents lived through the depression or were born in the in the depression and then grew up kind of seeing their parents.
17:06
SPEAKER_05: So I had the benefit of parents that knew this, you know, save first.
17:12
SPEAKER_05: Yeah.
17:12
SPEAKER_05: And then and then work on spending allocation.
17:14
SPEAKER_05: We did envelopes, right?
17:16
SPEAKER_05: Yeah.
17:16
SPEAKER_05: Um I had the benefit of that.
17:18
SPEAKER_05: I'm curious what happened culturally and psychologically, where a whole swath of our society missed out on that.
17:26
SPEAKER_01: But you can have a board, investors, advisors, and still have nobody you can actually talk to about what is really going on.
17:34
SPEAKER_01: That is not unusual.
17:35
SPEAKER_01: That is the founder reality.
17:37
SPEAKER_01: And we step in right there.
17:39
SPEAKER_01: I'm Tom Powell, and at the founder's office, we're proud to sponsor Women Talk Finance.
17:45
SPEAKER_02: So here's my take on it.
17:47
SPEAKER_02: Not researched, and I could be totally wrong, but it's two things credit cards and Wall Street.
17:55
SPEAKER_02: And I'm not vilifying Wall Street, but the fact is mutual funds, which got started in the 1940s or 50s, I think, um, became a thing.
18:07
SPEAKER_02: And so people that were not able to buy a full share of stock because they didn't have the money to do that, all of a sudden they could buy a mutual fund with a smaller amount and a little bit every month, right?
18:20
SPEAKER_05: Very interesting.
18:21
SPEAKER_02: Then you bring the credit cards in, and we don't even have to cover what caused the problems there.
18:26
SPEAKER_03: Yeah.
18:27
SPEAKER_03: I think too, there is this.
18:30
SPEAKER_03: Um so I I have the benefit of being kind of at the tail end of my friend group with ages of children.
18:37
SPEAKER_03: Okay.
18:38
SPEAKER_03: And I get the ads all the time for the kid debit cards.
18:45
SPEAKER_03: Yeah.
18:46
SPEAKER_03: My my dad was really serious about not letting me have a debit card.
18:51
SPEAKER_03: I had a I had a bank account, I had all the accounts set up.
18:54
SPEAKER_03: He did not um opt me in to get the debit card at the time.
18:58
SPEAKER_03: I had to get cash.
18:59
SPEAKER_03: I had to have cash.
19:01
SPEAKER_03: And I got to pull out my cash, my spending cash for the month.
19:07
SPEAKER_03: Um, because it's actually a lot harder to hand over the dollars than to swipe your card.
19:14
SPEAKER_04: Yep.
19:15
SPEAKER_03: And I know as an adult too, that I I still have that connection with my cash versus my card.
19:23
SPEAKER_03: And um so I look at my kids and my youngest loves her stack.
19:29
SPEAKER_03: She feels the it's very her personality too.
19:32
SPEAKER_03: She likes the security.
19:34
SPEAKER_03: You know, she's five.
19:35
SPEAKER_03: Obviously, she's got a lot to uh a lot of overhead.
19:40
SPEAKER_03: She likes the security of having her big wad of cash.
19:43
SPEAKER_03: Um and so she she's very thoughtful about how she spends.
19:48
SPEAKER_03: I noticed with my older one too, she is very intentional and she does think through because she has the dollars.
19:57
SPEAKER_03: It's so much easier to just blindly spend a number and plastic than actual tangible money.
20:08
SPEAKER_02: Well, that's really you use the word overhead, that's really where those three E's come in.
20:13
SPEAKER_02: Jackie, are are we good to in the Go for it, Kim?
20:17
SPEAKER_05: Also, and I have one question to come back to you, but let's dive into the three E's and see what they are.
20:22
SPEAKER_02: So with our children, we want to have three E's, and the first is expectations.
20:30
SPEAKER_02: And the second one is expenses.
20:38
SPEAKER_02: And then we also want to have earnings.
20:41
SPEAKER_02: So with the three E's, the order is not as critical, but as you know, well, you know what really should be critical.
20:48
SPEAKER_02: So I'm gonna I'm gonna change my order if I may.
20:51
SPEAKER_02: Expectations first.
20:52
SPEAKER_02: Thank you.
20:54
SPEAKER_02: Expectations first, earnings second, and expenses third.
21:00
SPEAKER_03: Yeah.
21:01
SPEAKER_02: Okay.
21:01
SPEAKER_02: So expectations are things that we're expected to do in the home because we're a part of a home, right?
21:07
SPEAKER_02: So the parent has certain expectations that they do, and the other parent has different expectations that they do.
21:13
SPEAKER_02: And each child, and I'm not kidding, starting at the age of two or less, I've got some super fun stories about my own grandchildren at 18 months.
21:22
SPEAKER_02: They have expectations.
21:24
SPEAKER_02: And what happens throughout a child's life is what starts as an expectation keeps getting added to what starts as an earnings.
21:36
SPEAKER_02: So I'm skipping ahead for a minute here, uh moves to expectations.
21:42
SPEAKER_02: And what an older child gets to earn shifts to expectations the older they get.
21:51
SPEAKER_02: So the expectations start really low and easy, like make your bed, right?
21:57
SPEAKER_02: But over time, those expectations grow.
22:00
SPEAKER_02: And the earnings are for things that are above and beyond the expectations.
22:06
SPEAKER_02: So a really simple example is make the bed, right?
22:09
SPEAKER_02: You're expected to do that.
22:11
SPEAKER_02: As a five-year-old, though, my sister did this.
22:15
SPEAKER_02: She taught her five-year-olds to do the laundry.
22:19
SPEAKER_02: And so they got extra pay when they earned money.
22:26
SPEAKER_02: So it's a couple E's there doing the laundry.
22:31
SPEAKER_02: So the expectation is make the bed, but the earnings opportunity is to wash the sheets.
22:38
SPEAKER_02: Okay, over time, the washing the sheets stops being an earnings opportunity and it moves to an expectation, right?
22:45
SPEAKER_02: And then they get a new earnings opportunity, which is maybe wash mom and dad's sheets too and make mom and dad's bed, right?
22:52
SPEAKER_02: As an example.
22:54
SPEAKER_02: So that's the realm.
22:56
SPEAKER_02: Now, the other critical part there is the expenses.
22:58
SPEAKER_02: I'll go over this quickly, but your two-year-old, your five-year-old, your 10-year-old, and your 15-year-old must absolutely positively have expenses.
23:06
SPEAKER_02: So the two years, the two-year-old's expenses are the birthday present for the party that they have been invited to.
23:14
SPEAKER_02: And they need to take their little$2 bills and they need to go to the store and they need to choose is it candy or a toy, right?
23:21
SPEAKER_02: That I'm going to buy.
23:22
SPEAKER_02: And then they need to go give that gift to the child that they bought it for.
23:27
SPEAKER_02: I promise you, this will transform birthday parties.
23:30
SPEAKER_02: And then they need to have other expenses as their age progresses that are appropriate, right?
23:35
SPEAKER_02: So, like another example is the sports shoe realm, right?
23:39
SPEAKER_02: So, okay, there's a$50 pair of shoes and it's the soccer cleats and it'll do the job.
23:44
SPEAKER_02: And mom and dad are gonna buy the sports shoes up to$50 because that's the expected thing that a parent does for a child.
23:52
SPEAKER_02: But if that child wants the$70, I should probably double these numbers, the$70 pair of sports shoes, then they're gonna pay the$20 difference.
24:02
SPEAKER_02: Yeah.
24:03
SPEAKER_02: So that's the whole three E economy, right?
24:07
SPEAKER_02: It's a home economy.
24:08
SPEAKER_02: It's a a family space that is not budgeting on the whiteboard or the Excel spreadsheet, but it's working with those dollars and those quarters in the jars and then having, oh my gosh, we're at the store and you didn't bring your earnings today.
24:26
SPEAKER_02: I'm sorry.
24:27
SPEAKER_02: I guess you don't have the ability to spend anything then.
24:31
SPEAKER_03: Yeah.
24:31
SPEAKER_03: And I'm not fronting anymore.
24:33
SPEAKER_03: Like I used to kind of front them a little bit, but I I don't do it anymore because part of the responsibility is knowing, is remembering to bring it, is remembering to like there is ownership in that.
24:48
SPEAKER_03: I will say, my both my kids started doing laundry.
24:52
SPEAKER_03: I saw Jackie pick up because she's been the recipient of two-year-old laundry videos.
24:57
SPEAKER_03: And it's really they're actually fantastic at it.
25:01
SPEAKER_03: It takes forever.
25:03
SPEAKER_03: Do not plan it on a day you have somewhere to be.
25:06
SPEAKER_03: It'll take a two-year-old 20 minutes to move everything from the wash to the dryer.
25:11
SPEAKER_03: And they can learn.
25:13
SPEAKER_03: My kids learned the buttons.
25:14
SPEAKER_03: They knew which buttons they they like the sound and they knew which buttons to push.
25:19
SPEAKER_05: And I did perk up because I witnessed that with you.
25:22
SPEAKER_05: And I know it cost you time and patience, but you hung in there for the benefit of your kids.
25:28
SPEAKER_05: And you actually Candace structured her house to facilitate the littles learning these things really early.
25:37
SPEAKER_05: Everything was on their level: snacks, bowls, dishes, Tupperware, down at ground level.
25:44
SPEAKER_05: So the two-year-old could walk up and be her own snack captain.
25:47
SPEAKER_05: She had you had one of your daughters making oatmeal, I think, at 18 months.
25:52
SPEAKER_03: I do have a cute video, yeah, of them making oatmeal.
25:56
SPEAKER_03: We have little, we've stools everywhere in our house.
25:59
SPEAKER_03: And yeah, everything's like pretty accessible for them.
26:04
SPEAKER_03: Folding boards, they make little kid folding boards.
26:06
SPEAKER_03: We taught them a two-year-old to fold a t-shirt.
26:09
SPEAKER_03: Oh, yeah.
26:10
SPEAKER_03: It's not gonna be pretty.
26:13
SPEAKER_05: It's gonna take some time.
26:14
SPEAKER_05: But my so my question that I wanted to circle back on is you mentioned that we can do all of this teaching with our little people, but you said a lot of adults, 40s, 50s, 60s, didn't get the benefit of the same type of childhood we all had.
26:30
SPEAKER_05: And they can use a lot of these lessons.
26:31
SPEAKER_05: How do you work with adults to like reframe and even start thinking about this differently?
26:37
SPEAKER_05: Where do you start when this has not been your foundational wiring?
26:42
SPEAKER_05: Where do you start with adults to start teaching money skills?
26:45
SPEAKER_02: So it starts with not putting your earned income into the checking account.
26:49
SPEAKER_02: That is the most imperative thing, uh, bar none in over 30 years.
26:54
SPEAKER_02: The people that kind of figured that out on their own, I have seen build unbelievable financial portfolios of all types, savings and investments.
27:03
SPEAKER_02: Those that did not figure that out, that were never given that guidance, just they don't have savings, right?
27:08
SPEAKER_02: America does not have savings.
27:10
SPEAKER_03: I know why I don't do it, but can you explain why that's your guidance?
27:14
SPEAKER_03: I I know for me personally, why and I it started from the lessons I got as a kid.
27:19
SPEAKER_03: Right.
27:20
SPEAKER_03: It's real simple.
27:21
SPEAKER_03: We spend what's in our checking account.
27:23
SPEAKER_03: Yeah, that's basically it.
27:24
SPEAKER_03: If it's in there, it's going to be spent.
27:27
SPEAKER_03: That's why, you know, for my oldest, if she has her big stack of money, she's gonna spend it.
27:31
SPEAKER_03: If we start with, we call it savings, we call paying yourself first.
27:35
SPEAKER_03: Yes.
27:35
SPEAKER_03: You're paying yourself first.
27:36
SPEAKER_03: Honor yourself and you pay yourself.
27:39
SPEAKER_03: And you and then and you give your money away, you give what your percentage is, and then then we can address the money that's left over.
27:47
SPEAKER_02: Yeah.
27:47
SPEAKER_02: And so then to answer Jackie's question the rest of the way, that's the second step is the three S's, right?
27:53
SPEAKER_02: You've you've and you know, if you don't want to do share or whatever, but again, charity and or gifts, right?
27:58
SPEAKER_02: Everybody's got some element or maybe family members that they're helping, right?
28:02
SPEAKER_02: Some element of share.
28:03
SPEAKER_02: So if you want to set up a separate account, great.
28:05
SPEAKER_02: If you want to do envelopes, great.
28:06
SPEAKER_02: If you want to do a jar, great.
28:07
SPEAKER_02: If you want to do an app, great, it doesn't matter.
28:09
SPEAKER_02: But frankly, I actually don't typically recommend budgeting.
28:13
SPEAKER_02: Sometimes somebody needs to go through the exercises to have some sense because people sometimes have no sense of what they're spending.
28:20
SPEAKER_02: But your typical person, and Candace brought up a really important point.
28:23
SPEAKER_02: We have natural savers in our world and we have natural spenders.
28:27
SPEAKER_02: And so when you have that, and often opposites attract until it gets so annoying in a marriage, right?
28:33
SPEAKER_02: So you do have to address that.
28:36
SPEAKER_02: But you can take a natural spender and help them understand the share, save, pay yourself first, spend realm.
28:45
SPEAKER_02: And it is a piece of cake.
28:47
SPEAKER_02: They will realize if they'll stop putting to like let's use our$10,000 example.
28:52
SPEAKER_02: Let's say the income is$10,000.
28:55
SPEAKER_02: And so for the first month, they go ahead and put in$10,000 into their checking account because they just don't know.
29:01
SPEAKER_02: But they're conscious of it that month.
29:02
SPEAKER_02: Well, the next month maybe they put in$9,000 and they just see if they can live their life the same way.
29:07
SPEAKER_02: And then next month, maybe they go to$8,000, right?
29:10
SPEAKER_02: And I think a general rule of thumb is try to save 20% of your income.
29:13
SPEAKER_02: Okay, if it can only be 10, fine.
29:15
SPEAKER_02: But and again, the zeros don't matter, right?
29:18
SPEAKER_02: So implement those three S's.
29:21
SPEAKER_02: I don't care if you're 50 years old.
29:24
SPEAKER_02: Implement the three S's and you will transform your finances.
29:32
SPEAKER_03: So then back to the family meeting, just and then we can I I we still have a whole other topic I wanted to talk about today.
29:40
SPEAKER_03: Do you share the were your was your family open and sharing about what the costs it what it costs to live?
29:51
SPEAKER_03: Because that's where I think my kids still have a gap, and obviously they're young.
29:55
SPEAKER_03: Yeah, they don't have a concept for how much a car is, you know, or how much a trip costs, how much their activities cost.
30:06
SPEAKER_02: Yep.
30:08
SPEAKER_02: So here's what you do.
30:09
SPEAKER_02: So first of all, I'm gonna identify the Q, right?
30:13
SPEAKER_02: We had three S's, three E's, and a Q.
30:15
SPEAKER_02: And the question is this is the question.
30:18
SPEAKER_02: Like, please, if you're listening, stop the car and write this down.
30:22
SPEAKER_02: Go back to the show notes, put it in the show notes.
30:24
SPEAKER_02: Anybody can grab it, right?
30:27
SPEAKER_02: Would you like more freedom and responsibility?
30:30
SPEAKER_02: Would you like more freedom and responsibility?
30:34
SPEAKER_02: You can ask this of a spouse, right?
30:36
SPEAKER_02: Because sometimes we have, uh and it's not guy or gal specific, but we have one spouse that is absolutely clueless around the money in the household and another one that deals with it all.
30:47
SPEAKER_02: Would you like more freedom and responsibility?
30:50
SPEAKER_02: I know we, you know, we didn't get to our widow discussion today.
30:53
SPEAKER_02: Maybe we'll just do another WTF episode, but I know widows that have never dealt with a checking account.
31:00
SPEAKER_02: And now what?
31:01
SPEAKER_02: Okay.
31:01
SPEAKER_02: So, question would uh of a two-year-old, a two-year-old will understand the word freedom and responsibility.
31:07
SPEAKER_02: It might be always want more freedom because they can do it themselves.
31:12
SPEAKER_02: Yes, I do it myself.
31:14
SPEAKER_02: That is my that was my daughter's thing.
31:16
SPEAKER_02: I do it.
31:17
SPEAKER_05: I want more freedom, but not responsibility.
31:20
SPEAKER_02: Yeah, like that's what I'm saying.
31:24
SPEAKER_02: That's why the question is both.
31:26
SPEAKER_02: Would you like more freedom and responsibility?
31:28
SPEAKER_02: So if you start with that, then you can morph that into some additional discussions.
31:35
SPEAKER_02: And it's, oh my gosh, we as parents, we must, must, must remember we have two ears and one mouth, two ears and one mouth, two ears and one mouth, right?
31:43
SPEAKER_02: So you ask the question and then you shut up and you just let them answer.
31:48
SPEAKER_02: There's just a couple other things that I will bring in that will help count as what you're talking about.
31:53
SPEAKER_02: Like, how do we deal with all, you know, the conversation around all this stuff?
31:57
SPEAKER_02: Introduce the concept of lean years and green years.
32:00
SPEAKER_02: If you're an entrepreneurial family, you're forced into it.
32:04
SPEAKER_02: If you're not, it's still legit.
32:06
SPEAKER_02: I mean, people lose jobs today, left, right, and center, right?
32:09
SPEAKER_02: And there's other things that occur.
32:11
SPEAKER_02: Yeah, big expenses pop up.
32:12
SPEAKER_02: Exactly.
32:13
SPEAKER_02: Yeah, family murder, whatever.
32:14
SPEAKER_02: Oh, there's lean years and green years.
32:16
SPEAKER_02: And uh, if you don't want those words, use another word, but start to help the children understand because then you can have, oh, this is a lean year vacation.
32:25
SPEAKER_02: And this is a green year vacation, right?
32:28
SPEAKER_02: And there's a difference.
32:29
SPEAKER_02: And then the other thing that is so critical is every single thing that you can that you're comfortable with, which is very age appropriate.
32:39
SPEAKER_02: Talk about it.
32:40
SPEAKER_02: Dinner at the restaurant.
32:42
SPEAKER_02: Let them look at the receipt, calculate the tip.
32:47
SPEAKER_02: Uh trip to the gas station, trip to the grocery store.
32:51
SPEAKER_02: Grocery stores are fabulous learning modality spaces for this arena.
32:58
SPEAKER_02: Have them sit down, again, age appropriate, right?
33:00
SPEAKER_02: But have, and some kids can handle this at six, some of them can't handle it till they're 16.
33:06
SPEAKER_02: Have them sit down with you if you're doing a bill paying session.
33:10
SPEAKER_02: This is why you don't put your income into the checking account.
33:12
SPEAKER_02: You only put what is needed to run the house into the checking account.
33:16
SPEAKER_02: Give them a line item to be responsible for.
33:21
SPEAKER_02: Maybe it's the drinks.
33:22
SPEAKER_02: A fun story.
33:24
SPEAKER_02: I have a family that had a family member lose a job.
33:27
SPEAKER_02: The the one is an entrepreneur, the other is a W-2.
33:30
SPEAKER_02: W-2 person lost the job.
33:32
SPEAKER_02: Not that entrepreneurs can't also lose their jobs, but um, this person did.
33:37
SPEAKER_02: And so the the parents sat down with the family and they said, Okay, we just got to reduce his expenses a little bit.
33:43
SPEAKER_02: And one of the teenagers said, What would happen if we all drank water?
33:48
SPEAKER_02: So they had fun with it, right?
33:50
SPEAKER_02: This is another thing that's so important.
33:52
SPEAKER_02: Try to make it fun.
33:53
SPEAKER_02: And they started to calculate the amount of money that they spent on pop or soda, um, Gatorade, right?
34:00
SPEAKER_02: Or all the sports drinks, um, pick your poison for your energy drink.
34:05
SPEAKER_02: Like it was an astronomical amount of money in a month.
34:11
SPEAKER_02: And they they went all in.
34:14
SPEAKER_02: And at every restaurant and at every uh sports game and at every you know, party, and they carried their water bottles around.
34:24
SPEAKER_02: And they were able to literally make up a big portion of the difference of that lost income by just drinking water for the night.
34:33
SPEAKER_05: Kudos to that, whoever that child was that made that suggestion.
34:36
SPEAKER_05: I hope they're so proud of themselves.
34:38
SPEAKER_05: And good parents make good kids.
34:40
SPEAKER_05: Good kids come from good parenting.
34:42
SPEAKER_05: So that's a that's incredible.
34:45
SPEAKER_03: And good on them to say, hey, we're having some budget shifts.
34:49
SPEAKER_03: I think a lot of times parents feel the need to pretend like it's not happening.
34:56
SPEAKER_03: Yeah.
34:57
SPEAKER_03: And I think there was something really powerful that happened there and saying, like, we're we gotta make some everybody's working, we're a community.
35:06
SPEAKER_03: And I think there's a give and take to that.
35:08
SPEAKER_03: I can't just expect my kids to be a part of the community of our house when it comes to emptying the dishwasher or, you know, vacuuming or whatever it is.
35:17
SPEAKER_03: I also need to be honest with them about what the impact on our community as a home.
35:23
SPEAKER_03: That's what we call our home, is we're we're a community, we work together, everybody has it has a role.
35:29
SPEAKER_03: Yep.
35:29
SPEAKER_03: Um, and so I think there's so many parents that try to hide, um, or there's embarrassment or shame about it, which there really should never be.
35:40
SPEAKER_03: Every everyone goes through this.
35:42
SPEAKER_03: Yes.
35:43
SPEAKER_03: Most people go through this.
35:45
SPEAKER_03: Um, and I love the idea of saying this is a lean vacation.
35:49
SPEAKER_03: And I will tell you, my kids have had amazing trips in beautiful hotels in beautiful pools.
35:57
SPEAKER_03: And they have also thought the Hampton Inn and Suites in the in the tiny town that we visited to see their great-grandparents was top-notch.
36:09
SPEAKER_03: It was fantastic.
36:11
SPEAKER_03: You know, they were like this this breakfast buffet and this pool all clashed.
36:18
SPEAKER_03: Like they were so pumped.
36:20
SPEAKER_03: Um, you know, the candy shop down the street.
36:23
SPEAKER_03: Oh my god, best vacation ever.
36:25
SPEAKER_03: So, like honestly, kids are pretty, pretty adaptable.
36:30
SPEAKER_03: Yep.
36:30
SPEAKER_05: It goes to expectations too.
36:32
SPEAKER_05: Your first of your three E's.
36:36
SPEAKER_05: This all fits into the expectations that you're setting.
36:39
SPEAKER_03: Yeah.
36:40
SPEAKER_03: Cool.
36:41
SPEAKER_03: Wow.
36:42
SPEAKER_03: Kim, okay, we didn't even get to another topic, which means now we have another episode.
36:46
SPEAKER_03: So, but this was huge.
36:48
SPEAKER_03: This was such a good topic because I think a lot of us, I think one, all of us could use the refresher.
36:55
unknown: Yeah.
36:56
SPEAKER_03: My husband and I have the joke of Pythagorean theorem.
37:00
SPEAKER_03: Every time we have a complex adulting question to answer, we go, thank goodness I know the Pythagorean theorem, because these are the things that weren't taught to us in school.
37:11
SPEAKER_03: But they drilled in all these things that I I don't think I have really uh used all that much.
37:18
SPEAKER_03: Like the Pythagorean theorem.
37:20
SPEAKER_03: But you know.
37:20
SPEAKER_05: Three plus four equals five.
37:21
SPEAKER_05: Three times four equals.
37:23
SPEAKER_03: Yeah.
37:24
SPEAKER_05: B squared plus C squared equals C squared.
37:28
SPEAKER_03: I'm sure I have used it, so I don't want to like knock it because I'm maybe I am benefiting.
37:33
SPEAKER_05: Either of us have used it.
37:34
SPEAKER_03: But I will say budgeting, taxes, estate plan, all the things adulting wasn't really hammered into us in school.
37:48
SPEAKER_03: We really weren't tested on it.
37:49
SPEAKER_03: It wasn't any sort of, here's how you progress to the next level.
37:54
SPEAKER_03: How are you doing on your adulting skills?
37:56
SPEAKER_03: Um, but they sure drilled in a lot of other things that I we learned how to square dance.
38:02
SPEAKER_03: Square dancing.
38:03
SPEAKER_03: Very valuable.
38:04
SPEAKER_03: Very valuable.
38:05
SPEAKER_03: Um I just recently made a cootie catcher with Scout, and I can tell you those skills are still sharp.
38:13
SPEAKER_05: Those are so fun.
38:14
SPEAKER_03: If I need those, I still have them.
38:18
SPEAKER_03: So, you know, some skills stay, stay with you, but this is so important.
38:23
SPEAKER_03: Uh, so it's prosperity thinkers.
38:26
SPEAKER_03: Um, and we'll have the link in our show notes, but prosperity thinkers.com.
38:31
SPEAKER_03: We're gonna have you back for another episode because we have kind of bigger, bigger financial topics to address as well.
38:39
SPEAKER_03: Um, and we just we just this was too big of a conversation today for us to get to.
38:45
SPEAKER_03: So thank you so much.
38:47
SPEAKER_03: Thank you so much, Kim.
38:48
SPEAKER_05: It's such a pleasure chatting with you.
38:50
SPEAKER_05: It's all so good.
38:52
SPEAKER_03: Best too.
38:53
SPEAKER_03: Thank you.
38:54
SPEAKER_03: All right, like and subscribe.
38:57
SPEAKER_03: Bye.
38:58
SPEAKER_03: Bye.
38:58
SPEAKER_05: Okay, that was today's episode of WTF.
39:02
SPEAKER_03: If you laughed, learned something, or felt a little less alone, make sure you hit follow and send this episode to a friend who might need it.
39:10
SPEAKER_05: Women don't gatekeep, especially not the good stuff.
39:13
SPEAKER_03: We'll be back next week with more real talk, more stories, and probably more over sharing.
39:18
SPEAKER_03: See you next time on WTF.