Latest / Parent's Talk with Francine Juhlin / Episode 14: Financial Literacy for Children_ A Parent’s Guide to Success

Transcript

Episode 14: Financial Literacy for Children_ A Parent’s Guide to Success · Parent's Talk with Francine Juhlin

• 0:00
  Speaker 1: Hello, welcome to this special episode of Parents Talk, where
• 0:06
  Speaker 1: we are talking to Michelle Riley, who is the Vice
• 0:12
  Speaker 1: President of South State Bank.
• 0:16
  Speaker 2: We are going.
• 0:17
  Speaker 1: To make a series of videos for the kids about
• 0:21
  Speaker 1: financial literacy and about why it's important.
• 0:27
  Speaker 2: So first, we're going to talk to you parents.
• 0:30
  Speaker 1: Because we want you to understand why it is so
• 0:34
  Speaker 1: important that your kids have financial literacy now before they
• 0:40
  Speaker 1: need it as adults. And I can tell you, my
• 0:44
  Speaker 1: parents talked about finances a lot. We can't afford that.
• 0:50
  Speaker 1: You can't have that. Wait till payday. But they even
• 0:55
  Speaker 1: set up bank accounts for us.
• 0:56
  Speaker 2: Save your money.
• 0:58
  Speaker 1: But they never taught us what compound interest is or
• 1:04
  Speaker 1: what we would need this for in the future. So
• 1:08
  Speaker 1: I'm going to ask Michelle to talk about first some
• 1:11
  Speaker 1: of the horror stories she sees as a banker when
• 1:15
  Speaker 1: kids don't learn this when they need it.
• 1:19
  Speaker 3: I think probably the biggest horror story, Francine, is Overdrawing
• 1:24
  Speaker 3: the checking account, not learning how to budget, not learning
• 1:28
  Speaker 3: how to keep track of your finances. So as kids
• 1:32
  Speaker 3: get older, you know, maybe they have an allowance and
• 1:35
  Speaker 3: the parents open up a checking.
• 1:37
  Speaker 4: Account for them and they start spending their money.
• 1:40
  Speaker 3: Maybe they have a debit card or they come into
• 1:43
  Speaker 3: the bank, use their ATM card, whatever it might be,
• 1:47
  Speaker 3: and they are overdrawing their account.
• 1:50
  Speaker 2: That costs some.
• 1:51
  Speaker 4: Fees, $ 30, 000.
• 1:52
  Speaker 3: $ 35, $ 40, depending on the bank, per overdraft.
• 1:59
  Speaker 2: And that adds up real quickly.
• 2:02
  Speaker 3: So it's important for kids to know, I know not
• 2:04
  Speaker 3: many people use check registers anymore.
• 2:06
  Speaker 2: It's like kind of gone with internet banking.
• 2:10
  Speaker 3: However, it is important for kids to keep track of
• 2:13
  Speaker 3: their debits and their credits and their expenditures.
• 2:16
  Speaker 2: So they do not overdraw their account.
• 2:18
  Speaker 3: I have a coworker who has this little plaque in
• 2:21
  Speaker 3: his office that reads, I still have checks, so that
• 2:26
  Speaker 3: means I still have money in my account.
• 2:30
  Speaker 2: Oh yeah, I remember those days.
• 2:33
  Speaker 1: And then, little secret, when I was young and dumb,
• 2:39
  Speaker 1: I would write a check that I didn't have money
• 2:42
  Speaker 1: to cover, and I'd go deposit it.
• 2:45
  Speaker 2: And then two days later, I'd go write a bigger check.
• 2:47
  Speaker 1: And then I'd go deposit it to cover the checks
• 2:51
  Speaker 1: until payday. And then when payday came... I didn't have
• 2:55
  Speaker 1: any money because it all went to cover those checks.
• 3:01
  Speaker 1: And I wish somebody taught me why not to do that.
• 3:07
  Speaker 2: You know, how to budget. How to budget. How to
• 3:11
  Speaker 2: spend before you have the money come in. You know,
• 3:15
  Speaker 2: not just know we can't afford it.
• 3:17
  Speaker 1: I wish somebody gave me some tools to use to
• 3:20
  Speaker 1: understand what we can't afford to need.
• 3:23
  Speaker 2: Mm-hmm. Right. Yes, for sure.
• 3:26
  Speaker 3: So you got to look at, you know, what kind
• 3:28
  Speaker 3: of allowance do you get? Or if you've got a
• 3:29
  Speaker 3: little part-time job after school, how much.
• 3:31
  Speaker 2: Do you make each week or each month? And figure out,
• 3:36
  Speaker 2: all right, say I make $ 100 a week.
• 3:37
  Speaker 3: How much do I want to save?
• 3:41
  Speaker 2: How much of that do I want to spend?
• 3:44
  Speaker 3: You know, you should be setting aside at least 10%
• 3:48
  Speaker 3: into your savings.
• 3:50
  Speaker 2: Each pay period.
• 3:52
  Speaker 3: And if you start that when you're young with your
• 3:54
  Speaker 3: first job, just think of the money you'll have by
• 3:57
  Speaker 3: the time you're 30.
• 3:59
  Speaker 4: Right?
• 3:59
  Speaker 1: You know?
• 4:00
  Speaker 2: Just think about that. I mean, it's just, it's mind-blowing.
• 4:04
  Speaker 3: If you teach your kids how to save young, save
• 4:08
  Speaker 3: early with their first job, maybe even when they're getting
• 4:11
  Speaker 3: their tooth fairy money, when they're little, little.
• 4:14
  Speaker 2: Birthday money. Birthday money. Instead of taking.
• 4:16
  Speaker 1: All that birthday money and going out, well, I'm aging
• 4:20
  Speaker 1: myself now.
• 4:20
  Speaker 2: The toys are us.
• 4:21
  Speaker 1: But go to Walmart and buy toys with it. You
• 4:25
  Speaker 1: can save some of it.
• 4:27
  Speaker 4: Save.
• 4:27
  Speaker 2: I taught my boys. I have three boys. I taught them,
• 4:30
  Speaker 2: put half of it in the savings. You can spend
• 4:34
  Speaker 2: the other half.
• 4:34
  Speaker 3: It didn't matter if it was birthday money, two-third money,
• 4:37
  Speaker 3: Christmas money, graduation money, whatever.
• 4:40
  Speaker 2: Save half, spend half. And we started that, of course,
• 4:44
  Speaker 2: when they were little, losing their teeth. And now they're
• 4:46
  Speaker 2: in their 20s. And it's become a lifelong habit.
• 4:51
  Speaker 1: And I just talked to an insurance agent yesterday, and
• 4:56
  Speaker 1: she was talking about getting a whole life policy and
• 5:00
  Speaker 1: how if you start saving when the kids are real young,
• 5:04
  Speaker 1: then when it comes time for their first car, they
• 5:07
  Speaker 1: have money. When it comes time for college, you're not
• 5:11
  Speaker 1: scrambling to figure out how to pay for it. Or
• 5:15
  Speaker 1: when they want to go on that vacation to Europe,
• 5:19
  Speaker 1: They have that money to go travel maybe a gap year.
• 5:24
  Speaker 2: Between high school and college. But if you don't start.
• 5:27
  Speaker 1: Saving early, then when it's time to do all that
• 5:33
  Speaker 1: fun stuff, you're either using credit cards, you're getting loans,
• 5:38
  Speaker 1: or you get.
• 5:39
  Speaker 2: Told, I'm sorry, we can't afford it.
• 5:42
  Speaker 1: Right.
• 5:43
  Speaker 3: And one of the detrimental aspects of loans and credit
• 5:45
  Speaker 3: cards is.
• 5:46
  Speaker 2: They're not free. You have to pay interest, especially if
• 5:50
  Speaker 2: you roll your credit card more than 30 days.
• 5:52
  Speaker 3: So if you do not pay that off every month,
• 5:54
  Speaker 3: you're going to be paying 15, 18, 20, 30% interest,
• 5:59
  Speaker 3: which gets very costly.
• 6:01
  Speaker 1: It does.
• 6:02
  Speaker 2: It gets very expensive. It's a waste of money. You're
• 6:04
  Speaker 2: making the banks rich, not yourself rich. Well, I realize,
• 6:08
  Speaker 2: and I.
• 6:08
  Speaker 1: Have student loans from way back, and I'm struggling to
• 6:12
  Speaker 1: pay off. And I realized that I am rarely covering
• 6:16
  Speaker 1: the interest on what I'm paying. So I'm not paying
• 6:20
  Speaker 1: back any of that principal amount. Now, how many people
• 6:26
  Speaker 1: have credit cards and all you're doing each month is
• 6:30
  Speaker 1: paying off the interest and then racking up more charges
• 6:35
  Speaker 1: on the principal? Maybe they should have learned some proper
• 6:41
  Speaker 1: budgeting when they were younger. So, Michelle, how would you
• 6:45
  Speaker 1: go about teaching budgeting to a fourth grader?
• 6:51
  Speaker 3: Fourth grade is fun because, you know, they are hopefully
• 6:55
  Speaker 3: getting a little bit of allowance for some chores they're
• 6:57
  Speaker 3: doing around the house, maybe doing the dishes, sweeping the floor,
• 7:01
  Speaker 3: taking out the trash.
• 7:03
  Speaker 2: I don't know what an average allowance is now, what, 10,
• 7:05
  Speaker 2: 20 bucks a week? Ooh, that's a lot.
• 7:08
  Speaker 4: That seems like a lot to me. I think I
• 7:10
  Speaker 4: got 50 cents.
• 7:11
  Speaker 3: But anyway, if you are collecting allowance, it is a
• 7:16
  Speaker 3: great way to teach budgeting, Francine, because if you have
• 7:21
  Speaker 3: a fourth grader that has maybe a need.
• 7:23
  Speaker 2: Or want in mind, maybe this fourth grader wants to buy...
• 7:27
  Speaker 2: Sparkle feathers. Sparkle feathers.
• 7:29
  Speaker 1: They are $ 30.
• 7:32
  Speaker 2: $ 30. And if they get maybe a $ 10 a week.
• 7:36
  Speaker 3: Allowance, how do you budget to get to $ 30?
• 7:40
  Speaker 2: You obviously have to work three weeks to get $ 30.
• 7:42
  Speaker 3: But what if you have other expenditures that come in?
• 7:46
  Speaker 2: Maybe you want to go to the movies with your friends.
• 7:50
  Speaker 3: Maybe you want to go to Dream App, get some
• 7:54
  Speaker 3: ice cream.
• 7:55
  Speaker 2: Or the book fair and buy a book. Or the
• 7:57
  Speaker 2: book fair and.
• 7:57
  Speaker 3: Buy a book.
• 7:58
  Speaker 2: What do those expenditures look like?
• 8:00
  Speaker 3: How do you limit those expenditures if you really want
• 8:03
  Speaker 3: to sparkle feathers? So there's an easy little spreadsheet that
• 8:07
  Speaker 3: you can do that will show your debits and your credits.
• 8:11
  Speaker 3: All right, this is kind of my anticipated activity for
• 8:13
  Speaker 3: the next three, four weeks.
• 8:15
  Speaker 2: I'm going to go out with my friends.
• 8:16
  Speaker 3: I'm going to go to the movies. I'm going to
• 8:19
  Speaker 3: do this. I'm going to go to the book fair.
• 8:21
  Speaker 3: And this is my allowance. This is what I'm giving in.
• 8:25
  Speaker 3: So how do I budget to get to that $ 30
• 8:27
  Speaker 3: for sparkle feathers?
• 8:28
  Speaker 2: What am I going to give up?
• 8:30
  Speaker 1: Maybe.
• 8:30
  Speaker 3: Maybe I'm not going to go to the movies. Maybe
• 8:32
  Speaker 3: I really want sparkle feathers more than I want to
• 8:34
  Speaker 3: go to the movies. So parents, we would love your feedback.
• 8:42
  Speaker 3: What are your kids saving up for? What do your
• 8:46
  Speaker 3: kids want? What do you say? Sorry, we can't afford it.
• 8:51
  Speaker 1: Because if we know more about how your kids are budgeting,
• 8:58
  Speaker 1: how your kids are maybe not budging, we can make
• 9:05
  Speaker 1: some videos for them to learn how to do it better.
• 9:10
  Speaker 1: And this is where I want to talk about Sparkle
• 9:13
  Speaker 1: Feathers TV. Sparkle Feathers is the star of Sparkle Feathers TV,
• 9:19
  Speaker 1: where we create videos to help fill the gaps of
• 9:25
  Speaker 1: what schools don't have the resources to teach. Today, Michelle
• 9:30
  Speaker 1: and I are going to make some videos for the
• 9:32
  Speaker 1: kids about counting money, about budgeting. And Michelle has a
• 9:38
  Speaker 1: great book she's going to read. So please subscribe to
• 9:43
  Speaker 1: Sparkle Feathers TV on YouTube and check out all of
• 9:48
  Speaker 1: this great programming for kids. So Michelle, your kids are
• 9:57
  Speaker 1: a little older now. And you say, you started when
• 10:00
  Speaker 1: they were really young. What kind of activities did you
• 10:06
  Speaker 1: do as a family around money management?
• 10:09
  Speaker 2: Oh, you know what? We just did this last night, Francine.
• 10:11
  Speaker 2: I'm so glad you asked. Y'all heard of the game Monopoly?
• 10:15
  Speaker 4: Oh, yeah.
• 10:15
  Speaker 2: Oh, yeah. That's a great money management game.
• 10:19
  Speaker 4: It teaches you, all right, so you got all these
• 10:20
  Speaker 4: properties on this board.
• 10:21
  Speaker 2: I want to buy a park place.
• 10:24
  Speaker 3: But maybe I'm going to have to go around to
• 10:26
  Speaker 3: collect $ 200 a couple times before I can buy a
• 10:30
  Speaker 3: park place, right? Or if I have a park place
• 10:33
  Speaker 3: and I want to put some houses or hotels on it,
• 10:36
  Speaker 3: how do I accumulate that money, right?
• 10:38
  Speaker 2: So I can afford to buy those hotels.
• 10:40
  Speaker 4: But in the meantime, I'm landing on all these other
• 10:43
  Speaker 4: properties as I'm going around.
• 10:44
  Speaker 3: I collected $ 200 when I passed out. So I can't
• 10:48
  Speaker 3: spend all my money on properties or hotels or houses.
• 10:52
  Speaker 2: I have to budget.
• 10:54
  Speaker 3: All right, so maybe I want to buy, what, James St. James,
• 10:59
  Speaker 3: or maybe I want to buy Philadelphia or whatever the
• 11:01
  Speaker 3: other properties are. I have to think about what expenditures
• 11:07
  Speaker 3: am I going to come along that the other players
• 11:10
  Speaker 3: own that I might land on, right?
• 11:12
  Speaker 2: I'm going to pay $ 25 here, $ 30 there, $ 12 here.
• 11:17
  Speaker 3: But I've also got to find a way to save
• 11:18
  Speaker 3: money so I can buy these properties.
• 11:20
  Speaker 2: Monopoly, it takes hours to play, but it is so
• 11:23
  Speaker 2: fun and is one of.
• 11:24
  Speaker 3: The best budgeting games out there. That is amazing. I
• 11:29
  Speaker 3: never thought of that anymore. Now, what age group would
• 11:33
  Speaker 3: you say that's best?
• 11:35
  Speaker 2: I mean, we.
• 11:35
  Speaker 3: Started in elementary, maybe late elementary, fourth, fifth, sixth grade.
• 11:39
  Speaker 3: You know, when they really, because you've got denominations on there.
• 11:43
  Speaker 3: You've got, it's not coins, it's dollars. You've got $ 1, $ 5, $ 10.
• 11:47
  Speaker 2: $ 20, $ 15, $ 100 a square.
• 11:49
  Speaker 3: It's a great way to learn how to count money
• 11:52
  Speaker 3: as well. It is phenomenal for counting, but it teaches
• 11:56
  Speaker 3: them to budget for something they really want on the.
• 12:02
  Speaker 2: Board, right? I love this.
• 12:04
  Speaker 4: It's pop-up.
• 12:05
  Speaker 2: You get the little chance cards, and.
• 12:06
  Speaker 3: Sometimes you've got to pay $ 50 here and $ 25 there.
• 12:11
  Speaker 2: It's just fun. It's kind of like a real-life scenario.
• 12:15
  Speaker 1: Okay, you just hit on something there. saving for emergencies.
• 12:21
  Speaker 1: Do you suggest that we start early with here's your
• 12:27
  Speaker 1: savings to buy your sparkle feathers and then set something
• 12:31
  Speaker 1: else aside in case of an emergency or in case
• 12:35
  Speaker 1: you have this great opportunity and you have this money
• 12:38
  Speaker 1: set aside.
• 12:39
  Speaker 2: Just for that?
• 12:40
  Speaker 1: Yes.
• 12:41
  Speaker 2: I mean, that's great at the earliest stage possible.
• 12:43
  Speaker 3: However, the emergencies I've noticed with my boys started happening
• 12:48
  Speaker 3: when they had their first vehicles, right?
• 12:52
  Speaker 2: So at that point, they've got a job, after-school job.
• 12:55
  Speaker 3: They've got to get to work every day. Maybe they're
• 12:57
  Speaker 3: driving themselves to school. They don't want to take the
• 12:59
  Speaker 3: bus anymore.
• 13:00
  Speaker 2: But they need a new tire. They need an oil change.
• 13:04
  Speaker 2: They need gas.
• 13:05
  Speaker 4: They need gas.
• 13:06
  Speaker 3: These things, they've got to pay for their insurance, which
• 13:08
  Speaker 3: is a planned purchase, not an emergency.
• 13:10
  Speaker 2: But things do pop up. when they have their first vehicle.
• 13:14
  Speaker 3: And for my family, that was kind of the first
• 13:15
  Speaker 3: experience with emergencies. Oh no, I have to get to work,
• 13:20
  Speaker 3: but my tire's flat.
• 13:22
  Speaker 2: What am I going to do?
• 13:23
  Speaker 3: Do I have the money to get a new tire
• 13:26
  Speaker 3: or to get it fixed?
• 13:28
  Speaker 2: That's a real life emergency. And that starts right around
• 13:31
  Speaker 2: high school when they have.
• 13:31
  Speaker 1: Their first cars. Did you prepare them? And so how
• 13:35
  Speaker 1: did you prepare them for that?
• 13:38
  Speaker 3: That started when they had the tooth fairy money, when
• 13:40
  Speaker 3: they put that Half of the money aside for their
• 13:44
  Speaker 3: tooth fairy money, their birthday money into a savings account.
• 13:48
  Speaker 3: It wasn't necessarily a piggy bank, which is great. Piggy
• 13:51
  Speaker 3: banks are great. But a savings account is more out
• 13:54
  Speaker 3: of sight, out of mind. Right. So you have to
• 13:57
  Speaker 3: go to the bank to get your money.
• 13:59
  Speaker 2: You can't just break into your piggy bank and take
• 14:01
  Speaker 2: a 20 out.
• 14:02
  Speaker 3: Right.
• 14:03
  Speaker 1: Right.
• 14:03
  Speaker 2: It's a little bit more difficult to go to the bank.
• 14:06
  Speaker 2: And that's why I don't have an ATM card. There
• 14:09
  Speaker 2: you go. There you go. It's a great solution.
• 14:13
  Speaker 3: Yes, the savings accounts are very beneficial. Put half away,
• 14:17
  Speaker 3: spend the other half. Or put it in your piggy
• 14:19
  Speaker 3: bank at home and keep it safe. But out of sight,
• 14:23
  Speaker 3: out of mind really helps.
• 14:24
  Speaker 2: I like that.
• 14:25
  Speaker 1: And it's all about building.
• 14:30
  Speaker 2: Muscle memory.
• 14:31
  Speaker 1: And I say that as in brain muscle memory to
• 14:35
  Speaker 1: build that.
• 14:38
  Speaker 2: Confidence that you have the money for what you need. Right.
• 14:44
  Speaker 2: It reduces stress too. It does. It reduces stress.
• 14:47
  Speaker 1: And also to build that discipline to take care of
• 14:54
  Speaker 1: your money. Because if you take care of your money,
• 14:56
  Speaker 1: your money will take care of you.
• 14:59
  Speaker 3: Right. Well, Michelle, is there any last words you want
• 15:04
  Speaker 3: to say? I'm just excited for you all to tune in.
• 15:09
  Speaker 3: As Francine had mentioned, we are going to read a
• 15:11
  Speaker 3: book for your children called The Penny Pot. And this
• 15:18
  Speaker 3: is a great educational resource that you can even pick
• 15:21
  Speaker 3: up at home.
• 15:22
  Speaker 2: This is on Amazon for really inexpensive.
• 15:24
  Speaker 3: I want to say it was maybe $ 20. And then
• 15:27
  Speaker 3: we're going to teach them how to count coins, how
• 15:29
  Speaker 3: to make change, how to count nickels, dimes, pennies, and quarters.
• 15:36
  Speaker 3: their first experience with point counters.
• 15:38
  Speaker 2: Okay, I have a question. Pennies, you know, they're going away,
• 15:45
  Speaker 2: aren't they? They are, but you know what? There's gazillions
• 15:48
  Speaker 2: of them in circulation. It will be decades before they
• 15:52
  Speaker 2: go away.
• 15:53
  Speaker 3: So even these little kids that are, you know, tuning in.
• 15:57
  Speaker 2: They're going to be encountering pennies for a long time. Good, good, good, because....
• 16:03
  Speaker 1: Well, of course, you can't really buy anything for a penny.
• 16:06
  Speaker 1: But when you get five of them, that's a nickel, right?
• 16:09
  Speaker 1: And that's what we're going to be teaching the kids.
• 16:12
  Speaker 1: Counting money. And then once they learn how to count it,
• 16:17
  Speaker 1: they can learn how to budget properly.
• 16:22
  Speaker 2: So please subscribe. Subscribe to this channel that you're seeing this.
• 16:30
  Speaker 2: So you can get more Parents Talk episodes.
• 16:33
  Speaker 1: But also subscribe to Sparkle Feathers TV where he's the star.
• 16:38
  Speaker 2: And I help Princess Francie. And we will see you later.
• 16:43
  Speaker 1: Bye.