Raising Healthy Families with Moms Meet and KIWI

How To Teach Your Kids Financial Literacy with Financial Expert Jen Hemphill

November 09, 2021 Moms Meet and KIWI magazine Season 2 Episode 2
Raising Healthy Families with Moms Meet and KIWI
How To Teach Your Kids Financial Literacy with Financial Expert Jen Hemphill
Show Notes Transcript

Setting your kids up for financial success means more than just creating a college savings account. Knowing how to navigate conversations around money with your kids can provide them with financial savvy and teach them financial literacy. Hear from financial expert, Jen Hemphill, about how to talk to your kids about money, why it’s so important, and how you can raise your kids to become fiscally responsible. 

Chrissy:

Welcome to Raising Healthy Families with Moms Meet and KIWI. We're giving you the tools to enjoy the beauty and chaos of life with little ones in the healthiest way possible. Hi everyone, I'm Chrissy Kissinger, host of Raising Healthy Families. Money can be a sticky topic to talk about with anyone, especially your kids. Knowing how to navigate those conversations can provide your kids with financial savvy and teach them financial literacy. Today we're joined by financial expert Jen Hemphill to learn more about how to talk to your kids about money and why it's so important. This episode is brought to you by MaryRuth Organics. MaryRuth Organics believes that making the best supplements for your health means creating products with non GMO, plant-based, vegan ingredients with the fewest number of allergens as possible. They do their best to find only the highest quality ingredients and to formulate good tasting products that assist in maintaining your health and aged your body on your way to wellness. Learn more about their wide range of products at MaryRuthorganics.com. Today we're joined by Jen Hemphill, a military spouse and proud bilingual Latina who helps the busy career oriented woman become the Reina or queen of her money and love her dinero more. She's a Latina money expert and accredited financial counselor, author, speaker and host of the Her Dinero Matters podcast. So thank you so much for joining us today.

Jen Hemphill:

Thank you, Chrissy for having me. I'm excited to be here.

Chrissy:

Are you tired of hearing traditional financial advice, feeling like your bank accounts look the same year after year. In her book, Her Money Matters: the missing truths from traditional money advice, Jen Hemphill shares her three part approach to help you pinpoint where to focus your financial efforts, and also acquire the money skills needed to connect the dots. Consider this book, your go to resource when you're feeling frustrated or confused about your money. It's a heartfelt approach to boost your financial confidence, create a renewed vision, and also get your financial house in order, this time with a no fail backup plan for the next time life happens. Learn more and Purchase your copy of Her Money

Matters:

the missing truths from traditional money advice on Amazon now. As an adult, I know how important managing money and finances are. But I didn't really realize how intricate it was until I was a bit older. And you know, I do feel confident in my money skills. And I know my husband's great with handling our investing. But I'm not really sure what to do when it comes to talking about money with our kids. So I'm super excited to get into the conversation with you today.

Jen Hemphill:

I'm excited.

Chrissy:

Yeah, so just to start, can you tell us about your background and why you decided to go into finance?

Jen Hemphill:

Well, I guess what I'm where I should start is I my college education has nothing to do with finance. I started honestly, as a biology major thinking I wanted to become a dentist, then somewhere along the lines when I couldn't find what they told me to find on the microscope. I said, this is not for me. So that's why I don't have the college education in finance, that came much later. And the other thing that I think is important to add to my background is I was born in Bogota, Colombia in a time where the economy was rough. And my parents encountered many financial challenges early on, and I witnessed that I witnessed the stress. I witnessed the arguments, I witnessed the depression, I witnessed all of that, and I knew money had something to do with that. I didn't know all the intricate details I was little. And then why I decided to go into finance is one partially that story that I had in my upbringing of not having enough and I wanted to be in a better financial situation than my parents. But also I became a military spouse and as a military spouse, we move around a lot and I wanted to have a career and the challenges of moving around and having a career what was important to me was a I did want to have a career but we also wanted to have a family and I did not because my husband travels a lot. I wanted to make sure that when we had children there is that stability of that one parent and the home so that was really important to me to one be a mom where I could go and volunteer. I didn't have that my mom was very much career woman and she was she felt like she needed to provide so she worked a ton and I wanted to be that mom where I could yes have a career I wanted the cake and eat it too. But also be there for my kids be there to be able to volunteer be there when they arrived home be there when they needed help with homework. So that was really important and the opportunity arose and I took it to be common accredited financial counselor there was a fellowship I applied. And here we are.

Chrissy:

That is great. I can say I've ever met someone who is an expert in finance but used to want to be a dentist. That's really, a really great Background. Thank you for that. So can you tell us a little bit more about what financial literacy is?

Jen Hemphill:

Absolutely, well, essentially, financial literacy is just being able to understand how to navigate and manage money with the skills like budgeting and saving and investing. But really, ultimately, what's missing is the emotional component, really the psychology, because if even if you have the opportunity in high school, or even elementary school, to be taught personal finance, in some way, shape, or form, they don't tell you how much of an impact the emotions really come into play when you're making financial decisions. But really, essentially, the essential definition is just being able to have those skills to manufacture and manage money. But one of those skills is really understanding how much of an impact your upbringing has and your emotions when it comes to your relationship with money. Yeah, for my added definition.

Chrissy:

Well, I guess that goes into my next question about why is teaching kids financial literacy so important, because you kind of just touched on a little bit like, we're not teaching that in schools and kids, that's not something that they typically learn. But it is so important. So can you tell us a little bit about why?

Jen Hemphill:

Absolutely, well, one is money, a part of money is values, values based. So for me, I would I value experiences over tr- and travel, over a new car, right. But it's different for everybody. So I feel it's important that as parents, and I think you can agree, I want to pass on my values, I don't want the teacher may have different values that I don't align with, let's say. So I want to be able to teach those values for them to carry that on, in their financial decisions. So that's number one. And number two, as we touched upon personal finance, education, it's out there. But it's not quite as common as it should be. And if you do get some personal finance, education in school, a maybe a week, maybe a week. And then I also think that third thing, I also think earlier that we get started, the easier it is that is not so scary, because the problem is was we don't talk about it. So it becomes scary, it becomes taboo. But if we make that conversation, okay, early on, like having just simple conversations with the three, four or five year old, it's, it makes it easier and makes it okay to talk about. So for me, those are three, the main reasons.

Chrissy:

Yeah. Well, and you mentioned this before to talk about money can sometimes feel taboo, right, just because of how culturally we've been raised or in our families, whatever the case may be, even from one adult to another. So are there ways that we can make talking about money as adults easier?

Jen Hemphill:

Yes. Well, we tend to think when we talk about money, it has to be about the bill that didn't get paid the debt that we are in, or that we're living paycheck to paycheck, all those things that bring us down, right. And we tend to think that's what a money conversation is, but, and that's intimidating. So who would want to talk about that? Well, I'm still in debt, I missed my bill, or whatever the case may be, and you feel guilt and shame and overwhelm. But money doesn't have to talk about money doesn't have to be that it can be about maybe a tip that you learn and that you implemented and you had success with it. And you're excited to share it with someone it can be about a book or a podcast that you listen to in a really had an impact on your life. Or it can be about money, when maybe you haven't been great at saving consistently, and you have been finding yourself for the past three months that you've been saving every month. So those types of things are money conversations that you can have, because what you're doing two things, one, you're by having that conversation, sharing those things, you're bringing your confidence up, right. And that's a huge factor in in really the financial decisions that you have. But at the same time, the second thing that you're doing, you're making it okay for the other person to also talk about money and share their wins and share the tip or share some of those things. So you open that up to be okay. And less taboo.

Chrissy:

Yeah, I love that too. Because I know it's like, you never talked to anybody about finances or your current situation and you never know what other situations people are in. But I love how you pivot the conversation of let's not talk about the negative things. Let's talk about things that are working well for us or things that we can share. So I love that. So the million dollar question no pun intended, and it could quite literally be you know, for our kids down the line. But what should we teach our kids about money? I know you mentioned you know, it's okay to talk to them at like three or four or five. But what should we be? What should we be teaching them?

Jen Hemphill:

I think the basic starting off the basics of money management, like a budget and just there, it can be very simplistic right for kids, they're not having to pay bills. But maybe they need to budget to buy a toy or, but really having that those skills of budgeting of being able to save of thinking about investing, what investing is of debt, like, what is that? Because that debt is not a bad thing, right? And it's not necessarily bad. It's when you lose control and not and you are able to manage it, that's when it becomes bad, because debt is there for a reason. Right? So I think also how credit cards work. But essentially, I think the most important thing that we can teach them is how to be how to be confident around your financial matters how to do that. And how you do that is setting that example is setting and not I know a lot of parents say to me, Well, I'm not good with money, how, what who am I to be teaching my kids, it's in those mistakes, or those things that you may not good at that you can improve? And in through that process. That's how you are teaching your kids you're teaching through example, because not everyone is perfect. I am not perfect. I still mess up to this day. And I'm supposed to have it all together. Right? And I'm very open about that. Because it's like, eating well. Are you eating? Well, 100% of the time? Can you do that? 100? No. Sometimes in life, you're going to want to splurge and you may go over the budget, and then it's okay, then you pick it back up and you get back on track. It's, it's that way. So I think just having them leading by example, even though you feel like I don't have it together. It's okay. Yeah, it's better to talk about it, then not say anything. And they're like, wondering what is going on? Things aren't not good, or whatever the case may be.

Chrissy:

Yeah, well, and my fear is apparent to is if I don't teach them early on, or if I don't even bring it up or pretend it doesn't exist, then they're going to carry that into their adult life, and they're not going to be prepared. Right. So it's, at least I think it's probably about finding some like middle ground a little bit. But I guess the question would be at what age do we start teaching your kids about financial literacy? I remember, a couple years ago, we were we were looking to buy a new car. And my son who was probably I don't know, like six at the time. He was he was asking, Well, why can't we just get one now. And I found myself like going down the rabbit hole of like talking to him about interest rates and like, the best time to buy and I was like, What am I talking to him about right now? Like, this is way over his head, like, but it was on my mind. And that's kind of how my mind was working. But I would assume that part of that conversation was probably okay, but what age would is best to really start teaching our kids about financial literacy.

Jen Hemphill:

When they're ready, when you sit when he starts asking questions, and he shows some interest and a car. That's the right time. And there is a good tool resource that gives you because I know you mentioned Well, I was started talking about interest rates, but that was way over your head, there's a red great resource by the CFPB. called Money as You Grow. And what that resource does, it gives you it gives you a guideline in terms of at age five they kids are because they gave you the psychological what they're ready for whether or not but it's a it's a guide, I use it as a guide. Because as a parent we know best right? We know best in terms of what our kids are ready for, if it goes is going to go over their head or not. But it's a great resource of what they're ready for. And examples of things that you can be teaching them at that age, right. And again, use it as a guide. But if you feel your kid is ready for Go for it, you know your kid best. So I know it's not a specific age. But again, it's about knowing when they're ready. If they're asking questions that have some relation, like you mentioned a car, whatever that may be. That is such a great teachable moment because they're asking you and you have an understanding of what they know and what they don't. And I'm always a big fan of asking questions back so what why do you think this if they're asking if you're, for example, your kid was asking about the car. You may ask him like what how much do you think it costs and and in a see where they're at in their mind? And that really leads to a fantastic, fantastic conversation. So I'm a big fan of like, yes. Once they're asking those questions, involve them in conversations and ask questions back to gauge where their mind is at and what their understanding what and what they're not.

Chrissy:

Yeah, well, I guess a follow up question to that would be like I know myself with that. It's actually really funny. So my husband, he's in finance, but I actually manage like most of our bills, because he doesn't want to have to deal with him outside of work. But I tend to find myself like stressing about money and finances and stuff. And so I often find myself some, the way that I have conversations with my children, is kind of projecting my stress onto them. So how, you know, when you do start to have that conversation, how would you suggest doing that in a way that doesn't allow them to kind of see your stress about it, but also teaching them the importance that it you know, it is something that you do need to think about and worry about and things like that.

Unknown:

Right. And I love that you, you have that awareness, because that's important, and how, because that's one thing that I had to be careful of where I was brought up in a household where All I heard was, we don't have the money, we can't afford it. So I continued to think that even though financially, maybe we were in a better spot. So I love that you have that awareness. So when you're feeling that way, just reel it back. And instead of it's not that you can't talk about your concern is how you verbalize the concern. So for example, maybe you're feeling like you don't have enough money for X purchase, right? It's not, we don't have the money, but rather, how can we and maybe the goal is, let's say, a trip to Disney for that family. And you're concerned that you're not going to be able to make it happen. So instead of we can't afford their trip to Disney is how can we and maybe you can get them in the conversation. This is what we have saved for Disney. And maybe we'll be able to save X and it all depends on your children's ages. So I do have to gauge that. What do you what are some suggestions, suggestions of what we can do to get to really reach our goal of our family going to Disney World? Right? So get you can ask those questions, because you just never know, some they might think of something you didn't think about. Right?

Chrissy:

Right. Right. Yeah.

Jen Hemphill:

So I would get done. But I think it's just a matter of how you verbalize in instead of those negative thoughts, repeating those really thinking of ways to rephrase those things to say.

Chrissy:

Well, and that leads into my next question, too, because I know we've all been there where our kids are asking, Well, why don't we have the same car that Johnny has? Or why can I take this trip or, you know, comparing to other people, which we as adults do as well, right? So how how would you tactfully explain to your kids that, you know, if your family like you just said, like with Disneyworld, if they don't have enough money to do it at all, like even if they're not planning on saving it? Or if you know, their kids want to purchase something really expensive, and it's just not in your wheelhouse or your budget. How would you explain that to them?

Jen Hemphill:

So if it's something let's say they want to purchase and that you're not able, it's expensive, and you're not it doesn't fit your budget, but you can have a conversation. Okay, Joe, I don't know I'm making up a kid's name. You want to buy this toy? And this is how much it is we can we can contribute this amount. And this leaves, let's say the toys, I don't know. 50 bucks, I know Toys are expensive, 50 bucks, and you're like I can contribute $10 making things up, How can we how how do you think you can get the other $40? And they may say well, I've got $10 saved up? Oh, okay, now we've got $30 left. How can we get to that? So it's asking them, what can you do to get to that? And it could be it depends on your household that they do extra chores that maybe you don't necessarily normally pay for it. But they offer and you're like, Okay, well, maybe we can do it this way. Or maybe they say you know what, I'm going to wait to my birthday. Because I know I get money for my grandparents. That so it's asking again, I'm a big fan of asking those questions and seeing where they're how they're going to resolve that. What what they're, you know, where their mind is that and the possibilities and the solutions that they come up with?

Chrissy:

Yeah, well, I find like I run into this a lot. If I have, gosh, if I take my kids to target or to you know, any store, and of course they're picking out like every toy under the sun. And I always find myself saying no, that's too expensive. And it's not even that we can't afford it because we can but it's more of a principle Right? Like I'm not paying like you said $50? $50 for a toy. I know they'll play with one time. But my, my my response always is no, that's that's too expensive. Let's look for something else. Or like my son has a book fair at school this week. And he just wants like 10 bucks and I'm like, let's rein it in A little bit and you can have a couple. But how do you like instead of saying that's too expensive? Is that the wrong way to explain it to them? Or because you know, like, again, like, I'm just not going to buy that from them? Because I don't agree with the price of that product. So how would you go about that conversation.

Jen Hemphill:

I know with my boys, because I've got two boys, I've always I've always I've done two things, because I've experimented because I, you know, parenting, there's no, yeah, book. I mean, there are books, but I'll have different opinions, right? So just with money, I'm just going to give you some things to consider, right? This my answers aren't necessarily the right answers for you is just something for you to consider my approach is more with teaching personal finance is this is some things that I can recommend this as my experience, but at the end of the day, you know, best you have to trust yourself that you know, best. So basically, with my boys, what I've done is like, as I've mentioned, I've experimented. So I've done a couple things, I will say, Well, I have this money, that can go towards that toy, and may not be enough. So you can either, you know, figure, let's figure out how you can get that toy, or how they can solve come up with solutions. Or another way that you can do is like, is basically one is again, this is the money that I can provide because and because this is also involving them on the household finances, this is what I have, because we also, let's say we have an upcoming bills such and such and not to like, not in a way that is stressful, like oh my gosh, my parents have to do all this right, but more just casual. Now we have to do this, these are just a responsibilities that we have. So they have awareness that there's other things that money needs to go towards to Right. Um, but also another thing, I'm sure we're gonna get into the the conversation of allowance. I have seen parents where they give kids their allowance allowance enough to enough try this, my kids have worked kind of off and on with allowance. And then they're like what we have last night we don't, because I never really like found for me, I'm like, I was struggling like what the right way to do with allowance was, but one way that I really thought was was fantastic as the as the family gave their kids allowance. And they were very clear, this is this allowance, you need to use this money for this. So basically their allowance for what was for whatever they needed. But they were also responsible. These were more teens, they were also responsible for clothing. So if they decided to spend $100 on sneakers, and then all of a sudden they didn't have underwear.

Chrissy:

Right? They're gonna learn quick.

Jen Hemphill:

That's how they learn, right? So you can also contemplate an allowance, but being very clear as to what that allowance is, is what the purpose of the allowances for and then from there, it's an opportunity for them to to fall flat on their face. And you're right. This is the time this is the time we want them to fall. So we can pick them up and help them and teach them versus later on down the line where it could be more detrimental, like when they're out in the real world.

Chrissy:

Right. Right, for sure. Well, you touched on this a little bit. But I'm curious around your thoughts of talking to our kids about our household bills? Should is that something we should be talking to them about? Or should we only bring it up? If it comes up? How would you go about that?

Jen Hemphill:

In my opinion, again, this, the decision is ultimately yours. In my opinion, yes, I think you should bring it up. It's how you verbalize the bills, I you don't want to say Oh, well, I got into like the negative. We've got too many bills. But it's more this is these are monthly responsibilities. Because at the end of the day, if the whole family has an understanding of the financial of like the bills and what's going on financially, then the kids, they might not be up to ask for $10 or whatever it is every single week. Like let's say you have teens or preteens, right? Because they know that that takes away from the bills they know that's going to take away from those family goals that you're trying to reach. So that so it's a met when everyone in the household has an understanding of what's going on financially and the goals that you're trying to reach financially, then their mind is going to be thinking differently because they want to contribute. Right and a way to contribute to those financial goals as a family is doing their part whether it be maybe like in between spouses, right like maybe I know I love coffee, so I'm my if I know we're trying to reach those My financial goal, I might not go to the coffee shop as much, even though cutting the lattes, that's a whole nother conversation because

Chrissy:

Well you're from Columbia so you have to.

Jen Hemphill:

I am a big fan of yes, you can cut stuff. But it's not just about cutting expenses. It's about also seeing how you can make more money. Right. So that's that's essentially just getting the household, the whole family involved in that conversation. And understanding just allows them to better make financial decisions and the kids that allows them to oh, well, maybe I should ask, maybe I should do do do this instead to help.

Chrissy:

Yeah, yeah, that that conversation actually just happened with again, with my son, even just with like the water bill, right. He, well he wanted to, I don't even remember something with like a bath or whatever. And he was like, well, the water is free. I mean, we get that whenever we want. And I was like, Well, no, actually, it's not like nothing in this world is free. First of all, right? And we like and Oh, and another thing we always talk about too is he asks me why like his teachers, and why I don't have off in the summer. And I said, Well, we work, you know, daddy, and I work. And we work so that you have a house to live in. And you know, we can have these nice things and all these things. So it is interesting seeing how like even just that basic conversation of No, you need to pay for the water, it's not free. So it gives them that better understanding of oh, okay, like it shifts their thinking a little bit. And not everything is just provided to them. Even though it is as a you know, as a kid, the parents are doing the providing, but you had talked about this in your upbringing, with your experience, but should we ever talk to our kids about the money problems or issues that we have? Or should we try not to let our kids hear conversations with our partners about them? Obviously, you know, whatever is going on in the family. If there's money issues, you need to talk to your partner about it. But should we not let our kids hear that? How would you? How's that conversation typically go?

Jen Hemphill:

Yeah, I think it's a personal call from family to family. Because depending on the financial issues, if it brings you so much stress that maybe you're not able to verbalize in a way that if you find yourself verbalizing in a way that's going to impact your kids like negatively, then maybe right now is not the time to have that conversation. So it's just basically where you're at, mentally, because if it's so stressful, to even talk about, like, you just have to find a way or a time where it's better where like, you can talk to your kids and say, Hey, right now, times are tough. But we're going to get through this right. And of course, you can insert other things that not just that, but it's good to have for them. Because if I look back to the times when my parents were having a difficult time, they didn't say anything. I just knew things were bad. I had nightmares at the works like because I knew financially something was wrong. Like it was it was bad. I mean, it impacted me a lot. So I think it's a hard call. Because I feel like if I knew and had a better understanding it was going on, I would have dealt with it better. I just didn't know what was going on. So it was stressful, right. But again, maybe there weren't in a mental state to be able to verbalize that. So it's a hard call. It's, I think you just have to gauge it and see how you feel. And then maybe, see maybe later on we'll address it. But right now maybe it's not the right time.

Chrissy:

Yeah. Well, my next question. It's funny because it could go either way for adults or kids. And I think to how you act as an adult, we'll definitely impact our kids. But how do we explain to our children that it's okay, you know, to have the spending money, but it's also really important to save, because I know even some adults struggle with that. And even just talking to some friends and you know, people I know, some people have like, a ton of money in savings, and then some people have, you know, $100 So, how do you how do you explain that to your kids, especially if you yourself are not great about saving?

Jen Hemphill:

Think is having a conversation of the value that money brings. So the value that money brings when you spend and the value that money brings when you say so when you spend you spend on food, so what's the value in nurtures you, right? Unless maybe you're eating too much McDonald's or something, but the intention is to nurture your body or when you save the value there is for an emergency in what value does that bring? It keeps you from going into debt, or it keeps you it just keeps you in a better financial situation than if you didn't have it or Another thing that the va- another value for saving money is your if you're, let's say you're saving to travel is you're able to go to travel. And it's nice to know that you have that money, then not have to arrive at your travel destination and just penny pinch, because you're like, Okay, I just had the enough money to get us here. Now we can't do this extra curricular activities. We've been there. And it's not as fun. So it's about the value the money brings for that purchase when you spend or when you save so and just really painting that picture for them. Because you know, your kids. So some things might trigger like, some excitement, and you know, your kids love. And that sounds like your son loves cars. So bringing those things that are really of interest to your kids to that value and how maybe they value spending and saving would be helpful.

Chrissy:

Right. Well, that. And also I feel like, you know, adults are like this, too. But everyone kind of wants that instant gratification of I want it now. So for instance, when we were in the store the other day, and my kids wanted a toy, they wanted it right now, right? And I said no, because I just you know, I'm like, the holidays are coming up, we can see. But I guess like that's where the question comes in, like, at what point because if you could afford it at that time, even if our kids had their own money to bring, but you do want to teach them like, let's wait, let's like you don't want to have an impulse buy, or let's wait to see if it's something that you actually really will play with or need. Like, how do you have that conversation? Because I know, for me, like, if I'm in a shoe store, I have a really hard time telling myself, wait and see if you actually need those shoes. So how do you explain that to your kids? Like, so obviously, you know, saving for long term for like trips and things like that's important. But how do you teach them to save their money when they want like a toy right away? Or they want something right away?

Jen Hemphill:

Yeah, I think there's two things and it depends on your on your kid too. But you can have that conversation of like, okay, this toy, why do you want to know? Right? And they'll answer wherever they answer. And then from there, you can ask the next question. Do you? What if you were to wait a couple weeks or a month, whatever that might timeframe may be for you? Is it how is it going to impact you? Like how you want to ask those type of questions to see, to have them think big to really have have them get to a point where they might say, You know what, I really don't need it right now. But some kids, depending on their age, their personality, that might not be the way they learn, right? It might be because sometimes my kids have had to, and my kids, they have to, they have to learn by actually making the mistake, even though I've already talked to them about it. They're like, No, no, I still want it. And then I'm like, okay, use your money up. And so they'll use their money. And then couple weeks later now I really didn't want that game, I regret my decision, right? Or if you know that in the past, they have made a decision and they regret it. Take that example, if maybe what they learn from that and apply to this conversation. Does that make sense? I know going I'm not giving specifics. That's really, but I think thinking through those, those times will help.

Chrissy:

Well, so we talked a little bit about whether or not we should involve our kids with household bills. At what point should we start involving our kids in household financial decisions. So you know, anything that really impacts the financial decisions around owning your home, things like that, at what point would we start involving our kids with that?

Jen Hemphill:

I think for those, if they're starting to think about college, maybe they want to do an international trip those big expenses. Because schools offer those international trips on or they want to buy a car. Or maybe you're thinking they're driving age and you're thinking about lending them a car, you're one of your cars. Those are the times that I think would I mean, you can have those conversations earlier, but those are really the times that you need to be having those conversations and involving in in those household financial decisions because I have a child that just started college and as much preparation as we did financially, and and just having conversations within there are some things that took me by surprise. You don't know what you don't know until you learn it. So I think knowing that just do as much preparation as you can but also know that you're not going to necessarily get it right but having had that preparation is better than having not done anything at all. So I think in that And that time where they're making are about to make a big financial decision or you have to do a financial decision or a financial decision as a family, those are the times to involve them.

Chrissy:

Well, this leads into my next question, which is probably everyone wants to know your opinion. I'm we talked about this briefly, but your opinion on allowances? So should we pay our kids for doing chores? I am awful at like, and I think you said the same thing. I'm pretty bad at being consistent with it. But I know like, with my kids ages, they're they're eight and four, they're obviously not out earning money on their own. So should we be paying our kids for chores? And if so, like, are there specific chores that they should do for free and then not get paid or get paid for? What is your opinion on that? Because I would love to know.

Jen Hemphill:

Yeah, my opinion is we shouldn't pay them for chores. But it's a personal decision. Right? Oh, that's just my opinion. Because I feel and that's I think that's also why I struggle with allowance is I didn't want I was like, Okay, this is, we're giving you this money weekly. But this is not a way for me to to pay you to do make your bed or clean your room. But I was still like fearful that that's we were communicating that in some way, shape, or form even verbalized. That it wasn't. So I think, if you're clear as to what the allowances for, I think you you should be good. But personally, but that again, I think it also what drives your kid, maybe you are having some difficulty with your kid and doing the chores. And maybe because each kid is so different, you know, and so maybe for that particular kid, but then it might cause issues with the other kids. But you need to know your kid, and if that's maybe what drives them, and you've tried everything, and maybe right, It's a hard call?

Chrissy:

Now do you-what's the difference between like an allowance and paying for chores? Like do you give your kids a set allowance for each week, regardless of what they're doing? Just saying like, here's some spending money, you can save it or spend it? Or is the allowance directly tied to them doing specific things around the house?

Jen Hemphill:

Nope. The chores are a part of being a part of the family and contributing to the the family, the family household responsibilities. So it's not tied at all. For me. It's not.

Chrissy:

It's so funny. You say that too. It depends on the kids too. Because I literally like if my son, you know, he wants like something from ice cream. And I'm like, alright, well, you need to earn your money. Let's want you help me rake some leaves or do whatever in the backyard. He wants no parts of it. I'm like, You need to learn how to earn money, right? Like, but I'm also like you were I'm like, I'm not paying you to make your bed because that is a life lesson and life skill, like you just that's a part of being a human being. So I always struggle with that. But at the same time, right now, like they're only getting money at birthdays and holidays, or whatever the case may be because we're not paying them a set allowance. So I always struggle with that. So I guess you know, the age I had mentioned, my kids are a little bit younger, but what age would you suggest that kids start to get a job? You know, for me, it's like, gosh, they have their whole lives to work. But you also want to teach them fiscal responsibility and money management. Obviously, they can't get like a real real job. And I don't even know I guess it depends on the state, whatever the age may be, but even if it's like raking leaves for a neighbor or washing someone's car, whatever the case may be, at what age do you typically suggest that that

Jen Hemphill:

Yeah, I think there's different factors to happens? consider with a child their schedule, if they're athletes, and they have a regular rigorous academic load and maybe there's too much to get a job. Or maybe just find because when you when when I think of a child getting a job or a teen getting a job, it doesn't mean that once they have a job they're just like working all year round. So it could be just like a summer gig, right a summer job or it could be just as you mentioned, the fall raking leaves or maybe just someone needs to take care to take care of someone to take care of their dog, maybe dogs sitting or walking the dog. So it could be things like that. And I think with when considering that I think they have to go and you have need to have that conversation with them to go into that job with an intention of what is the goal with the money that they are what is that money going towards? What are they going to do with the money? It's not just go and make some money but okay, what is that money for what so really going into intention is I think a really important part of the conversation. But again, with the jobs I think it's not necessarily that you work you're around but just whenever things are Are you have the opportunity to do so that I mean that I know, there's not specific age that I mentioned? Because I think is one you can in your state. But I hope that answers your question.

Chrissy:

Yeah, no, it definitely does super helpful. One of the things that I always like I never really thought about until I was an adult was building good credit. Right? So how do you suggest parents help their kids understand a what credit even is? And how to get them on the road to building good credit? You know, a lot of times building a credit involves having a credit card or having some debt, right, that you're paying off. So how do you? How do you suggest getting your kids to understand that concept?

Jen Hemphill:

So I think just explaining them that basically credits just the ability to borrow money, with the understanding that they're going to pay later, and just being financially responsible to pay that money. Because if they're not, then that will damage their credit that will, you know, that will count against them, and instead of towards them, and you can actually start helping them build their credit. But again, you have to know your child is by putting them on a credit card, and you have to put, you have to put some basics, how do you say stipulations? Right? I know we did this with my older child to start, help him build credit, because in my mind, it will help whenever he wants to buy his own car where I won't have to cosign. That's the that's the goal, the goal here, so we'll see how it all works out. But we did put him on the credit card with having that conversation of okay, you can put money on the card and not have to, or not money, gas in the car with a credit card and a half to ask us each time. But if you're wanting to buy clothing, and you want to spend over $100 or less have a conversation, right. So really a stipulating and making sure that they know what you're, they're allowed. And you can put a parameters of how much they can spend on that card. So that's a way to help them build credit. But again, you need to know your child and have that serious conversation because it's going to affect your credit, right? If they go over and it puts you in a bad financial spot. But just having them understand and given them examples, I think is good of what a good responsible being financially responsible looks like and what the opposite view looks like, and how it impacts like, if having bad credit, why is it not good to have you know, bad credit, it's going to impact the the, the purchases that you make in terms of the interest, like if you're wanting to buy more house or a car, you're going to have a higher interest rate, it can impact the card. So credit cards that you get, and those those sort of things. So I think having those examples as well, will help for sure.

Chrissy:

Okay, just a few more questions here. Before we wrap up. I'm curious as to what your thoughts are, I'm not sure I know, I learned this as a kid. I don't even know if this is a thing, because my coworker had never heard of it before. But the envelopes system. So, you know, I was taught and I'm trying to teach this to my kids now, you know, they have three envelopes, one for spending, one perceiving and one for charity. So every time they you know, get a little bit of money, they'll put some it's like a percentage that they put in each envelope. What are your thoughts on that? On that process? Or if people manage or teach their kids that way?

Jen Hemphill:

I absolutely love it. There's actually an I'll have to look it up if you want I can send to you there's actually a piggy bank that is separate. They use there used to be there used to I'm sure this should sell them still. And it was absolutely amazing. And it came in different colors, really nice piggy banks, where I literally says save as spend, invest, charity, and they would just put the coins or dollar bills and in each part segment of the piggy bank, you can open it up. So it was as fantastic. I love it because it gives them an ability to ask Will that just save but also learn money management. So if let's say they were gifted $30 And they put $10 in each of those pot in these pots, right? And maybe they want to buy then later on down the line. They're like, oh, there's a toy wanna buy and it's $20 but they only have $10 and they need $20 total. So they have to go through the thinking process. Should I wait till I get more money? What should I do in this case and not really, maybe they don't want that toy as bad as they think. Right? So I think it's really I'm a big fan because it gets them into the habit as well of putting a way for spending and saving and charity or investing those types of things.

Chrissy:

Yeah. And at what point do you typically suggest like I always struggled with us of buying something for your kid with, you know, your money versus telling them they need to buy it with their own money?

Jen Hemphill:

That's such a great question. I think it all depends on the money that they have the money they are able to bring in, whether it's through allowance through odd jobs that they may have, I think you have to look at that. Because you can also if they're, let's say, they don't have an allowance, like my kids, like my youngest now that lives with us who doesn't have an allowance right now, like I go off and on, they all know what to do. But if like, let's say, they don't have an allowance, but you like they're doing things that you value, whether getting good grades at school, they're responsible at home, they're doing all these amazing things that could be, in a sense, like an allowance that they could use towards whatever they want to buy. So I think it's just a call that you can make with your parents, you know, as a parent.

Chrissy:

Okay, so I know you're going through this right now. But I'm, like, already worried about it. My kids aren't even like out of elementary school yet, but college is a huge expense for many families. I know, you know, I still have student loans that I'm paying off. Right. So how do you suggest that families prepare for this? Should parents get their kids involved in the financial aspects of going to college? Whether they plan to have the their their child contribute or not? Student Loan discussions, things like that? How do you Oh, my goodness, I'm like, dreading that.

Jen Hemphill:

Well, I think you need to, one have a conversation with your partner and decide, okay, with college, are we going to pay all of college? Or do we, should we have our kids pay all of college have their own are we going to just contribute a certain amount, have that discussion first, and save, like you can like in a 529. But what's important as parents is to never put college savings as a higher priority than our overall overall retirement savings. We don't know what our kids are going to do when it comes to that college age, or they might not want to go to college, who knows? Like, we don't know. And you and we want to be responsive, fiscally responsible, in the sense of we don't want if we prioritize our retirement over the college is not to say not to save for college. But if we prioritize, we are not putting them in a position where they have to take care of us. Right. So we want to think that way. Right? So we want we want to have a discussion with the partner to see like, when it comes to college, how much are we contributing? Or if we're contributed at all, like have that discussion? We also want to have a discussion what more when it's nearing college time, in terms of with your kids on college costs, and the ROI, the rate on return? Like if they want to be a teacher, does that make sense to pay $100,000 In college over the four years, right? So you want to have those conversations, and you want to have an understanding of financial aid, the grants and everything how it all works, because speaking I mentioned we had some surprises. Our kid for example, that is in college right now, he was fortunate he did well in school, so he got some we didn't qualify for with FAFSA, our estimated family contribution is pretty high. But because of his grades, he was granted some some merit scholarships or from directly from the school and some grants. But how depending on the school, let's say we also my husband in the military gifted my pass down into his his GI Bill, oh my goodness, my brain went his GI Bill. So cuz it's a great benefit. But what happens with some colleges with whether it's GI bill or with other scholarships that they get outside what they do, they deduct. So if let's say the kid is getting 20-$30,000 for the year for that college, and the tuition is 50 I'm just making up numbers because some colleges are a lot more than that. And if they get that essay 30 I don't know what I said 30,000. Yeah, and then they get, I don't know $5,000 in scholarships, let's just say what they do some colleges not all the key thing is displaced displacement. They subtract the 5000 from the 30,000 they're giving so it's like you're climbing up this hole, you're like, Oh, that 5000 Now I have less money to pay horn intuition, and it's not because they're in there, how they work. Some colleges now, they did talk that. So it's like, all that work now have to come up with another 5000 bucks. So it's puts you on a s ot to potentially take student l ans out. That's how it's an Y ah, that was my surprise.

Chrissy:

Yeah. Oh my gosh, it's like a whole other thing we do. And we have, you know, a college savings account for both of our kids right now. But I feel like it, you know, my, like, my parents will contribute for the birthdays and holidays. But that's basically it. So I feel like we need to probably be dumping a little bit more into that. But to your point, we should be focusing more on dumping into like paying off my own student loans or paying into our retirement and things like that. Yes, yeah. Lots of things are more I feel like I could talk to you like all day. But I do feel so ready to, you know, tackle the money conversation with my kids. And I think the biggest takeaway for me is knowing how to have the conversation with the kid based on knowing who they are right? Like, you might talk to one of your kids differently than the other based on their personality or how they value things. So it's really good to know that there are ways to set them up for financial success in various ways. So thank you so much for joining us, Jen.

Jen Hemphill:

Thank you so much for having me. I enjoyed it.

Chrissy:

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