Episode 348 – Are there things you wished you had learned about money when you were a kid? In today’s episode, special guest Hannah Kesler talks about some of her ideas on how to raise children to become financially savvy adults.

Transcript of Podcast Episode 348

Welcome to Security Mutual Life Insurance Company of New York’s SML Planning Minute, where we share concise and thought-provoking financial ideas for individuals, families, and business owners. Security Mutual, the company that cares.

Bill Rainaldi:

Hello, this is Bill Rainaldi with another edition of Security Mutual’s SML Planning Minute. In today’s episode, money lessons that stick, teaching your kids what you wish you had learned with special guest Hannah Kesler.

Hannah Kesler is a leading authority on the Infinite Banking Concept^® and the Money Multiplier Method^®. She travels the country showing people how to take control of their money, build wealth, keep the money in the family, and create a life full of freedom and happiness. She is also the host of the Money Multiplier Podcast. Hannah is also the author of the book The Companion, which is about teaching kids the important life lessons that any child or adult needs to hear. It is available on Amazon or Barnes and Noble, or at the website companionbook.com.

Hannah, welcome to the program.

Hannah Kesler:

Thank you, Bill. It’s a pleasure to be here. I’m even more excited to talk about my favorite topic, money!

Bill Rainaldi:

Sounds good. Hannah, what do you think people are doing wrong today about teaching their kids about money?

Hannah Kesler:

Yeah. I don’t think it’s anything that they’re doing wrong because, get this. Actually, there’s a statistic out there from Fidelity that shows 56% of Americans did not talk about money with their parents as a child, and 82% of them wish they had. So, I think it just goes back to generations and generations of when we as adults aren’t taught to talk about money around the kitchen table, we don’t know how to carry that legacy and that conversation into the next generation and our heirs in line.

Really, my biggest advice would be money is such an important part of life. It allows us to do everything that we want to do. It gives us the resources, and we just need to start making it a common subject and stop making it so taboo.

Bill Rainaldi:

Yeah. Well, financial education is certainly something that’s lacking with children. And that’s not something that’s new, that’s something that’s always been the case. I’m just wondering where you start? What age do you want to start talking to kids about money, and what are some of the basic concepts you want to make sure you get up front right away?

Hannah Kesler:

Yeah. I honestly think as soon as they can really talk and understand, that’s when we need to start bringing it around the kitchen table. My biggest advice, number one, is start early and integrate money into daily life.

As parents, we should be discussing how we earn it, where it goes, where we store the money, and how we decide to spend it. Then from there, I would even add encourage the savings and the budgeting. Give your children an allowance and tie it to chores. I remember growing up, my duty was the laundry and my brother’s duty was the dishes. And actually, every single week, we’d flip back and forth. I remember getting paid $7 a week from Mom and Dad until I had that conversation with my brother that I was like, “Hey, Zack, I hate doing the dishes.” He’s like, “Well, I hate doing the laundry.” I’m like, “Perfect! I’ll keep doing the laundry, you keep doing the dishes.”

Then we would just make our allowance money, and then we would actually go to Price Chopper, growing up in the Kansas City area, we had Price Choppers in town. We would actually spend our allowance money on, whether it’s the magazines or the toy aisle, mom and dad would take us there and that’s what we were allowed to spend it on because we had to earn it in order for us to spend it. We just weren’t just given the money.

Bill Rainaldi:

Well, I hope you were both paid the same amount at least.

Hannah Kesler:

Yeah, we were.

Bill Rainaldi:

Okay, good. Can you think of any mistakes that you or your parents might have made back then that, if you had to do it all over again, you might have changed today?

Hannah Kesler:

Yeah. I think one thing that I’ve really been thinking hard on, and I actually got this from a lot of my colleagues here at the Money Multiplier, is almost teaching like a three-cup system. We have three different cups. One of the cups is your “save” bucket. The second cup is your “spend” bucket. Then the third cup is your “give” bucket. Really, what I want to do is I want to direct 50% of what I make into my save bucket, 40% goes into my spending, and then 10% goes into my giving. So, then, I understand the importance of paying myself first, a.k.a. saving bucket, the 50%. Because let’s be real, they’re kids, they don’t got bills. They can save 50% of what they make, right?

But then, even the spending bucket. I heard this story one time where this gentleman has a young child and the child had a birthday party coming up for one of his kids. Most of the time, what parents will do is they’ll go out there and just buy a random toy for the child so that their kid can show up with a present to the birthday party. Where this gentleman, he doesn’t do that. He says, “All right. If you want to go and give your friend a gift for their birthday, you are going to use your own money and you’re going to purchase this yourself.” When he walks into the store with only $14 in his pocket and he wants to go buy these Pokemon cards, well, he’s not going to be able to buy the $50, $20 Pokemon cards. “All right, I’ll pick up a $10 one, and then four $1 ones.”

Then when he went to that birthday party and he showed it to his friend, he was so elated. It just made him so happy to know that, “Oh my gosh, I did this for my friend.” It’s also even teaching him the generosity that you need to learn. It’s just not given, you need to really care for the people out there as well. I honestly just think another big important lesson is really getting the kids involved in the decision making and let them participate in family decisions. Whether it is that birthday party, or the meal planning, grocery shopping, or even planning for that next family vacation. Get them involved in those decision makings.

Bill Rainaldi:

Wow. That’s quite a bit. I know most kids would have no idea about any of that stuff, so that’s really fantastic. At what point do you start talking to the kids about what they ought to do with the savings they have? Where they ought to put it, or should it be invested, or whatever?

Hannah Kesler:

Yeah. We do that very, very young. I would say right around the ages of six to eight is when we start talking about, “Okay, let’s take this money that’s sitting inside of our savings bucket,” whether you want