August 28, 2024 • 25 mins
Ever wondered how to equip your kids with the skills to manage money wisely? In this episode, we share things we do with our kids to teach them about money!
We discuss how guiding your children to save for big-ticket items, like their first car, can instill lasting lessons in planning and patience.
We share practical tips and strategies for integrating financial education into your parenting. This is one topic we love to talk about, come join in on the conversation with us!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
And in the future, when they're big enough, we do
hire someone to mow the yard,and I would probably be willing
to pay them to do that instead.
If they want to do that,welcome to what your CPA Wants
you To Know.
Speaker 2 (00:19):
Tax and accounting help can be expensive, so we've
created this podcast to helpguide you through it all and
make you feel like you have aCPA in your back pocket.
Speaker 1 (00:29):
I'm Carson Sands.
Speaker 2 (00:30):
And I'm Taryn Sands.
Speaker 1 (00:32):
I'm a CPA with over 10 years of experience helping
people start and grow theirbusinesses.
Speaker 2 (00:38):
And I'm an MBA with a specialization in marketing and
entrepreneurship.
Taxes suck and we want to makesure you don't pay more than
your fair share.
Speaker 1 (00:48):
We're here to share everything your CPA wants you to
know in a fun and easy tounderstand way.
Let's get started.
Speaker 2 (00:56):
Let's do it Today.
We have a little bit of adifferent episode for you we are
going to be talking about Today.
We have a little bit of adifferent episode for you.
We are going to be talkingabout finances with your kids.
So I guess this is a little bitof a parenting episode plus
finances.
So a little bit different.
Speaker 1 (01:14):
Yes, we are parenting experts.
We have three children and allthree are still alive.
Speaker 2 (01:20):
We do keep our kids alive together, among the other
things like running thisbusiness and this podcast, which
it's been a crazy summer.
So this is the first time we'vesat down in a while to podcast
and I actually was messing upall of the technology.
So we are back at it and thekids start school very soon, so
we're excited to get the ballrolling again and feel like we
(01:42):
have some sort of schedule theball rolling again and feel like
we have some sort of schedule.
Speaker 1 (01:47):
If you are missing us every other week because we're
only posting every other weekepisodes now, then you know
we're sorry for that.
We know that most people arelike I need accounting at least
once a week.
Speaker 2 (01:56):
Definitely.
Speaker 1 (01:56):
But I'm sorry to hear , and some people might say that
it's still two episodes toomany per month.
So I guess you know it dependson who you are.
Speaker 2 (02:06):
Such an exciting topic, I know, but it has been
really nice for us to take alittle bit of a break and go
down to two episodes.
So, if you didn't notice yet,we are just doing a bi-weekly
episode now and I don't knowthat we will go back to weekly,
but if we do, it'll definitelyprobably be during tax season,
whenever people actually want tolisten to tax and accounting
(02:28):
advice.
Speaker 1 (02:29):
Well, and most of the episodes we have are still
applicable.
Tax laws do change, but a lotof them are general information,
and so we had so many things.
We wanted to get out there asquickly as possible to help as
many people as possible,especially once we stopped
taking new clients.
And then now we feel likethere's a great deal of
(02:50):
information out there.
The biggest things we wanted tocover we've covered, but
there's still a lot of otherinteresting things and helpful
things that we can talk about,so we'll still be coming at you
every other week.
Speaker 2 (02:58):
Absolutely so.
Today's podcast episode theidea came from something I
shared on my personal Instagrampage about us helping the kids
save for their cars, so thatsparked so many conversations.
I was like we should definitelytalk about this on the podcast.
We'll answer all the questionsI got and just explain what we
(03:19):
do.
Now our kids are still prettyyoung we have a nine, six and
five-year-old, so we still havea lot of time before they're
making this big purchase.
But our thought here is thatwe're teaching them to slowly
save up for something that theyreally want, so that instant
(03:40):
gratification that everyonelikes.
We are teaching them that if youhave a big financial expense,
you need to slowly plan and savefor it, not just make these
crazy decisions on a whim.
So for that reason, thisepisode is going to be all about
money management for kids andthe things that we're doing.
(04:02):
That, I feel like, helps teachthem about money management,
because it is so important and,unfortunately, is one of those
things that's just overlooked alot.
When you're parenting and I getthat there are so many things
to focus on, but, coming fromtwo different households that
just didn't really focus onmoney management and teaching us
(04:25):
we had a lot to learn when wegot married and we made a lot of
big mistakes.
So I think that is one of thereasons that we're so passionate
about teaching our kids aboutmoney and obviously we're in
finance, so that is veryimportant in our household.
But hopefully today we share afew things that you can
implement with your kids thatare relatively easy I know you
(04:47):
don't have a lot of time, butwill make a big impact also.
Speaker 1 (04:51):
Yes, we did make some mistakes, and you know.
I think that that just goes toshow that, even though I'm a CPA
and you know I should be anexpert on money, personal
finance is different.
Be an expert on money, personalfinance is different.
And Dave Ramsey likes to saythat personal finance is only
10% math and it's 90% emotional.
I guess, yeah, and it's true.
(05:12):
I mean, or it can be, it can be90% math as long as you force
yourself to make it be that.
But if you don't really focuson it, then you'll let your
emotions get control and tellyou what you think is a good
idea at the time and it mightnot be.
Speaker 2 (05:27):
Yeah, exactly, and I think that's happened to every
single person listening, and usincluded.
So we've really, since we gotmarried 11 years ago, we have
just turned things aroundcompletely.
We took our personal financesvery seriously and we did get
into Dave Ramsey and histeachings just to help us get in
that right frame of mind.
If you've listened to ourpersonal finance episodes,
you've definitely heard us talkabout Dave Ramsey and his
(05:48):
teachings just to like help usget in that right frame of mind.
If you've listened to ourpersonal finance episodes,
you've definitely heard us talkabout Dave Ramsey.
So another thing that he alsotalks about is kids' personal
finance.
So we have been talking aboutthis for years, like what we
want to do with the kids, whatare some things that we will
start including in just ourhabits so that we can teach them
(06:10):
all of these things.
And one of the things we'vebeen talking about doing for
years is setting them up a carfund for each of them, and we
finally did that last year, andso we're going to talk a little
bit about which account we setup, how we do it, how they put
money into that and all of thaton this episode.
So last year we set thataccount up for each kid through
(06:34):
Ally, and Ally is an onlinesavings account and there's a
lot of reasons that we pickedthis account.
So if you'll explain what thatis and how an online savings
account works, then you'll seewhy we chose this account works.
(06:55):
Then you'll see why we chosethis account.
Are you ready to feel confidentwith your personal finances?
Have you planned your retirementsavings or looked into life
insurance for you and yourfamily?
We meet with clients all thetime to talk about their
financial goals and theirpersonal finances, and we kept
getting the same questions overand over again.
For that reason, we compiledeverything that we want you to
know into a workbook.
(07:16):
In the personal financeworkbook, we help you focus on
your short and long-termfinancial goals and create a
plan to stick to them.
We walk you through the advicethat we give on budgeting paying
down debt, building up yoursavings for those unexpected
events, calculating what youshould be saving for monthly
retirement based on your goals,getting life insurance to
(07:39):
protect your family, and you getone month of email support from
us and monthly financialtemplates to help you use and
track your progress all yearlong.
This workbook is priced at $37,which is so much cheaper than
sitting down with your CPA, andit has everything we want you to
know in there.
If you're interested inchecking it out and ready to
(08:01):
meet your financial goals, checkthe show notes for the link to
purchase.
Speaker 1 (08:11):
So we had actually been meaning to set up an Ally
Savings Account for a while andwe had one at our normal bank
making 0.05% interest.
And while I don't think asavings account is your best
vehicle for all of yourinvesting because even at 4.5%,
which is what we're getting now,that's not going to get you
(08:31):
where you want to go forretirement you might as well be
making 4.5%, so you're at leastkeeping up with inflation
instead of basically losingmoney every year on your savings
account.
But it was kind of a hassle, orit seemed like it, so we didn't
do.
It Turns out wasn't really muchof a hassle at all, not at all
of a hassle at all, not at all.
But this car fund idea was whatpushed us over the edge.
(08:52):
Finally, because Ally has asavings account with multiple
buckets, which is just it'sstill one savings account, so
it's not as if each child has aseparate savings account from us
.
It's just our main savingsaccount at Ally, but there's
buckets within that that you canearmark for medical expenses,
(09:14):
for certain other types ofsavings that are important to
you, and we also made a bucketfor each of the kids car fund.
Speaker 2 (09:22):
And what's great about this is it only takes a
few minutes to set up.
Like you said, it's just oneaccount, so I don't know why we
put it off.
It was so quick to do this.
And then you have all of thesebuckets, which before we had our
emergency fund just in ourgeneral savings, which is just
like this one sum of money, andI had this like spreadsheet
(09:43):
basically saying oh well, thisis kind of like for medical and
this portion of it is for ourtaxes that we have to pay coming
up, that type of thing.
So with Ally we're able to moveall of our savings into that
one account and then create thebuckets.
What's cool about that for thekids is they can see, like it
specifically says, sailor's CarFund, slate's Car Fund, scotty's
(10:05):
Car Fund, and they love gettingon the app and looking at how
much money that they've put intoit.
Speaker 1 (10:11):
And it seems like so much money to them because
they've never actually had thatmuch money.
So yeah, and it is growing,it's becoming a nice little fund
for them, and it will continueto grow until they're 16.
So that'll be great.
Speaker 2 (10:23):
Yeah, I think right now our oldest has about 2000.
Is that right?
Speaker 1 (10:27):
Yes, right around there.
Speaker 2 (10:28):
Okay, so we've just got started, so that's actually
some really great progress forher, and it does seem like a lot
of money, but she definitelyhas time.
The next thing that came up wasthis question, over and over
again when I posted about this,was where are they getting the
money to put into their accountand do we pay them for like
chores, like so where's thismoney coming from?
Speaker 1 (10:50):
They just sell drugs a little bit on the side.
Nothing hardcore, you know,just a little here and there.
Speaker 2 (10:57):
Oh my gosh, the dad jokes never end, ever.
Okay, our kids don't sell drugs, but what happens is we kind of
thought about this for a littlebit as our kids were getting
older and we were making thempitch in more around the house,
so just putting their plates up,putting their laundry up, just
(11:20):
doing things as we ask.
As you know, kids and choressometimes are difficult, but we
made the decision that we didn'twant them being paid for daily
chores.
So, to answer that question, wedo not give them like an
allowance, so that's not wherethis money is coming from right
now.
We might do some sort ofallowance, something in the
(11:42):
future, as they're spendingmoney more, just so they can
budget, but right now they'renot getting paid for chores, so
they are doing everybody hasspecific chores that they do and
we're slowly building on thatbut we feel like in our family
we want everyone to pitch inwithout being paid for it.
Speaker 1 (12:04):
And that applies to just the daily everyday things
that people have to do whenyou're an adult.
We're trying to train childrento become adults one day,
responsible adults that pick uptheir house and know people
aren't going to pay me, as anadult, to clean my own room or
to do the dishes, and so ourattitude is kind of you eat here
(12:25):
and you ate the food that webought, actually, and so doing
dishes, no, we're not going topay you for that.
Most of the time we do thedishes, or we're not going to
pay you to wipe off the table orclean your own room or make
your own bed.
There are jobs that we do thatwe feel like you know maybe
they're not part of the normaleveryday thing.
Like we're going to clean outthe flower beds and you know
(12:46):
they could go play and that'sfine, they don't have to help us
.
But flower beds and you knowthey could go play and that's
fine, they don't have to help us.
But we're like, hey, if youhelp us pull weeds, then you
know we'll give you $10 orsomething.
There's times when we do stufflike that and in the future,
when they're big enough, youknow, we do hire someone to mow
the yard, and I would probablybe willing to pay them to do
that instead, if they want to dothat.
Speaker 2 (13:07):
Yes, this will change for us in the future.
We kind of have an idea ofcertain tasks that we'll ask
them like hey, if you want totake this over, then we will pay
you weekly or monthly whateverfor that.
But as of right now, we justdon't want to reward them for
doing things that they have todo.
Everybody has to do them,they're not fun.
But we just tell them, like wedon't get paid for chores, and
(13:29):
neither do you.
Obviously, that is just apersonal preference.
It's not like professionaladvice, that's just our
preference.
So that's how we're standingwith chores.
So where does this money comefrom?
The money that they're puttingin now is mainly from birthdays
or holidays, things like that.
So my kids have a lot ofgrandparents and great
(13:52):
grandparents.
So for their birthday, like, mydad gave our oldest a hundred
dollars and she could eitherspend that or choose to save it.
And now every single time we'reasking them hey, do you want to
put that in your car fund?
So that's where those arecoming from.
The big, bigger ones are justbirthdays and Christmases.
But I know like for Valentine'sDay they all got a $20 bill
(14:14):
from my grandma and we askedthem do you want to put it in
your fund or do you want tospend it?
So we're just kind of workingon the save and spend part of
that too and honestly, that parthas been going really well.
Speaker 1 (14:26):
Right.
If we felt like they were neverchoosing to save, we might step
in and even have to force theirhand a few times, but we
haven't had to do that.
Almost all of it they want.
You know the big amounts thatthey get.
They want to put it in therebecause here's part of the
reason we match it.
If they put it in their carfund now, it's there forever,
(14:47):
but we match it.
Speaker 2 (14:48):
Yes, that is.
The second step to all of thisis that we are matching anything
that they save, so that helpsin a lot of ways.
Obviously, if we wanted to makeit happen, we could purchase
cars for our children, but wewant to teach them about saving
for money and we want them tohave pride in this big purchase,
(15:12):
so we want them to have someskin in the game.
And I actually had a lot ofpeople message me saying that
their parents did this and thatthey really respected their car.
They felt like such, like somuch pride in that and they took
care of it, like all of thesethings that you just don't get
if someone just hands you oversomething.
(15:34):
So, yes, we could buy them thecar, but there's so many reasons
we're not.
So matching does a few thingsit helps them out, because we
all know how expensive cars areright now and just ridiculous
but also it helps us save forthe car as well.
So at first, when we werethinking about matching, I kind
of was like why are we matchingit now?
(15:55):
Why don't we just match itwhenever we go?
So if they have $10,000, youknow we'll give 10,000 whenever
we buy the car.
And Carson was like no, we needto start slowly saving too.
So this is just a way for us toslowly save for three cars that
we'll be buying in just fourshort years.
Speaker 1 (16:16):
Yeah, and you can look at old companies for an
example of why it's better to doit this way.
Because you know they used tohave pensions or what they
called deferred compensationplans, and it's just something
that they don't put any money in.
But when you retire, thecompany has to pay you out for
the rest of your life as part ofyour retirement, but nobody
(16:38):
ever saved any money for it, andit's unbelievable how many of
the times these companies wentbankrupt because of this and all
the people that were retiredwere screwed over.
Anyway, it's just a lesson thatif major corporations can't do
it, you probably can't either.
But what does work is a 401kplan which is what they all do
now where the employeecontributes some and then the
(16:58):
company matches it right then.
So the money's already there.
They don't have to come up withit later.
That's what you should do aswell Go ahead and put it in
there, and even if you knowyou'll have the money down the
road, imagine how much less itwill sting to put in $100 today,
maybe $100 on Christmas,instead of trying to let them
save up $15,000, and then youhave to come up with another
(17:20):
$15,000 to match it when they're$16,000,.
That's going to sting a littlebit.
Speaker 2 (17:24):
For sure.
I think you're completely right, because we've already put in
$1,000 to her car fund and Ihaven't really thought that much
about it.
It does kind of suck.
She got $300 and we have toturn around and spend $300 again
whenever it's like, oh, we'vealready spent money for
Christmas or her birthday orwhatever.
But slowly doing that is such ablessing for not just the kid
(17:48):
to learn all of these greatthings, but also for you.
So we highly recommend doingthis.
It is super easy to set up andthe kids have been doing so well
with it.
Speaker 1 (18:00):
So, and just in case anyone's like, this sounds
really sad because we're likestealing all their birthday
money or their Christmas money.
You know they first we buy themeverything they need, not even
for their birthday or Christmas,and then we buy them everything
they want pretty much or theirgrandparents and parents do, um,
and great grandparents for theypretty much, or their
grandparents and parents do, andgreat grandparents they pretty
much get everything they want aspresents and so there's not
(18:22):
really a whole lot more thatthey even want by the time they
get the money.
And so it kind of makes sensefor them to say, no, I'll take
double the money and put ittowards my car down the road,
but we do still have them.
If they get $100 in cash, wemight, might have them out of
all the different money they getfrom parents and grandparents.
Hold back that so that theycould go shopping for their
(18:42):
birthday and anything theydidn't get for their birthday
they can pick up at that time.
Speaker 2 (18:47):
Yeah, absolutely, and that's another thing that I've
been sharing.
That we've been doing on myInstagram is that we have been
making them pay for certainthings and, yeah, some people
may comment saying that it's sad, but the vast majority of
people think that that helps somuch, like we do.
So.
For example, sailor had acouple hundred dollars like in
(19:09):
her piggy bank and she waswanting to do all of these
things.
But all summer we've traveled,we've done all of these
experiences, we've taken them tothe water park, we've spent a
lot of money and I just told herhey, if you want to do that,
this costs $50.
Well, of course, to a kid, $50is a lot of money.
(19:29):
So a couple of times she saidyes, and then she feels really
bad about spending that.
Not that she feels guilty forspending, but it didn't feel
like it was worth the $50 to herin the end.
Speaker 1 (19:43):
Which, as a parent, makes you go.
Oh so you're happy to spend mymoney on this, but you don't
want to spend your own money, soyou didn't really want to do it
that badly.
Speaker 2 (19:52):
Exactly so.
I think that they've learned somany good lessons.
We've just started that in thelast year or two and our oldest
we've had those conversationsnow a few times.
So one time it was to go to acarnival and I was like we're
not going to do that.
We've been doing all of thesethings.
That's just not in the budgetfor this week, and so she ended
(20:13):
up paying for it, and then shewas sad afterwards that she
didn't have the money and I'mlike that's such a good thing to
talk about right now.
And then there's been a coupleinstances where she chose not to
use her money, and one of thoseis like getting your nails done
Our youngest.
I told her how much it costsand I said you can join me and
pay for your own nails, or youcan just paint your nails at
(20:37):
home for free, but if you wantto get your nails done with me,
you do need to bring your ownmoney.
And one of them chose to payfor it and one of them chose to
stay home.
So I think these little builtin lessons have been really
helpful, as they're starting tounderstand the concept of money.
I agree to understand theconcept of money, I agree.
(20:59):
The last thing I did want totouch on because this came up a
lot was that as they get olderand we're getting closer to that
deadline of purchasing the carthere definitely is going to be
some more money that needs to beearned.
And what are we going to do asthey get older if we're not
going to give them, like anallowance or anything for chores
, and I think we're just goingto encourage our kids to get
(21:20):
creative with ways to make money?
So either, like Carson hadmentioned, mowing lawns or
babysitting?
My daughter has a gymnasticinstructor who is going to be a
senior this year, I believe, andshe gives private lessons to
the little girls in her classand she makes extra money.
Speaker 1 (21:39):
Has been for like two years, right?
Oh yeah, she's been doing itfor years.
Speaker 2 (21:44):
And it's a really great way for her to make extra
money and it works around herschedule.
So I think that that's anotherlesson that they'll be having in
the future that they need tocome up with some ways to make
money.
Not necessarily go get a job at, like, the mall or something,
because that won't make themmuch money yes, but also because
they are so busy with sportsand stuff they are going to get
(22:05):
have to get creative on waysthey can make money between
their schedule.
So babysitting, mowing lawns,giving lessons, that type of
thing.
Speaker 1 (22:13):
So and we think they'll be able to make more
money even than most teenagersdo at these things, because
we're going to help them set.
Y'all know we love business.
We're going to help them set uptheir businesses the right way.
I mean, um, we have so many,just babysitters, for example.
We gave that as an example andthey are awesome babysitters.
Kids love them and I think theycould make more money because
(22:35):
they don't ever know it's likehow much do you charge?
They don't know.
They want us to make it up.
And I was like pay me whateveryou want and I'm like well,
maybe that actually is a goodstrategy, because we probably
end up paying them more thanthey would ask for, because I
feel like guilty about it, butwe're going to help them come up
with a book of.
You know, these are the timesI'm available during this fall
(22:56):
semester.
Um, this is what I do.
Here's my CPR certification.
This is what I charge hourly.
If there's multiple kids, it'sa different rate, all of these
things.
Um, if you get back later thanyou told me, I'm going to charge
you a penalty, just likedaycares do, because we might
not call it a penalty, but youknow'm saying and same thing for
mowing yards.
(23:16):
Um, you know, if, if any ofthem want to do that, you know,
I'll even buy the mower so theycan go do it and we'll have to
pay back slowly oh yeah, yeah,if it's my mower, you know, then
hey, they have to learn so theycould buy their own mower and
it's gonna, uh, they'll get moremoney that way.
Speaker 2 (23:31):
So yeah, that's what we plan to do for the future.
I think that having somelessons with running a business
helps in so many things.
Running finances, even if it'sjust a simple babysitter's club,
we've talked with the kidsabout this a lot and given them
hey, you could do this.
Or if we see a client's doingreally well with something,
(23:52):
we're like, hey, what about this?
When you get a little bit older, you could do this.
So we've had a lot ofconversations about the future
and ways that they can make moremoney to put in this car fund
as we approach that time.
So that's just a little bit ofthe things that we're doing with
our kids and finances.
And this was such an interestingconversation in my DMs on
(24:15):
Instagram so I thought thiswould also be a really great
podcast episode.
So if you agree and you lovethis episode, or you listen to
our podcast and have not yetdone a review for our podcast it
only takes like 60 seconds Ifyou would please do that today,
we would so appreciate it.
That is what keeps our podcastgoing.
(24:36):
Do that today, we would soappreciate it.
That is what keeps our podcastgoing and we love to read those
reviews.
Speaker 1 (24:40):
Yes, but please do five stars only.
If you didn't like us, then youknow, just keep it to yourself,
just like your mom told you.
Speaker 2 (24:48):
if you don't have anything nice to say, don't say
anything at all Until next time.
Thank you so much for listeningto.
Speaker 1 (24:52):
What your CPA Wants you To.
Speaker 2 (24:54):
Know Podcast what your CPA Wants.
Speaker 1 (24:58):
You To Know Podcast.
This podcast is intended toprovide accounting and tax
information for educationalpurposes only.
All tax situations are uniqueand should be handled with the
assistance of a tax professional.
And in the future, when they're big enough, we do
hire someone to mow the yard,and I would probably be willing
to pay them to do that instead.
If they want to do that,welcome to what your CPA Wants
you To Know.
Speaker 2 (00:19):
Tax and accounting help can be expensive, so we've
created this podcast to helpguide you through it all and
make you feel like you have aCPA in your back pocket.
Speaker 1 (00:29):
I'm Carson Sands.
Speaker 2 (00:30):
And I'm Taryn Sands.
Speaker 1 (00:32):
I'm a CPA with over 10 years of experience helping
people start and grow theirbusinesses.
Speaker 2 (00:38):
And I'm an MBA with a specialization in marketing and
entrepreneurship.
Taxes suck and we want to makesure you don't pay more than
your fair share.
Speaker 1 (00:48):
We're here to share everything your CPA wants you to
know in a fun and easy tounderstand way.
Let's get started.
Speaker 2 (00:56):
Let's do it Today.
We have a little bit of adifferent episode for you we are
going to be talking about Today.
We have a little bit of adifferent episode for you.
We are going to be talkingabout finances with your kids.
So I guess this is a little bitof a parenting episode plus
finances.
So a little bit different.
Speaker 1 (01:14):
Yes, we are parenting experts.
We have three children and allthree are still alive.
Speaker 2 (01:20):
We do keep our kids alive together, among the other
things like running thisbusiness and this podcast, which
it's been a crazy summer.
So this is the first time we'vesat down in a while to podcast
and I actually was messing upall of the technology.
So we are back at it and thekids start school very soon, so
we're excited to get the ballrolling again and feel like we
(01:42):
have some sort of schedule theball rolling again and feel like
we have some sort of schedule.
Speaker 1 (01:47):
If you are missing us every other week because we're
only posting every other weekepisodes now, then you know
we're sorry for that.
We know that most people arelike I need accounting at least
once a week.
Speaker 2 (01:56):
Definitely.
Speaker 1 (01:56):
But I'm sorry to hear , and some people might say that
it's still two episodes toomany per month.
So I guess you know it dependson who you are.
Speaker 2 (02:06):
Such an exciting topic, I know, but it has been
really nice for us to take alittle bit of a break and go
down to two episodes.
So, if you didn't notice yet,we are just doing a bi-weekly
episode now and I don't knowthat we will go back to weekly,
but if we do, it'll definitelyprobably be during tax season,
whenever people actually want tolisten to tax and accounting
(02:28):
advice.
Speaker 1 (02:29):
Well, and most of the episodes we have are still
applicable.
Tax laws do change, but a lotof them are general information,
and so we had so many things.
We wanted to get out there asquickly as possible to help as
many people as possible,especially once we stopped
taking new clients.
And then now we feel likethere's a great deal of
(02:50):
information out there.
The biggest things we wanted tocover we've covered, but
there's still a lot of otherinteresting things and helpful
things that we can talk about,so we'll still be coming at you
every other week.
Speaker 2 (02:58):
Absolutely so.
Today's podcast episode theidea came from something I
shared on my personal Instagrampage about us helping the kids
save for their cars, so thatsparked so many conversations.
I was like we should definitelytalk about this on the podcast.
We'll answer all the questionsI got and just explain what we
(03:19):
do.
Now our kids are still prettyyoung we have a nine, six and
five-year-old, so we still havea lot of time before they're
making this big purchase.
But our thought here is thatwe're teaching them to slowly
save up for something that theyreally want, so that instant
(03:40):
gratification that everyonelikes.
We are teaching them that if youhave a big financial expense,
you need to slowly plan and savefor it, not just make these
crazy decisions on a whim.
So for that reason, thisepisode is going to be all about
money management for kids andthe things that we're doing.
(04:02):
That, I feel like, helps teachthem about money management,
because it is so important and,unfortunately, is one of those
things that's just overlooked alot.
When you're parenting and I getthat there are so many things
to focus on, but, coming fromtwo different households that
just didn't really focus onmoney management and teaching us
(04:25):
we had a lot to learn when wegot married and we made a lot of
big mistakes.
So I think that is one of thereasons that we're so passionate
about teaching our kids aboutmoney and obviously we're in
finance, so that is veryimportant in our household.
But hopefully today we share afew things that you can
implement with your kids thatare relatively easy I know you
(04:47):
don't have a lot of time, butwill make a big impact also.
Speaker 1 (04:51):
Yes, we did make some mistakes, and you know.
I think that that just goes toshow that, even though I'm a CPA
and you know I should be anexpert on money, personal
finance is different.
Be an expert on money, personalfinance is different.
And Dave Ramsey likes to saythat personal finance is only
10% math and it's 90% emotional.
I guess, yeah, and it's true.
(05:12):
I mean, or it can be, it can be90% math as long as you force
yourself to make it be that.
But if you don't really focuson it, then you'll let your
emotions get control and tellyou what you think is a good
idea at the time and it mightnot be.
Speaker 2 (05:27):
Yeah, exactly, and I think that's happened to every
single person listening, and usincluded.
So we've really, since we gotmarried 11 years ago, we have
just turned things aroundcompletely.
We took our personal financesvery seriously and we did get
into Dave Ramsey and histeachings just to help us get in
that right frame of mind.
If you've listened to ourpersonal finance episodes,
you've definitely heard us talkabout Dave Ramsey and his
(05:48):
teachings just to like help usget in that right frame of mind.
If you've listened to ourpersonal finance episodes,
you've definitely heard us talkabout Dave Ramsey.
So another thing that he alsotalks about is kids' personal
finance.
So we have been talking aboutthis for years, like what we
want to do with the kids, whatare some things that we will
start including in just ourhabits so that we can teach them
(06:10):
all of these things.
And one of the things we'vebeen talking about doing for
years is setting them up a carfund for each of them, and we
finally did that last year, andso we're going to talk a little
bit about which account we setup, how we do it, how they put
money into that and all of thaton this episode.
So last year we set thataccount up for each kid through
(06:34):
Ally, and Ally is an onlinesavings account and there's a
lot of reasons that we pickedthis account.
So if you'll explain what thatis and how an online savings
account works, then you'll seewhy we chose this account works.
(06:55):
Then you'll see why we chosethis account.
Are you ready to feel confidentwith your personal finances?
Have you planned your retirementsavings or looked into life
insurance for you and yourfamily?
We meet with clients all thetime to talk about their
financial goals and theirpersonal finances, and we kept
getting the same questions overand over again.
For that reason, we compiledeverything that we want you to
know into a workbook.
(07:16):
In the personal financeworkbook, we help you focus on
your short and long-termfinancial goals and create a
plan to stick to them.
We walk you through the advicethat we give on budgeting paying
down debt, building up yoursavings for those unexpected
events, calculating what youshould be saving for monthly
retirement based on your goals,getting life insurance to
(07:39):
protect your family, and you getone month of email support from
us and monthly financialtemplates to help you use and
track your progress all yearlong.
This workbook is priced at $37,which is so much cheaper than
sitting down with your CPA, andit has everything we want you to
know in there.
If you're interested inchecking it out and ready to
(08:01):
meet your financial goals, checkthe show notes for the link to
purchase.
Speaker 1 (08:11):
So we had actually been meaning to set up an Ally
Savings Account for a while andwe had one at our normal bank
making 0.05% interest.
And while I don't think asavings account is your best
vehicle for all of yourinvesting because even at 4.5%,
which is what we're getting now,that's not going to get you
(08:31):
where you want to go forretirement you might as well be
making 4.5%, so you're at leastkeeping up with inflation
instead of basically losingmoney every year on your savings
account.
But it was kind of a hassle, orit seemed like it, so we didn't
do.
It Turns out wasn't really muchof a hassle at all, not at all
of a hassle at all, not at all.
But this car fund idea was whatpushed us over the edge.
(08:52):
Finally, because Ally has asavings account with multiple
buckets, which is just it'sstill one savings account, so
it's not as if each child has aseparate savings account from us
.
It's just our main savingsaccount at Ally, but there's
buckets within that that you canearmark for medical expenses,
(09:14):
for certain other types ofsavings that are important to
you, and we also made a bucketfor each of the kids car fund.
Speaker 2 (09:22):
And what's great about this is it only takes a
few minutes to set up.
Like you said, it's just oneaccount, so I don't know why we
put it off.
It was so quick to do this.
And then you have all of thesebuckets, which before we had our
emergency fund just in ourgeneral savings, which is just
like this one sum of money, andI had this like spreadsheet
(09:43):
basically saying oh well, thisis kind of like for medical and
this portion of it is for ourtaxes that we have to pay coming
up, that type of thing.
So with Ally we're able to moveall of our savings into that
one account and then create thebuckets.
What's cool about that for thekids is they can see, like it
specifically says, sailor's CarFund, slate's Car Fund, scotty's
(10:05):
Car Fund, and they love gettingon the app and looking at how
much money that they've put intoit.
Speaker 1 (10:11):
And it seems like so much money to them because
they've never actually had thatmuch money.
So yeah, and it is growing,it's becoming a nice little fund
for them, and it will continueto grow until they're 16.
So that'll be great.
Speaker 2 (10:23):
Yeah, I think right now our oldest has about 2000.
Is that right?
Speaker 1 (10:27):
Yes, right around there.
Speaker 2 (10:28):
Okay, so we've just got started, so that's actually
some really great progress forher, and it does seem like a lot
of money, but she definitelyhas time.
The next thing that came up wasthis question, over and over
again when I posted about this,was where are they getting the
money to put into their accountand do we pay them for like
chores, like so where's thismoney coming from?
Speaker 1 (10:50):
They just sell drugs a little bit on the side.
Nothing hardcore, you know,just a little here and there.
Speaker 2 (10:57):
Oh my gosh, the dad jokes never end, ever.
Okay, our kids don't sell drugs, but what happens is we kind of
thought about this for a littlebit as our kids were getting
older and we were making thempitch in more around the house,
so just putting their plates up,putting their laundry up, just
(11:20):
doing things as we ask.
As you know, kids and choressometimes are difficult, but we
made the decision that we didn'twant them being paid for daily
chores.
So, to answer that question, wedo not give them like an
allowance, so that's not wherethis money is coming from right
now.
We might do some sort ofallowance, something in the
(11:42):
future, as they're spendingmoney more, just so they can
budget, but right now they'renot getting paid for chores, so
they are doing everybody hasspecific chores that they do and
we're slowly building on thatbut we feel like in our family
we want everyone to pitch inwithout being paid for it.
Speaker 1 (12:04):
And that applies to just the daily everyday things
that people have to do whenyou're an adult.
We're trying to train childrento become adults one day,
responsible adults that pick uptheir house and know people
aren't going to pay me, as anadult, to clean my own room or
to do the dishes, and so ourattitude is kind of you eat here
(12:25):
and you ate the food that webought, actually, and so doing
dishes, no, we're not going topay you for that.
Most of the time we do thedishes, or we're not going to
pay you to wipe off the table orclean your own room or make
your own bed.
There are jobs that we do thatwe feel like you know maybe
they're not part of the normaleveryday thing.
Like we're going to clean outthe flower beds and you know
(12:46):
they could go play and that'sfine, they don't have to help us
.
But flower beds and you knowthey could go play and that's
fine, they don't have to help us.
But we're like, hey, if youhelp us pull weeds, then you
know we'll give you $10 orsomething.
There's times when we do stufflike that and in the future,
when they're big enough, youknow, we do hire someone to mow
the yard, and I would probablybe willing to pay them to do
that instead, if they want to dothat.
Speaker 2 (13:07):
Yes, this will change for us in the future.
We kind of have an idea ofcertain tasks that we'll ask
them like hey, if you want totake this over, then we will pay
you weekly or monthly whateverfor that.
But as of right now, we justdon't want to reward them for
doing things that they have todo.
Everybody has to do them,they're not fun.
But we just tell them, like wedon't get paid for chores, and
(13:29):
neither do you.
Obviously, that is just apersonal preference.
It's not like professionaladvice, that's just our
preference.
So that's how we're standingwith chores.
So where does this money comefrom?
The money that they're puttingin now is mainly from birthdays
or holidays, things like that.
So my kids have a lot ofgrandparents and great
(13:52):
grandparents.
So for their birthday, like, mydad gave our oldest a hundred
dollars and she could eitherspend that or choose to save it.
And now every single time we'reasking them hey, do you want to
put that in your car fund?
So that's where those arecoming from.
The big, bigger ones are justbirthdays and Christmases.
But I know like for Valentine'sDay they all got a $20 bill
(14:14):
from my grandma and we askedthem do you want to put it in
your fund or do you want tospend it?
So we're just kind of workingon the save and spend part of
that too and honestly, that parthas been going really well.
Speaker 1 (14:26):
Right.
If we felt like they were neverchoosing to save, we might step
in and even have to force theirhand a few times, but we
haven't had to do that.
Almost all of it they want.
You know the big amounts thatthey get.
They want to put it in therebecause here's part of the
reason we match it.
If they put it in their carfund now, it's there forever,
(14:47):
but we match it.
Speaker 2 (14:48):
Yes, that is.
The second step to all of thisis that we are matching anything
that they save, so that helpsin a lot of ways.
Obviously, if we wanted to makeit happen, we could purchase
cars for our children, but wewant to teach them about saving
for money and we want them tohave pride in this big purchase,
(15:12):
so we want them to have someskin in the game.
And I actually had a lot ofpeople message me saying that
their parents did this and thatthey really respected their car.
They felt like such, like somuch pride in that and they took
care of it, like all of thesethings that you just don't get
if someone just hands you oversomething.
(15:34):
So, yes, we could buy them thecar, but there's so many reasons
we're not.
So matching does a few thingsit helps them out, because we
all know how expensive cars areright now and just ridiculous
but also it helps us save forthe car as well.
So at first, when we werethinking about matching, I kind
of was like why are we matchingit now?
(15:55):
Why don't we just match itwhenever we go?
So if they have $10,000, youknow we'll give 10,000 whenever
we buy the car.
And Carson was like no, we needto start slowly saving too.
So this is just a way for us toslowly save for three cars that
we'll be buying in just fourshort years.
Speaker 1 (16:16):
Yeah, and you can look at old companies for an
example of why it's better to doit this way.
Because you know they used tohave pensions or what they
called deferred compensationplans, and it's just something
that they don't put any money in.
But when you retire, thecompany has to pay you out for
the rest of your life as part ofyour retirement, but nobody
(16:38):
ever saved any money for it, andit's unbelievable how many of
the times these companies wentbankrupt because of this and all
the people that were retiredwere screwed over.
Anyway, it's just a lesson thatif major corporations can't do
it, you probably can't either.
But what does work is a 401kplan which is what they all do
now where the employeecontributes some and then the
(16:58):
company matches it right then.
So the money's already there.
They don't have to come up withit later.
That's what you should do aswell Go ahead and put it in
there, and even if you knowyou'll have the money down the
road, imagine how much less itwill sting to put in $100 today,
maybe $100 on Christmas,instead of trying to let them
save up $15,000, and then youhave to come up with another
(17:20):
$15,000 to match it when they're$16,000,.
That's going to sting a littlebit.
Speaker 2 (17:24):
For sure.
I think you're completely right, because we've already put in
$1,000 to her car fund and Ihaven't really thought that much
about it.
It does kind of suck.
She got $300 and we have toturn around and spend $300 again
whenever it's like, oh, we'vealready spent money for
Christmas or her birthday orwhatever.
But slowly doing that is such ablessing for not just the kid
(17:48):
to learn all of these greatthings, but also for you.
So we highly recommend doingthis.
It is super easy to set up andthe kids have been doing so well
with it.
Speaker 1 (18:00):
So, and just in case anyone's like, this sounds
really sad because we're likestealing all their birthday
money or their Christmas money.
You know they first we buy themeverything they need, not even
for their birthday or Christmas,and then we buy them everything
they want pretty much or theirgrandparents and parents do, um,
and great grandparents for theypretty much, or their
grandparents and parents do, andgreat grandparents they pretty
much get everything they want aspresents and so there's not
(18:22):
really a whole lot more thatthey even want by the time they
get the money.
And so it kind of makes sensefor them to say, no, I'll take
double the money and put ittowards my car down the road,
but we do still have them.
If they get $100 in cash, wemight, might have them out of
all the different money they getfrom parents and grandparents.
Hold back that so that theycould go shopping for their
(18:42):
birthday and anything theydidn't get for their birthday
they can pick up at that time.
Speaker 2 (18:47):
Yeah, absolutely, and that's another thing that I've
been sharing.
That we've been doing on myInstagram is that we have been
making them pay for certainthings and, yeah, some people
may comment saying that it's sad, but the vast majority of
people think that that helps somuch, like we do.
So.
For example, sailor had acouple hundred dollars like in
(19:09):
her piggy bank and she waswanting to do all of these
things.
But all summer we've traveled,we've done all of these
experiences, we've taken them tothe water park, we've spent a
lot of money and I just told herhey, if you want to do that,
this costs $50.
Well, of course, to a kid, $50is a lot of money.
(19:29):
So a couple of times she saidyes, and then she feels really
bad about spending that.
Not that she feels guilty forspending, but it didn't feel
like it was worth the $50 to herin the end.
Speaker 1 (19:43):
Which, as a parent, makes you go.
Oh so you're happy to spend mymoney on this, but you don't
want to spend your own money, soyou didn't really want to do it
that badly.
Speaker 2 (19:52):
Exactly so.
I think that they've learned somany good lessons.
We've just started that in thelast year or two and our oldest
we've had those conversationsnow a few times.
So one time it was to go to acarnival and I was like we're
not going to do that.
We've been doing all of thesethings.
That's just not in the budgetfor this week, and so she ended
(20:13):
up paying for it, and then shewas sad afterwards that she
didn't have the money and I'mlike that's such a good thing to
talk about right now.
And then there's been a coupleinstances where she chose not to
use her money, and one of thoseis like getting your nails done
Our youngest.
I told her how much it costsand I said you can join me and
pay for your own nails, or youcan just paint your nails at
(20:37):
home for free, but if you wantto get your nails done with me,
you do need to bring your ownmoney.
And one of them chose to payfor it and one of them chose to
stay home.
So I think these little builtin lessons have been really
helpful, as they're starting tounderstand the concept of money.
I agree to understand theconcept of money, I agree.
(20:59):
The last thing I did want totouch on because this came up a
lot was that as they get olderand we're getting closer to that
deadline of purchasing the carthere definitely is going to be
some more money that needs to beearned.
And what are we going to do asthey get older if we're not
going to give them, like anallowance or anything for chores
, and I think we're just goingto encourage our kids to get
(21:20):
creative with ways to make money?
So either, like Carson hadmentioned, mowing lawns or
babysitting?
My daughter has a gymnasticinstructor who is going to be a
senior this year, I believe, andshe gives private lessons to
the little girls in her classand she makes extra money.
Speaker 1 (21:39):
Has been for like two years, right?
Oh yeah, she's been doing itfor years.
Speaker 2 (21:44):
And it's a really great way for her to make extra
money and it works around herschedule.
So I think that that's anotherlesson that they'll be having in
the future that they need tocome up with some ways to make
money.
Not necessarily go get a job at, like, the mall or something,
because that won't make themmuch money yes, but also because
they are so busy with sportsand stuff they are going to get
(22:05):
have to get creative on waysthey can make money between
their schedule.
So babysitting, mowing lawns,giving lessons, that type of
thing.
Speaker 1 (22:13):
So and we think they'll be able to make more
money even than most teenagersdo at these things, because
we're going to help them set.
Y'all know we love business.
We're going to help them set uptheir businesses the right way.
I mean, um, we have so many,just babysitters, for example.
We gave that as an example andthey are awesome babysitters.
Kids love them and I think theycould make more money because
(22:35):
they don't ever know it's likehow much do you charge?
They don't know.
They want us to make it up.
And I was like pay me whateveryou want and I'm like well,
maybe that actually is a goodstrategy, because we probably
end up paying them more thanthey would ask for, because I
feel like guilty about it, butwe're going to help them come up
with a book of.
You know, these are the timesI'm available during this fall
(22:56):
semester.
Um, this is what I do.
Here's my CPR certification.
This is what I charge hourly.
If there's multiple kids, it'sa different rate, all of these
things.
Um, if you get back later thanyou told me, I'm going to charge
you a penalty, just likedaycares do, because we might
not call it a penalty, but youknow'm saying and same thing for
mowing yards.
(23:16):
Um, you know, if, if any ofthem want to do that, you know,
I'll even buy the mower so theycan go do it and we'll have to
pay back slowly oh yeah, yeah,if it's my mower, you know, then
hey, they have to learn so theycould buy their own mower and
it's gonna, uh, they'll get moremoney that way.
Speaker 2 (23:31):
So yeah, that's what we plan to do for the future.
I think that having somelessons with running a business
helps in so many things.
Running finances, even if it'sjust a simple babysitter's club,
we've talked with the kidsabout this a lot and given them
hey, you could do this.
Or if we see a client's doingreally well with something,
(23:52):
we're like, hey, what about this?
When you get a little bit older, you could do this.
So we've had a lot ofconversations about the future
and ways that they can make moremoney to put in this car fund
as we approach that time.
So that's just a little bit ofthe things that we're doing with
our kids and finances.
And this was such an interestingconversation in my DMs on
(24:15):
Instagram so I thought thiswould also be a really great
podcast episode.
So if you agree and you lovethis episode, or you listen to
our podcast and have not yetdone a review for our podcast it
only takes like 60 seconds Ifyou would please do that today,
we would so appreciate it.
That is what keeps our podcastgoing.
(24:36):
Do that today, we would soappreciate it.
That is what keeps our podcastgoing and we love to read those
reviews.
Speaker 1 (24:40):
Yes, but please do five stars only.
If you didn't like us, then youknow, just keep it to yourself,
just like your mom told you.
Speaker 2 (24:48):
if you don't have anything nice to say, don't say
anything at all Until next time.
Thank you so much for listeningto.
Speaker 1 (24:52):
What your CPA Wants you To.
Speaker 2 (24:54):
Know Podcast what your CPA Wants.
Speaker 1 (24:58):
You To Know Podcast.
This podcast is intended toprovide accounting and tax
information for educationalpurposes only.
All tax situations are uniqueand should be handled with the
assistance of a tax professional.
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