Neale Godfrey: The Magic of Teaching the Value of Money

New York Times #1 Bestselling Author, Neale Godfrey, Explains the Magic behind Teaching Young Children the Value of Money.

Episode Transcript

(00:05):
Hi, I'm Barrie Farber, andthis is in search of the magic tree.
What magic are we looking for?Well, if you think about a
tree, several things come to mind. One the roots, the foundation for

(00:26):
something great. Two the branches representingthe connection and continuation of our legacy as
we pass down the values and beliefsto the next generation. And three potential,
something that starts as small as anacorn and becomes a giant oak.
We're going to explore how we canbuild the mind, body, and spirits

(00:49):
of our children. How to raiseour kids with key traits like patients,
positive attitudes, courage, empathy,determination, and more. Join me on
this adventure as we talk to celebrities, athletes, entertainers, business leaders,
educators, brain surgeons, and moreabout the magic to building success at an

(01:11):
early age. We have a veryspecial guest today, Neil Godfrey joins me
and she is not only a NewYork Times number one best selling author,
but she's the author of twenty eightbooks on how to empower kids and parents

(01:32):
to have a healthy relationship with money. Besides being a New York Times number
one best selling author, she's hadthirteen appearances on the Oprah Wimprey Show,
Good Morning America, The Today Show, CNBC and more. And the accomplishments
she has are tremendous, which I'llget into, but I wanted to welcome
her. Neil Godfrey, thank youfor coming on the program. Thank you,

(01:55):
it is so great to be withyou. What age do you start
teaching children to value the use ofmoney, Like, when does that start?
Well, I think it's a greatquestion because we teach kids the most
complicated thing that they'll ever learn intheir life, which is language, and

(02:15):
we start when they're tiny. Westart really age three. I mean,
the truth is we treat them atbirth, but by age three, they
start connecting the abstract concept of asound to an object, to your face,
to you. And that's when Ialso start teaching them other values and

(02:39):
life skills the same way that youdo. You teach these kids to start
connecting to their world. And so, you know, one of the big
things is the natural consequences of moneyis the only way you get money is
to earn it. There's no entitlementprogram out there. It's not that I
whine and I can vetch and Iget something. You have to earn that

(03:02):
money. That's what happens. Sothat's when I start connecting it. If
you want something, then let's dosome chores to start doing that. And
you know they're ready when you askthem what mommy and daddy do with money
in the store. If they say, buy things, then they understand the

(03:22):
concept of medium of exchange, whichis very sophisticated. By the way.
It's not just that you walk intothe store and you take what you want.
You use money, and the kidsget that. Well, let's talk
about that. Because you talk aboutwork ethic and chores. What could you
share with the parents, grandparents,whoever are the people that are raising kids

(03:45):
today when it's an early stage.Well, how do you introduce that?
What are some practical ways that you'vetold people over the years and answered a
lot of questions about how to getthat started with the relationship between chores and
getting a ford and the value relationship. Well, the wonderful thing is that
you get to incubate them right therein your own home and they see this

(04:09):
house, but they don't understand howmagically the clothes get washed and the food
gets cooked and the garbage goes out. They just sort of exist there and
stuff happens so get them involved.And what's wonderful is the little ones want
to help. They want to helpmom and dad. They want to be

(04:29):
part of the household and fields grownup. So what you do is you
start them doing little tiny chores.And obviously you're doing the chores with them,
so they're helping you to set thetable, you know, without the
knobs, and to put you know, maybe the little ones can put the
napkins out there, and then theycan be in charge of taking the napkins
and putting them into recycling. Youknow, that's a really big deal.

(04:53):
So you pick little tiny chores.They can dust, they can do again,
little chores, and then what youdo is you write a chore chart.
They can't read, but they know, trust me, they will point
out what they have done. Theyno dust, they know, they'll know.
They'll know. And so what youdo is you put you know,

(05:14):
little check mark by what the choreis that they've done. And at the
end of the week they get alittle money. And what I do is
I pay the kids their age perweek. And you know, so a
three year old, a five yearold gets five dollars a week. But
that's only part of it. Theother half is the budget part. And

(05:35):
a budget, as you know,is a habit, and it's a habit
that everyone struggles with. So whatI do is I make it very visual
and by the way, I wantus all to be very tactical. I
want them to see real money.Don't start in the digital world, because
if you start in the digital world, they just think it's another video game.

(05:57):
It's not real. So what youhave to do start with real money.
And so you get four clear plasticjars or envelopes and label them.
So the first jar is quick iswell, actually first jars charity. I
want ten percent to come off thetop to go into the charity jar.

(06:20):
They're not going to understand right awaywhat charity where Seduka is. They're not
going to get it right away,but they will as they start to grow
up. And you need to instillthe value that you're always going to have
to give to other people because lookhow lucky you are, and we share
a value of value. You teachin terms of generosity and being connected to

(06:45):
the community. So ten percent comesoff the top, then you divide the
rest of the third. Next thirdis quick cash, instant gratification. They
work hard, they get to maketheir own decisions. It's a little bit
of money, it's not a lot. So you take them into a store,
a real store, and they canpick out you know, they want
stickers, they want something, theycan buy it, but you have to

(07:05):
tell them if you buy that,that's it for the week. And that's
a really huge lesson. If youwant back in any bar, which I
will permit you to do as aspecial treat, that's it. Then,
So we as adults have a toughtime on incident gratification. I love that.

(07:27):
That's some real practical tips. Iwas. You know, your latest
best selling book is Be Money Smartand Tough Times for Parents and Grandparents.
What are some tips there? Andobviously we're talking right now about three year
olds, five year olds at anearly stage, but obviously you're you're talking
about kids who are in their twenties, you know, and living at home

(07:48):
or starting to work and getting theirjobs. But what are some key practical
things that you can share with parentsand grandparents at that stage From that from
Be Money Smart art in Tough Times, your latest book, Well, actually
the lessons are exactly the same,they're just more sophisticated instead of little jars.
You know, you're into the digitalworld. The kids have to learn

(08:11):
the different difference between a debit cardand a credit card. We are giving
them real financial tools to begin with. But just like you wouldn't hand the
keys to a car to a kidand say go figure it out as you're
driving, you're not going to handthem a financial tool either. That financial
vehicle needs instructions. So you teachthem here's a budget. Part of it

(08:33):
is instant gratification, part of itis you push it off. Part of
it goes into savings, part ofit goes to taxes. This is the
way the world works. It's ahabit that you're still teaching them. And
by the way, you're still givingto charity. Same thing. You know,
when I remember shoveling snow or mowinglawns or doing these odd end jobs

(08:58):
and getting paid for it, andit was such an exciting time. You
know, I don't think I had, obviously the discipline that you sound like
you can have with your children andwhat you've gone through in the history that
you've had. But is there anythingthat what are some of the biggest mistakes
that parents make in this area?I you know, I love that question,

(09:20):
because the biggest mistake is to letmoney be the biggest secret in the
family. Don't talk about money.Polite people don't talk about money. Don't
ask what that cost, don't dothis, don't do that. Well,
then there's no way to understand orlet these kids grow up to run a
real budget. They get the creditcard and they go nuts. It's magic
money. I don't have to payfor her. The bill goes to my

(09:41):
parents. So it's get them involved. Stop making it a secret. Of
course, you don't want them discussingit in front of Aunt Phillis. Don't
ask her what she paid for thatugly blouse. You don't do that.
But polite people don't do that anyway, that's not the point. But they
can ask afterwards. They can knowwhat your has costs, they can know

(10:03):
what the bills are. And frankly, I'm an entrepreneur and I've always shared
everything with the kids, and mykids knew is it a Philamonnon knight or
is it a Macaroni Knight? Andthere wasn't any shame to it. It
was that's the way it works.Oh okay, let me let the audience
and the listeners know about your background. Nineteen seventy two, she was one
of the first female executives at theChase Manhattan Bank, which at the time

(10:26):
was the largest bank in the world. And as she went on to become
president of the first women's bank.And you've had, you know, obviously
so much more experience over the years. Would you would you do anything differently
with your children? I know yourgrandchildren too, but with your children now,
knowing what you've gone through, wouldthere be any changes in the way

(10:50):
that you raise them regarding money andthe values there? The truth is probably
not, because I was teaching thebasic life skill and the values around money
and my values, you know,and I value generosity and I value volunteerism.
You know, the kids have alwaysbeen involved in that, and I

(11:11):
value finding your passion and pursuing it. Both my kids are entrepreneurs. One's
a social entrepreneur and one is inthe wellness world. So you know,
I love who they are and whatthey're doing. They're very involved in giving,
very involved. It's part of theirfiber. So yeah, yeah,

(11:33):
it's great, And you know what, you raised them that way? They
know that. I mean, there'snot a trip that we go on that
we don't have a day of giving. My son and I just got back,
but travel is one of my passions, and we just got back from
Zambia on a safari. But there'sa day of giving that's there, and
it's built in. You know,we're talking about money, and it's funny
that you're bringing this up. AndI have three amazing kids and an amazing

(11:58):
they're amazing mother, and we hada great experience raising them. But I
remember taking my kids to a placewhere we would get this food. It
was the food pantry. You getthis food, we'd weigh it, we'd
have certain clients we'd have to takeit to, and they never forget to
look on the face of these people. And then also some of them who

(12:20):
later we ended up finding out thatwe couldn't go there because they had passed
away, they had some mental problems, some issues and so forth. But
there was something there, the practicalhands on delivery that we forget about,
not just giving money or sending acheck. But what you're talking about really
hits home with me about you know, I'd love you to share anything else

(12:41):
about that tactile, hands on,practical piece that we can do with our
children beyond just giving them an iPadand telling them, here, watch this.
Well, you know, it's veryinteresting. I have a story about
my son when he was five yearsold, and again, you know,
my kids were raised on it,and we were living in New York City.
I was president of the First Woman'sBank, and I would allow,

(13:05):
you know, my kids to gointo the little local bodega on the corner
of the little corner store with meobviously, and they could figure out what
they could buy. So my sonhad his quick cash and okay, I
was a little liberal on the sugarin those days, and I let him
buy Tutsie rold pumps. So hewas he got the tout ze rod pups
and he's counting out and he's figuringout how many tutsie roll pumps. He's

(13:28):
standing in line, and in frontof him is a woman. She has
one orange. It costs thirty threecents. She put it down on the
counter. She was a homeless woman, and she dumped her little cup of
change and the store owner was countingthe change. She didn't have enough,
so he told her put the orangeback, and she was collecting her money,

(13:50):
and my son was watching this alittle tiny you know, five year
old, and he said, willexcuse me, excuse me, ma'am.
I would like to buy that orangefor you, but I have to start
over again with my tutsie rood pops. So she said no, no,
no, she gotten there. Shesaid, no you can't, and he
said no, no, no,no, no I can. I just

(14:11):
need to start over. And noweverybody in the store is silent, and
I'm sort of looking at this kid, going where are we going with this?
And he goes no, no,no, and she said no,
no, no, I can't letyou do this. And he said,
no, this is my quick cash. I worked for a living. I
get to decide how I spend myquick cash. I want to buy the

(14:33):
orange for you, but I haveto put tutsie roal pops back. And
she again insisted no, and hesaid, didn't you read my mother's book.
Now she hadn't, which was aninteresting but she finally relented and he
did this whole thing, and heput the tutsie roll pups. He bought
the thing, and he came backto me. I was weeping. Every
woman in the store was weeping.This was amazing. So he came back

(14:54):
to me and I'm crying and he'slooking at me like, oh, he's
in trouble. And I said,I'm so proud of you. That was
amazing and he said, no,no, no, you shouldn't be proud
of me when I'm doing what Ishould be doing because she couldn't afford that,
but I could. And someday whenI need food, there will be

(15:15):
somebody there for me. Well,you know that was like it. You
know, every woman in the storesent me their children to raise. But
anyway, it's those types of ahamoments with the kids when you know they
get it, they get it.It's not hard, but it's profound.

(15:37):
That is an awesome story. I'mtrying to think of baseball right now.
I don't know. Somebody once toldme, if you're about to get like
emotional and you don't want to cry, I just think of baseball or some
sport. I'm telling you right now, those things move me. Those those
stories out of the mouth of babes, These these kids that they're smarter than
we are. They teach us whenyou do the build that foundation. Well,

(16:00):
and also it's interesting because people havesaid, well, there's a last
into teenagehood, you know, whenthey become jerks. And I said,
interestingly enough, a friend of his, this guy, this kid, Ryan,
had saved his money all summer longto buy a car, and he
had five thousand dollars to buy acar and you know, a piece of
jump. But he was going tobuy a car. And I didn't let

(16:21):
my son here. I was sortof you know how you do that self
walking through the kitchen, but you'relistening, but you're not establishing eye contact,
so they think you can't hear,you know that part. So I
was doing kind of the mother's selfwalking. And my son said to him,
Ryan, you can't spend five thousanddollars on the car. And he
said why, He said, becauseyou didn't give ten percent to charity?

(16:44):
Did you give ten percent? Didyou give five hundred dollars to something?
And I was like, oh,my good. So I'm walking and of
course Ryan goes, no, Ididn't, and my son goes, those
are the rules. Let's go pickout a charity. And they did.
And these are goofy teenagers. Sohis mother called me up at night and
said, you know, did alienspick up my son and drop off somebody

(17:06):
else who looks like him? Becausehe walked in to say that he and
Rhett picked up his animal shelter thathe's giving because he loves talk. He's
giving five hundred dollars too, andI you know, I said during that's
kind of the way it works,and the lion hasn't forgotten it. Yeah,
it's a great, great lesson,you know you. I thought we

(17:26):
would be talking about, you know, the actual teaching and lessons on money
and putting out the money and countingand so yeah, it's I didn't even
know where we were going to gowith this show. Your background is so
immense in this area. And Ilove that story. I love both those
stories. I love. I justlove the fact that you've done the homework

(17:47):
and you and you raised them rightwhere they they came out and that's what
came out of their mind. Doyou have any other recommendations for parents?
You know, it's funny you saidit shouldn't be like nobody talks about it,
and I know a lot of familiesit's very hush hush you don't talk
about which is crazy because then thatdoes inhibit them from understanding the value of

(18:10):
it. But how do you talkabout it? What are some things that
you would say to kids? I'mthinking three to seven, you know those
years I mean, and then lateron that should be natural. But in
those years about money, well,you still talk about your values. You
talk about Hey, kids, look, there are all these things that were

(18:32):
we are saving for because it's important. We're saving for college, we're saving
for retirement. We're savings for anew car, a new home. We
need the air emergencies that crop upeach month. You know, the car
need tires. The dog is vomitingall over the carpet. You know,
we need to take the dog tothe back. Those types of things.
So you start subtly teaching them theway it works. Hey kids, let's

(18:53):
take a vacation this summer. Butyou know what we can only afford,
and don't be afraid to say thosewords. You know, two thousand dollars.
Let's figure out what we can dofor that. We could drive,
we could you do day trips,we can do whatever. You guys,
go online and figure it out.And by the way, if we get

(19:14):
on a budget, we all mightbe able to come up with ways to
save money. We don't need designercoffee every day, we don't need designer
water, we don't need Let's figureout together as a family. Let's put
a challenge together of how we canpull out more money each week to do
some cool stuff that we want todo as a family. Throw it back
to them, Let them go onthe internet and figure it out, Neil,

(19:38):
I love that. Let me throwthis at you though, knowing some
parents who feel like that. Youknow, these kids have it tough,
they're learning, they're getting their waythrough life here. You know, I
don't want to make them feel uncomfortablewith the pressures maybe that we're under.
And you know what I'm saying,So some people do keep it quiet.
What do you say to them,Well, if you're bankrupt, if you're

(20:00):
going, you know, paycheck topaycheck and you're really petrified, No,
don't, but that's some time foryou to be looking at your own financial
life. What are you doing?You know, cut it out. But
the big thing is again to reassurethem. Don't say stupid things like don't
worry. If something happens to me, you'll be okay. That means nothing.

(20:25):
This is what women were told yearsago by their husbands when the women
didn't work and they were home raisingthe children. Don't worry, you're taking
care of I don't even know whatthis works mean? What does that mean?
A kid wants to know what happens? Where do I live? Where
do I go to school? DoI have a bicycle? Do I get

(20:45):
to go to Some kids want toknow very specifically, so you do it
at different age levels with them.We have a fifty plus divorce rate in
this country. The kids are petrified. What do you think They don't hear
the fighting in the household. Mostof our divorces, all divorces are based
upon money issues. You think thekids don't know there's a problem in the

(21:07):
house, and then they walk inon a fight and everyone goes, oh,
no, no, everything's fine.Well, the kids aren't stupid,
and we know how this builds upwith stress. So you turn around to
the kid and you say, it'shonest, we're not doing well. We're
talking about different things. We willkeep you posted as things go. I

(21:27):
don't know, but I do knowthat I love you. I do know
that you will go to school.I'm not sure where we're going to live,
but you know what, we willbe a family. The family may
be you know, the three ofus, and that you get to visit
dad or vice versa, but thisis the way life works. Unfortunately,

(21:49):
it's full of changes. And toraise them that everything's fine all the time
and everything's going to be is not. You raise them without resilience. You
raise them that they're not able tocope with change. Look at the stress
that our kids have been under becausethey were raising some fantasy bubble. That's

(22:12):
not how life is. It isfull of changes. But I will raise
you to be able to cope withthem. I'm talking to Neil god for
you. By the way, ifanybody would like to see more information about
what she does and what she speaksabout and her books, you can go
to any E A, L Eg O, D F R ey dot

(22:33):
com, Neil godfree dot com.You would fill up my day twenty four
hours. I could talk to youabout all this, and I would love
to have you on again. Iwanted to end with a question that could
just kind of give some insight.If you are in front of a group
of parents, and you know alot of parents say no, I don't
know what I'm doing here. Thisis the first kid. I read everything

(22:56):
you know, obviously, the handson, taking them places of museums,
reading to them, doing the tactilethings you talked about, getting them involved
in chores and all these things arereally important early on. But if you
were you had just a couple ofthings to say to these parents, and
they have young kids under the agesof five, and they're just some of

(23:19):
them just don't you know they don'tspend the time, the quality time.
What would you say to them thatwould just really send a message home to
kind of be the last question here. You know how stressed you are about
money. I don't mean you,but they are about money, and you
don't want to pass that legacy ontothe children. And wouldn't it be wonderful

(23:41):
to help them design a life wherethey could earn they've spend and share in
a healthy manner to achieve their goals, their dreams. Wouldn't that be a
wonderful gift to give to your kids. Why wouldn't you do it? No?
Absolutely, it's a great point.What's your death finition of success?
Neil, that you wake up everymorning you want to jump out of bed

(24:03):
and go do what you want todo. And it doesn't mean that we
all have fantastic jobs. We don't. But if you can, if you
know in yourself that what you're doingis that you're feeling your soul and you're
doing something that you want and itmay be after work that you're doing it,
but that you're not stressed about it, and you're happy and healthy and

(24:26):
have that social communication around you andyou know you're giving back. There's nothing
that makes you feel better than giveback. And it's okay to want things
and to say the money to getthem. It's fine. And don't feel
guilty. You know, check theguilt at home. It's not an emotion

(24:48):
that does anything for you other thanbringing you to your knees. So just
be excited about life and what itcan bring and what really do you want
and then design it. Godfree speaker, author, board executive, entrepreneur,
fantastic Information. Thank you, Neil, Thank you great to be here,
about to come back. M hmh m h m h