Bobbi Rebell, CFP® is the author of Launching Financial Grownups: Live Your Richest Life by Helping Your (Almost) Adult Kids Become Everyday Money Smart, a financial literacy advocate, the host of the Money Tips for Financial Grownups podcast and the founder of GrownupGear.com.
378 Teaching Kids Finances
Bobbi Rebell
Teens and young adults need to know how to navigate the financial challenges of adulthood including debt, credit cards, how to manage their own household, and more. Are we teaching them everything they need to know? In this episode I talk to Bobbi Rebell, author of Launching Financial Grownups. If you want to know what to teach your child about money, this is a must-listen!
Teaching Kids Finances - Bobbi Rebell [378]
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*This is an auto-generated transcript*
[00:00:00] Bobbi Rebell: They might know a lot more than you think, and they might also have some misperception. That you wanna correct?
[00:00:07] Hunter: You're listening to the Mindful Mama podcast, episode number 378. Today we're talking about teaching kids finances with Bobby Rebel.
Welcome to the Mindful Mama podcast here, it's about becoming a less irritable, more joyful. At Mindful Mama, we know that you cannot give what you do not have. And when you have calm and peace within, then you can give it to your children. I'm your host, hunter Clark Fields. I help smart, thoughtful parents stay calm so they can have strong, connected relationships with their children.
I've been practicing mindfulness for over 20 years. I'm the creator of Mindful Parenting, and I'm the author of the best selling book, raising Good Humans, A Mindful Guide to Breaking the Cycle of Reactive Parenting and Raising Kind Confident Kids. Hey, welcome back. So glad you're here. Listen, if you haven't done so yet, please hit that subscribe button so you don't miss any episodes.
And if you've gotten some value from this podcast, I would greatly appreciate it. If you can just go over to Apple Podcast, leave us a rating and review. It just helps the podcast grow and it just takes 30 seconds and I. Hugely appreciate it. In just a moment, I'm going to be sitting down with Bobby Rebel, author of Launching Financial Grownups.
Live your richest life by helping your almost adult kids become everyday money smart. A financial literacy advocate. She's the host of Money Tips for Financial Grownups, podcasts, and the founder of grownup gear.com. Bobby was previously a global business news anchor and a personal finance columnist at Rooters, and held various journalistic positions at top news outlets, including cnbc, cnn, and pbs.
And we talk about. Teaching kids finances. Kids, teens and young adults need to know how to navigate the financial challenges of adulthood, including debt, credit cards, how to manage their own household, all this stuff. So we're gonna talk about all this and if you want to know what your, to teach your child about money, this is a must.
Listen, join me at the table as I talk to Bobby. So what are some of the essential money skills that kids need to learn? I think this is something that we parents neglect a lot, which I'm so super excited to talk to you about this. And of course my kids are now 15 and 12, so I'm like, I'm thinking about them and my older daughter's finally getting her first job.
She's just started working. So what are some of these skills that they need before they leave the house?
[00:02:44] Bobbi Rebell: They need the basic life skills. They need to understand how to run their life. Much like you think about just the basic home EC courses that used to be taught in school and they're really not.
But the most basic thing they need to understand is how to pay their basic bills, what it costs to live their life. How to, what kinds of things they need in order to be as I like to call it, financial grownups. And that's not something you're gonna just sit down with them and have a conversation at a specific, random age at a specific lifestyle milestone that you're gonna just tell them, here's the, the grocery list of the financial skills that you need to know.
No, it's a lot of things that have to evolve over time, and I don't want anyone to panic and say oh, I missed it. I didn't do this. Specific milestone, but it is something that is going to evolve and a lot less painlessly than many parents may think it can be intimidating, but the truth is almost all the lessons that you need to teach your children about money are things that you are already doing, probably doing very well.
And if you just think about it a little bit more consciously, you can teach them in the moment in a very natural, authentic, and organic. .
[00:04:00] Hunter: Okay. That's heartening because I feel like, personally I grew up without a lot of money Lessons except for money doesn't grow on trees was like one lesson I learned and it was like I think I, as an adult in my, later in my life, I learned about, oh, like investing and saving, all I think I learned as a kid, as a kid I put half my allowance in for savings and then I bought.
My first car when I was 16, and then I, and I got learned how to get college loans. I learned about debit versus credit cards, but I feel like there were so many lessons that my own parents missed that I wanna make sure I don't miss. So I love this and what I. At least with my husband and I, what we've tried to do is be a little bit transparent about what things cost and how much money we have and how much money we earn.
We try to like be open and transparent about that. Is this one of the things that we should be doing is talking about things as they arise?
[00:05:02] Bobbi Rebell: That's exactly what you should be doing. And I'm gonna reference back to one of my favorite episodes of your show and I was just looking at my phone trying to find it, and I'm sure you can probably say the guest name.
But it, she was talking about how to get your kids to help more around the house and her general message was, Basically, don't try so hard, just include them in what you're already doing, and I would apply that to money lessons as well. Just bring them along with you to what you're already doing. So I remember growing up my mother on Friday afternoons.
Part of our routine was we would go to the bank because banks used to close and then you would not have money to buy things over the weekend. So she had to figure out what she would need over the weekend. Fill out a withdrawal strip and go either inside to a teller or more often. We would do the drive through, which was super cool at the time where there was this tube, and you would put the paperwork, actual paper she'd fill out and she'd put in the tube and it would get sucked under the, under the road somehow and magically appear.
You'd see it pop up in the banking window, in the drive through, and then they would do something and come back and they would put money in the cylinder and it would magically go under. I still have such a great childhood memory of this. And then she would have money for the weekend, right? So I learned about, planning from just being there in the car and asking her what are you doing?
And she would explain what was going on. So I would say the same thing to parents is, Mary, people complain. They say, oh, it's so hard because everything's digital. I would say, no, first of all, we don't have a choice. So Alyssa and I even discuss what coulda, should or woulda, but also you have everything right there on a screen.
So I live in New York. When we take cabs, there's an app called Curb that most of the cabs are on, and it says very clearly both on the screen of the taxi what's going on. It says all of the surcharges, the taxes, the basic fair to get the cab the fair per whatever, one eighth a mile. And I was able to teach my now 14 year old how, you know how much a taxi costs.
It was right there in front of us. So it actually, I feel, made it much easier. And we're in the taxi, we don't really have anything else to do, but discuss how much taxis cost. And from there we also used to do something, and this is pre covid, when we had more choices he would have activities and we would say, I would say, okay, you have half an hour before your activity.
We could take a taxi there and just chill when we get there. Or you could use the same amount of money to have a quick snack that you can choose, but then we'll walk. I was empowering him, but he was also learning the price. He had to figure out, it had to be a price that would, the snack had to be less than, or the same as a taxi.
Cause we could control the price of a snack, not the price of the taxi. So integrating it into your life, and as you say, which you were definitely doing correctly, being transparent is everything.
[00:07:54] Hunter: So it's, and a lot of people have, we have hangups about this, right? Like we have hangups about talking about money in the United States at least.
I don't know how, what it is like in other places. But we have hangups about saying like how much you earn, how much you don't earn, et cetera, how much things cost. These are things we can talk about with our kids. We can say, this is how much our mortgage is, this is how much I get paid each month. This is how much the taxes were.
That kind of.
[00:08:22] Bobbi Rebell: Yeah, and the truth is though, it's okay to be Mindful of the appropriate age for that. You don't have to have this discussion with your five year old, but the odds are your teen, they can look up some of your assets, probably your home, let's say. And if you're driving a certain car, they can pretty much guess what the car costs.
And so they might have a pretty good sense. They can look up what kind of job you have, what that would pay. They might know a lot more than you think, and they might also have some misperception. that you wanna correct. So it's important that you have that communication because they might see, oh, you have this job so you make so much money and our house is worth so much.
Why can't we go on this crazy expensive vacation that all my friends are going on? And they may not realize, number one, you may have other expenses that they are not seeing, right? Or maybe that's just not your choice. Maybe that's not where you're choosing to put your money, and it opens up the door to have these conversations, not just about how much money you have, but how to decide the best use of your economic resources.
[00:09:26] Hunter: Yeah we've had these conversations with our kids as growing up in different ways. We chose to invest in early childhood education for our kids, cuz I believe that was like, makes an incredible lasting difference. We paid for this private Montessori school that like, happens to be like right next door to me basically.
And and then, As it became time to go into a public school, I ended up being on the board of the first public charter Montessori in the state of Delaware. And so very excited. I was like, this is how much money we're gonna be saving every year, and we can take this money and we can do these kind of things with it.
And it's been pretty interesting actually. Like my oldest daughter, Maggie, who's 15 now. For the last couple of years she has somehow did the research, I guess like during the pandemic. She must have done the research on this, and she did the research on what it costs, like college costs and things like that.
And found out that college is like much less expensive in Germany and you can actually go for as an American citizen, you can go and pay with the Germans pay, which is like barely anything. And so now she's having us invest in German. And she wants to go to college in Germany so she doesn't have student loan debt, which I shared with them when I ended at, stopped paying my student loan debt in my forties, and so it's been pretty interesting to see them incorporate these lessons, but like in different ways. Sometimes I feel like when we're transparent with my 12 year, She worries too much, cuz she, she's into horseback riding and it's like a super expensive sport to do. Luckily she's pretty good now, so they want her to ride this horse.
So she's riding four days a week. She doesn't have to like, pay for every single time she rides, but the lessons are pretty expensive. It's like the most expensive thing we do. So she, I feel like she worries about that and she's like, when I get a job, she just told me recently when I get a job, I'm gonna pay for my writing lessons.
And I thought, what kinda kid says that? We've been paying for this thing all along, we haven't, and. And I said maybe maybe you can pay for half or something. I don't know. Just it's interesting to see different personalities take in the information in different ways, yeah,
[00:11:53] Bobbi Rebell: you're exactly right. And that's the truth. Different kids are ready at different stages and different kids will react in different ways and that's just the amazing thing. It's, it always still blows my mind. You could have siblings and such incredibly different personalities and different values and different goals.
And so it is important to treat each child individually. And what I hear that I love is that you are listening to your kids very clearly and you're tuning into what's important to them. And the older one, very important to her to graduate college debt free. She's willing to make choices that maybe she also does.
I hope she also wants to learn German and is interested in living in, in Germany for college. Cause I hope that you don't wanna do that just to get the tuition, she clearly is driven in one way and the younger one is driven in different ways and that's amazing and it's important to respect that.
I've had that in my own family, where the oldest, she really wanted originally she wanted to be a teacher and then she decided she really wanted to be a homeowner at an early age and she really wanted to have a job that was high. She didn't wanna stress about money and she wanted to be able to, she's not into material things, as is typical of many 25 year olds.
But she wants to travel. She talks about, in, in my book, she talks about that she's saving for a trip to Japan. It was postponed cuz the pandemic, but she is talking about it again now. And she wanted to have season tickets to or season passes to Disney World. Those are her values. And she thought, how do I get to my goals?
I need a higher paying job than, I'm gonna go be a computer like a risk consultant. I always botch what she actually does, but it's very complicated and she's very good at it. But she was able to, switch her major, switch into the school of Informatics from the teaching school at Indiana and graduate and get a really high paying job.
And from there she's been very successful because she's good at the work. So she didn't choose something she wasn't good at. She didn't choose something she didn't like. But if everything paid the same, she might not have chosen it, but she really focused on what she was interested in. Number two, just graduated from college.
He is studying, or he studied film and TV and he is still figuring it out. He knows that he can live at home for a finite period of time. We're happy to have him. He's a great kid while he figures it out, but he also knows that he has to find a way to create a life for himself. In the film and TV industry if that's what he wants to do.
And that's a little trickier than just having a corporate job and we support that. But we're having those conversations with him and we're listening to him and we're letting him make the decisions and understand that choices have outcomes. I don't like the word consequences cuz it's negative, but the choices he makes will have outcomes and he will live with whatever outcome comes from the choices that he makes.
And it's our job to just support him and make sure he understands as much as possible. About how the choices he makes will likely.
[00:14:51] Hunter: Okay, so before we get deeper into kind of like what the teens need to know, can we take a step back and just go over the basics of what do you recommend? As for things like allowance and stuff like that should get kids, get just a certain amount of money and then, and not have it be tied to jobs.
Should it be tied to jobs? When we think about like kind of those kid basics what do you recommend there?
[00:15:21] Bobbi Rebell: I think people have to look at the kid and see what the kid values and work backwards from there. Because for example, if I say to my son, you get allowance if you do these five things, but he has nothing he needs to buy with the allowance.
It doesn't work. That's what happened in our household. It just doesn't work. So he is not fin, this is the 14 year old right now. There's literally nothing he wants to buy. He doesn't wanna buy clothing, he has his computer games. He is good. So you have to find other ways to teach him about money. And we do that.
We can go over how investing works and have conversations. And what's interesting is that we don't always agree. He's going through a phase where he has. Concerns about how the stock market works and capitalism. And so we're having those discussions and I think that's really important and healthy for kids to be allowed to express their own opinion.
And for you to listen, especially in this age where there's so much controversy about NFTs and crypto and who knows what will be when this airs because things are very volatile. Right now, I am not an investor in crypto or NFTs because I don't understand it, and I also, as someone in middle age, don't necessarily want to take high risks with my money at this stage in life.
That's not to say it might be an, it might be an appropriate investment for your 20 year. But what's important is that they understand the risks. So with back to the younger one, I think that you have to look at what is going to resonate with the child and really focus on your goal. Is your goal to get money into their hands or is your goal to teach them about money?
Is your goal to teach them how to earn money? There's different pathways to different goals and so allowance, I'm making it more complicated than it needs to be in some ways. But, it just, I guess I'm giving you a big it.
It depends. And different kids, but that's the thing, like allowance worked really well with older kids. It worked really well with my older kids, but the younger one, he's just not, he doesn't, if you say you're only getting your allowance if you make your bed, he'll be like, no. Okay. . And that's the problem with tying money to things, and then the other thing is if you just get the money you can tell them what they're gonna do with it. And we did do that. I will say before the pandemic, a lot of this is pre pandemic. Before the, before the pandemic, he was getting an allowance and he was putting it. Ron Leber has a great book called The Opposite of Spoiled, and he was putting it in jars, which are save spend and give.
And that worked really. And we would have rituals around money where whenever he received money from a relative, if it was in a check, we would, instead of doing it on the phone, I would have him go to the teller and we would deposit it and he would make a video right then on the spot for the person that gave him the gift, thanking them for the gift and showing them that he was depositing it in his savings account to be invested in mutual funds.
And then we would send that video. To the, it was almost always a relative who had given him that money and that way he had some sense of, where it was going into the bank and that kind of thing. The teenage years, I'll tell you, 14 is a tough year for that because with the pandemic, he doesn't go anywhere really.
His school has had a lot of covid outbreaks, I've thrown up my hands right now with that one, but the older ones, yeah. Allowance definitely worked. And accountability with money. We have had them present us with budgets in college when they wanted, money to spend and that kind of thing.
And I think that can be really effective. The accountability aspect. I remember when the 22 year old started college and we said to him and he went to college in New York City, which is incredibly expensive, and we didn't really know. What to do about a budget because it is so expensive that we wanted to be realistic with him.
We didn't wanna put him on such a tight budget that he couldn't participate in what his peers were participating in. And again, we are privileged enough that this was a choice. And he came to us and we said, so for the first month or so, what we're gonna do is, and he's a very responsible kid.
I would not recommend doing this with a kid who's gonna go wild. This is not the kid that's going wild. This is the kid that's gonna underspend. And we said, for the first month or so, we want you to just write down everything that you're spending and then we'll reimburse you. But we need to know everything you're spending and where the money's going.
And then we'll evaluate together as a family how we're gonna work. You're spending money for college, right? And by the way, he has jobs too. So this is just part of it. And he got upset. He said, wait, this is such a classic line under, he goes, wait, you're making me feel like a dependent. You are
[00:19:58] Hunter: dependent.
Oh my goodness.
[00:19:59] Bobbi Rebell: Process that. And my husband was like, exactly. He's you are 100% dependent. This is before he had he taught fencing and things like that, but this is before he, he had like real jobs, like he's had since, but he was completely dependent on us in this, at this point. We said, you are completely dependent on us.
You are dependent. He's I wanna make you make me feel like I'm a dependent like I need you for the money. And we're like, but you do . And I think that was a really healthy thing for him and for us because it was out there. We are completely supporting you and therefore we have a right to know where every penny is going.
And that can incentivize a kid to, to earn their own money because maybe they don't wanna have to answer to mommy. And. Yeah. And I don't know that necessarily triggered him to get more jobs. He had, by the way he did fencing for many years and he was always teaching younger kids fencing.
So he did always have jobs that sort of paid minimum wage and he was very good with the moms of the younger students. They would hire him to go coach them at fencing matches. So he was always a little bit entrepreneurial in that sense, and always was respectful of earning money. But in this. He was completely dependent on us and he did go on to earn a substantial amount of money at various jobs in college, which he did invest.
And as we record this the investments are not looking great, but he has done very well over the last few years overall in his investments. And we had a lot of conversations about where to invest the money and how to invest it. Whether you should put it all at once, put it in dollar cost averaging, and these are great conversations you can have anytime there's money on the table where.
Where to put it where
[00:21:35] Hunter: to put that money. I wanna, yeah, I wanna, I definitely wanna talk about that, but just to circle back to allowance, just to fill you into your listener about what we did. Knowing all the different things I know about intrinsic versus extrinsic motivation, I didn't want their my kids' allowance to be a reward for things paid.
I wanted them to help her out around the house because that's just what we do. Everybody does that. It's not tied to certain things. So they've gotten. An allowance, they get half, I think it's like half of their age in allowance, in dollars every week. So it's pretty generous and what I wanted them to do and they have to put a, a certain amount automatically goes into savings.
But what I wanted them to have the opportunity to do was to like, go make their own mistakes with money at a young age. Just, so they would have experience. Making mistakes, having failures, having good things, saving for things. And and I think that's been interesting to see.
Like we've even given out loans. We gave our daughter a loan to buy a fish tank . A few years ago she got this big fish tank and all this fish and she had, she was broke for six months after that cuz she was paying off her loan. There's different ways to approach it. And and these, all these, the, these are all things to think through.
Like what are, what are you gonna, what do you want your kids to, to learn about money? And actually, and so to just follow up with the allowance thing. Our plan is for my daughter ends allowance at 15. You're, you turn 15. I'm sorry. You don't have any allowance anymore. And so they're the hopefully incentivize them to get their own part-time jobs and things like that.
[00:23:24] Bobbi Rebell: I love that. I'm learning so much from you. Yeah. But I will say like they all have chores around the house. The 14 year old, he may not wanna make his own bed for money. That doesn't mean I don't make him. Bed and he does a lot of chores around the house, cleaning up after himself, after meals.
He does the garbage, he'll do, help with the laundry and things like that. So we don't necessarily tie those things to allowance, but he just, right now, his top priority, he's not motivated by, it was 50, it was $15 when we were doing it. But we, like I said, it's fallen apart during the. For all the reasons that a lot of things have fallen apart during the pandemic.
He just, it, doesn't not money motivated these days, but I think that's a season of his life. And I think that's another thing with kids is they go through different seasons. .
[00:24:11] Hunter: Okay. So a lot of kids in these generations have been, we've been through a time of a lot of, very intensive Parenting where we are much more involved in earlier generations.
And we've seen books like Julie Li, Scott Haynes, how to raise an Adult and Different things, how this is having an effect on kids. Are you seeing the way kids. Handle money or their comfort levels around money. Is this, has this been changing as time goes on?
[00:24:47] Bobbi Rebell: I think it has been changing because there, there's so much more information out there, hunter, and I think for the most part, that's very healthy.
Because when we were growing up, we didn't, we couldn't just look up how things worked. If you don't understand it, and sometimes kids will tell you they understand something and this applies to not just money and they only under, they understand part of it or they think they understand it, but not completely.
And a good example of that might be a 401k. So a 401K is a retirement vehicle, but that's where you're putting the money. It's the bucket. It's not the investment within the bucket, right? So a lot of kids, and this happened, and I talk about it in the book with my 25 year old. When she got her first job, she diligently showed me, she's look I'm maxing out my 401k.
Aren't you proud of me? And I'm like, I am. What did you invest it in? And she goes, it's in the 401k.
[00:25:42] Hunter: Okay. That's how I would answer.
[00:25:45] Bobbi Rebell: Just a huge and and exactly. So you're laughing, but this is so common and it's so important. This is where it's good to be a helicopter slash concierge parent and get in there because, we can talk about taking losses and making mistakes.
Like I think if a kid wants to buy a little bit of crypto, It may do great. I have no idea. I'm not saying it's not gonna do well, but it may crash and burn. Okay, you're young, it's a small percentage. Take a risk, learn your lessons. Either way, fine, but you don't want them to learn a lesson in a way that's going to have lifetime ramifications.
And if you don't get in there and make sure that you're a young adult when they set up their 401k actually puts the cash in an investment. And the system should be flagging this, by the way, but they may not. You're gonna have a kid who you know, looks up at a certain age and says, oh my gosh, I missed all these bull markets.
I missed all the growth in the market. I missed all this compounding that could have happened with my money. So we as parents really should be proactive with their young adults and just do that little check with them. And to your point originally about the information, if a kid is embarrassed about a parent, at least we have that catch all where we can say, Let's go over this together.
Let's pull up whatever your favorite website is. My favorite website for a lot of stuff, frankly, is irs.gov. The IRS's website is incredibly well written and you can look up exactly what you know, what is a 401k. It's not gonna give you investing advice, obviously, but it's gonna give you the actual definition because that's part of the tax code.
It will explain exactly what a 5 29 is. It will explain all of those things. But there's so many other online resources that will give information where you could read it with your kid because maybe we all also have our self doubt. Maybe the rules changed about a Roth IRA and we wanna double check it.
When we're telling our kid that when they first start earning money and they're under that bar where there's a certain point when you earn enough income, and we all aspire to do that. No, everyone wants to be earn so much money that they've maxed out their Roth ira, but you want your kids to be investing in the Roth IRA if they have earned income as early as possible, because what better time than when they don't?
Dependence and other responsibilities. What better time when they have the longest runway possible to have that money grow than to stock away that money in a Roth ira? You can look up this information with your kid because it's all online and just go over it with them. And it's such a wonderful thing and it's a great thing to do together.
[00:28:13] Hunter: Bobby, I think you're gonna have to help me become a financial grown up here because as a kid I grew up with, lower middle class parents. There was no investing that happened in our family. Like it was not something that happened at all. I had to learn about it as an adult. And I had been, I've, I have been investing for the last, 15 years or so, but, and I started, I was very proud of myself for starting my kids.
Investment account, like I do a well front account for each of them, just like a little bit of money. So I'm like they will have that compound interest cuz it'll go for a long time. But I don't know what a Roth IRA is. Can you tell me that in basic language please? .
[00:28:55] Bobbi Rebell: So a Roth ira. A Roth IRA is an investment vehicle generally.
Okay. So an IRA is retirement money. Okay. Individual retirement accounts, you can put money. A traditional ira, you're putting money in now and you don't have to pay tax on it now, and so it can, it will grow. And then you pay tax when you take it out at age 59 and a half or later. Okay. What happened recently is they have a new kind of IRA called a Roth ira, and you can put in money that's, you've already paid the tax on and then you don't have to pay the tax ever again.
Ooh. Which is awesome because
[00:29:33] Hunter: then it grows. So if you have child, that sounds
[00:29:35] Bobbi Rebell: great. So here's, so the real value add, why? So basically you're paying tax either before or after, right? So for me, in theory, my husband and I, we're middle age, in theory, we're in our higher earning years. So we wanna defer taxes because we think we'll pay less tax when we're retired.
That's the bet. So we wanna go into a traditional IRA or any retirement vehicle where we pay the tax later. We don't wanna pay tax now, but if you have a kid that's in a low tax bracket where they might be paying almost no tax, right? You want them to. in savings vehicles where they put in after tax money and then they never pay tax again.
Yeah. Oh, okay. So it's a big opportunity for young people to be in anything that's Roth. If they have a job and it offers a Roth 401k, do that. If they have a, just if they're a 10 99, which means they're basically part-time employees or contract employees, which is what my kids were when they were in high school.
Then a Roth IRA is a great place to park some money, and as long as they have earned income, they can do that.
[00:30:38] Hunter: There's not a minimum that they need to do or fee.
[00:30:41] Bobbi Rebell: If they earn a dollar, they commit a. Really, if the, let me say that, if you mentioned you're with Wealthfront, Wealthfront might have a minimum to open an account.
So not speaking for that, yeah. And most of them, if you say something like I don't have $6,000 to write a check for right now. I can put in $50 a week every week as an autopay. They're good with that. That's ,
[00:31:03] Hunter: so you a broker. You go to a broker or what if you don't have a broker?
Like what if you know what, where for the beginners who are like, this sounds great. I should be doing this. Yeah. Where the heck do you go? ?
[00:31:18] Bobbi Rebell: So I don't wanna endorse any specific brand, so I wanna stay away from that, but it's not well front. It like, there's the robo advisors and there's also you could do discount brokerages.
So places where you could open up a Roth ira. And again, I'm not endorsing any of them. You could go to Fidelity, you could go to Schwab, you could go to Gosh, Vanguard is a popular one. And
[00:31:44] Hunter: these are ones where there are ones where people and are doing it Chase, Citibank. Okay. There are ones where people are managing it and then the ones like that I mentioned that where it's like an algorithm or robo that's managing the investment, right?
[00:31:58] Bobbi Rebell: So a Wealthfront or Betterment, those are robo advisors. And they're hybrids, so they will often, if you want, they can, you can be involved with a human, as they say, the discount brokerage is, you don't necessarily need a human actively managing your money. In fact, in most cases, for a young person, that's probably a bad idea because anytime a human is actively choosing stocks, it's gonna be more expensive.
And traditionally, those haven't necessarily done any better than an index fund. For example, a company like Vanguard, and again, I'm not endorsing any one company, Vanguard, you could go, you. Speak with 'em on the phone and they will send you the proper forms and you can open up a Roth ira. And then within that you can pick a, an index fund like an etf, exchange traded fund, which is basically a basket of stocks that you could choose, one that mimics an index.
So you could choose one that mimics a popular index like the standard and pores 500. And because. Automated in that you don't have a manager choosing each individual stock, it's just literally they're gonna buy whatever's in the s and p 500. So there's no thinking involved. The fees to do that will be very low.
So again, not endorsing any specific place, but a place like Vanguard, you could go and you could open up a Roth ira, they will explain it to you. They have great resources on their website, and then from there you choose your web. Your investment, which might be an etf like the Spiders spdr, and or you could do Q as a symbol for a technology one that's very popular and you can have it auto, automatically invested, and it's super easy and you can have it happen just in the background of your life.
And not have to think about it, but you might wanna say, okay, the limit I can put in $6,500 this year into my Roth ira. I'm gonna divide that by, when I get my paychecks, 26 paychecks a year, whatever it is, and I'm gonna put in that much every week, every other week. And Vanguard will be very happy to set up an auto deposit, to auto contribute every two weeks or whatever it may be.
That works. And then it's gonna grow. And if you do that at a young age, the compound interest is gonna be amazing.
[00:34:13] Hunter: Yeah. Is this something you did for your kids when they were teenagers, to help them get started with this?
[00:34:19] Bobbi Rebell: So the book opens up . This is a teaser for the book with me. This is why I wrote the book, hunter.
I could not get them to open up the Roth IRAs. Oh no. I was having such a hard time and I was thinking, wait, I have been a business news anchor talking about. For two decades I wrote a book on how to be a financial grownup. And I can't get my teenagers who are totally, we're not talking about problem kids.
They're both doing great. They both have jobs, they both have income, they have goals. They're nice, polite kids, whatever. And. I couldn't get them to like, just open it. And there's deadlines. You have to do it. If you wanna put in money and have the tax benefit, you have to do it by certain deadlines, contributions by deadlines, open it by certain deadlines, and they just weren't doing it.
And I had the hardest time and I was like, here's my broker at my discount brokerage. You can use him. You can open up a robo account. Here's places to, I was like, however you wanna do it, and I will help you. And they were just like yeah. And it wasn't getting done. And I finally had to sit down with them.
Talk to them and it goes back to their values and what's important to them. Bradley did open one. He's maxed it out every year since he's got a great growing investment account, except the market right now has been wonky, but for the most part, he's really been investing and has a very nice chunk of change as he graduates college in the markets, and some in cash, but a lot in the market.
Ashley was like I wanna buy an a. If I wanna buy an apartment, I need to have my cash accessible to me and I'm not gonna do that. And she may have opened the shell of a company but of a Roth ira, but she did not put money in there. And for me, I had to realize, wait. I had to listen to her.
What is her goal with her money? Her goal was to buy a home. She wanted to be a homeowner, and she was at age 24. Because she prioritized that and she knew that she did not want to put her money at risk cuz she didn't have the 40 year time horizon that I'm talking about with you. She had a two year time horizon and she knew she was a smart cookie.
She knew that she did not wanna put her money at risk. So it was a big lesson for me that even though sometimes things make sense on paper, you do have to pay attention to each. and understand what's important to them and work backwards from there. You can't necessarily tell them to do what you want them to do.
You have to help them do what they wanna do.
[00:36:51] Hunter: I'm, I love that you shared that story because I think that's, I can relate so much by the way, because my kids are so resistant. Some, one of my kids is so allergic to mindfulness being the daughter of the Mindful Mama mentor that sometimes it's shocking.
[00:37:06] Bobbi Rebell: But, and I do wanna mention, by the way, That the first person I called to be in the book was Julie Liko Hayes, who's in my book as an expert and has been so supportive of this book. And everyone should read her book, how to Be an Adult. And Chapter eight has some incredible insights about her own experiences with money.
And so I highly recommend both of her books. She has two books that I think really. Are eye opening and wonderful on the topic of adulting, but specifically she does address money on that one chapter, and then of course in, in my book as well. But she had some very interesting experiences, which I'll leave for people to read in her words.
Oh, good. But some are in my book. Some are in her book.
So
[00:37:50] Hunter: there, from what I'm getting from you, like there are also things that, there are pieces that we adults need to learn. You mentioned the investing, right? Like obviously I had no idea about a Roth ira and it's better for young people maybe than for older people.
What are some of the basics that the, we as parents, no matter how old our kids are, may wanna make sure we are handling in ourselves, so then we can pass on this knowledge to our.
[00:38:18] Bobbi Rebell: I love that you asked that. And one of the things, the book's been out a little over a month and I, the most common thing that people are coming to me and saying to me is I don't feel secure enough in my own knowledge about money to teach my kids.
So I avoid it, and I'm hoping the schools do it, and I think the school should do it. I'm not saying the school should not do as much as possible. So this is an and we as parents have to realize that whether we like it or not, we are the ultimate stakeholders in our children's future financial lives.
Because if they can't stand on their own financially, all the obvious problems, but also being the generation, and this is going, to a lot of what Julie Hays work is, as the helicopter parents that we've become. Realistically, we're probably gonna give them our.
To some degree and maybe extend their adolescence more than it should be, and we're not letting them fly and letting them be independent. And so to parents who feel they aren't quite there yet, I would challenge them to get themselves there and start paying attention to their own behavior, what they're modeling for their children.
Stop enabling their children to. Financial children. I don't know what else to say about that but, encourage them to be financial adults and financial grownups and understand that when they are, they will feel so good about it. There's nothing better than the satisfaction that a 25 year old has in paying her mortgage.
I personally hate paying a mortgage. I would contend she loves it. Because it's a mark of adulthood and she's doing it successfully. As for your question more directly I think one of the big things that we miss is wills and estate planning. And that's something that I, myself had put off. I took care of it a long time ago, but certainly I didn't have it, as early as I should have.
And it's so important not just to have a will realize that if you, first of all, if you don't have a will, you're gonna go the default will is what the government says. And I'm not gonna get political here, but I'm just gonna say, do you really want the government decid. Everything including your money.
Okay. Cause that's what you're saying. If you don't have a will, you're saying the government gets to decide what happens to my money and I don't think anyone really wants that. So I definitely, there's ways to do and I go through this in the book, but there's ways to do these things much more affordably than in the past.
You don't have to get a fancy lawyer. You can do it. Very straightforward. I think legal zoom trust and will, and again, not endorsing them, but those are resources that you can do to get this things done. And while you're there, it's also important and for young people to some degree, more important to think about power of attorney and health directives.
So it's very important that you know a living will you like a living will and because what I explained to my kids was what happens if for some reason you're just knocked out for a couple weeks and you're in the hospital? How do I know what bills to pay? How do I have the right to pay the bills?
It's really important to be able to get in there and help them with their finance. They're not available for whatever reason or whoever every this is. This goes to the whole family ecosystem. Everyone should have this because if something happens to you, you want someone to be able to take care of you.
And if you don't have the proper legal documents in place, you're gonna end up going to court. And if anyone knows anything about the court system, again, the last thing you want is have to go to a judge to get permission to like, basically get into the, figure out what's going on financially with a member of your.
So I think that's really important and obviously, choices about healthcare but also, but especially the financial stuff is really, in terms of my area of expertise, it's important to make sure that things are set up so that people can take care of your finances, should something happen to you.
[00:42:13] Hunter: Chastisement taken , my husband and I have had this conversation. We need to make wills like for the last 15 years, I'm, yes, for the last 15 years, I'd say we need to do that this year.
[00:42:28] Bobbi Rebell: And I wanna give a little tip, especially with the cost of a will, because you have to do these things, but you also, I don't want anyone to feel they have to spend a lot of money.
Many companies do have especially if this is gonna come out in the fall. In your corporate benefits, often there is legal benefits, and this is something I missed for years, but often for a very small amount of money, I think the one at my husband's company might be $9 a paycheck. You can have access to a group of lawyers that can do straightforward things like a will.
So one thing I go over in the book is with your young person, when they start a job, if it's a corporate job and there are benefits, go through all the benefit. , all the ones. There's fun ones they might miss. There's boring ones like the lawyers I'm talking about, but go through them because there may be so many things that are so valuable to them that they may not think.
So go through all of those. There might be pet insurance in there if they're thinking about you know what, the older one just got a puppy. Pet insurance at a better rate might be available through your employer. So go through and don't leave, benefits on the table.
There's a lot of great stuff there, including legal stuff. Every plan is different. I say read the fine print and read the big print, but I think that if you are worried about the cost of a will, just get a simple one done. It doesn't have to be complicated and see if your company does offer it legal benefits, because that may be something you can tap into and save a lot of money.
More importantly, get it done.
[00:43:59] Hunter: Okay, Bobby, you're giving us a lot of adulting to do , which which is really important, but for for me, I feel slightly like daunted and exhausted by the whole idea. Do you have any recommend recommendations for ways that we can make it habit or maybe we could close with that, like ways to build some of this this financial, work into our lives on a regular basis?
[00:44:29] Bobbi Rebell: I think, again, this goes to what's gonna work for you, but for people that like routines, set up, set aside a time, just like you set aside time for meditation, set aside a time with the, the stakeholders. In your financial life. So it might be a spouse for example, and have, monthly, weekly, whatever works for you.
Sit down meetings where you actually go over what is actually going on. Just like a self assessment, just like you would do in medicine or whatever it may be. And go over where are we right now, where do we wanna be? What's going what's going, not as right as we would like and have those conversations.
One of the hardest things with money I find is. We might be married to somebody who has very different ideas about financial priorities, and that's something that we all face challenges in and it can ebb and flow, but you have to make those compromises and you also have to be very deliberate in who is going to be the buck stops your person.
In my marriage, it's me. I'm the one that makes sure every bill gets paid. There's a couple of things he likes to pay, for some reason he likes to pay the car insurance. I don't know why, but he gets that bill and he just still pays it. But basically I pay everything else. I think maybe it's cuz like he just, he's attached to the car and he thinks I'll take away the car cuz we live in New York City.
That's a car. He insist we do. But anyway, but I've, given, I give him, that's fine. I've given into him. We have the car, we're keeping it. But for the most part, I'm the one that does it. He knows where everything is. I encourage him to know as much as he wants to know, but at the end of the, someone's doing it.
In other words, you don't want things slipping through the cracks. Oh, I thought you were doing the mortgage. Oh, I thought you were, know who's doing it and have accountability and understand that is part, it's a job. You're basically the CFO of your family, and it does take time. It does.
I have friends that, they pay bills the, the second Saturday of every month, whatever it is. So if you are a routine person, set up systems that work for you, just like you would in any other area of your life. If it works for you to color code and have, I still like to have folders where I print things.
I have every year I have a box and I like my folders and I'll get different color folders and I like to know which are, I put expenses related to our apartment, expenses related to each child, things like that, because that's how my brain works. Some people can do the whole thing electronically.
Your system is gonna be what works for you.
[00:47:00] Hunter: Okay, Bobby, I'm gonna commit to your listener. I'm gonna commit to making a monthly. Financial grown up meeting with my husband. We worked hard to make sure he only has to work four days a week. So on one of those Fridays every month in the afternoon, we're gonna have a meeting.
[00:47:19] Bobbi Rebell: And I would definitely schedule a reward after, for afterwards. If you're gonna do that, be like, yes. And then we drink wine or whatever it may be that you guys love to do. So you should celebrate, and go over goals. And it's just important, most of all, especially if you are not making decisions alone, if there's other stakeholders in your family other adults, if you have a partner that you communicate and that you have a system where you have some autonomy.
With spending, but also that you have an understanding of when you do check in with each other before making a big purchase. So some people, for example, might say anything under $250 you can just buy. But if it's gonna be something over 250, let's always discuss it. That kind of thing. Or you may say, we're gonna put all of our family expenses on this one credit card cause we wanna consolidate all of our points because we wanna go on vacation with points.
So let's decide we're gonna put everything on this card together. Make plans together and you can almost make a game out of it of how you're gonna reach those goals and that kind of thing. So it's. It sounds, it sounds like a chore, but really, I promise Hunter, you can make it fun and you can celebrate and do cool things with the whole idea of communicating about money with your partner.
And by the way, one thing that's interesting that happened in the Pandemic and I really focus on older kids is that a lot of the older kids came back to live with their parents as adults and the relationships evolved and the kids started either overhearing or participating in a lot of conversations about money with their parents, and that really strengthened a lot of relationships and helped them evolve in a wonderful way where younger people had a much better understanding of why their parents were stressed out about money growing up, or why they're focused about this, or, people have.
Behaviors tie to how they feel about money. It's very emotional for people. It also gave parents a big appreciation of the financial challenges and the career challenges that face younger people these days, which are very different from the ones that we faced. Many of them don't have jobs where they go to, where they feel like they have a second family.
When I started work, my first job was at cnbc. That became, to some degree, my social life. It became my post-college friendships. I developed mentor mentors there that I've kept in touch with, and so a lot of younger people, if they're in the gig economy or they're working remotely, they don't have that support system, and so it's important for us to understand that they are evolving as adults very differently as well.
[00:49:52] Hunter: Yeah. Yeah. We don't wanna make any assumptions. That curiosity, right? Like that open lines of communication is like a thread kind of weaving through this whole thing. Bobby, thank you so much. Everyone go out and get launching financial grownups. I'm gonna be going and getting my coffee. , it's about helping your almost adult kids become everyday money smart.
Thank you so much for sharing your expertise and your time with us, Bobby I know that some of us might have to go back and re-listen and say, what was that ETF or that Q and all of those questions, but I really appreciate you sharing sharing your time and what you've learned with us here today.
So where can people. Find out more about what you're doing.
[00:50:36] Bobbi Rebell: First of all, hunter, thank you so much. And I wanna thank you because I learned so much from you on all of your podcast episodes. I feel like I learned so much from you, even just talking to you here today. So the first things is to you and thank you to your audience for listening.
You can learn really everything you need to know by just coming to my website, which is just my name. So it's bobby rebel.com, b o b i r e b e l l.com. If you. Buy the book. Thank you. Thank you. Thank you for that, first of all, and please leave a review on Amazon and let people know about the book.
I really appreciate the support. I appreciate the interest. This is a labor of love for me. As I said, I wrote this because I needed it, and I'm always learning. I'm always. Facing new challenges where I don't have the answer myself. And I was very fortunate to have an incredible group of experts that are in the book that we all can learn from.
And it's been a wonderful journey and I look forward to learning more. And I look forward to hearing from your audience any feedback they have on the book. So be in touch on all the socials. For the most part, it's just my name, I think on Instagram is the only exception, which is Bobby Rebel and the number one.
So please be in touch with me and thank you so much.
[00:51:47] Hunter: Thank you. It's been really a pleasure.
What an awesome conversation, right? We need to know this, right? Managing money is a basic life skill that teens need and we need to be, I love how she says we should be open and transparent and so important If. Enjoyed this episode. Please do me a favor, share it on your Instagram stories and tag me in it at Mindful Mama mentor and leave a rating and review on Apple Podcast that makes the biggest difference in the world.
And I greatly appreciate it. And man, we're coming up on the holidays. I hope you're doing well. I'm currently, as I record this, like still on crutches from pulling or tearing my calf muscle. So I'm on, but so much more than I would like to be and so you can walk currently. Just appreciate it. That's all I ask.
Appreciate your ability to walk, man. So frustrating not to be able to go for a walk. Sometimes I like to think about I don't have an e ache right now. Like I can see, I can to have gratitude for these things that are seemingly small things, right? And. You know that we don't ever pay attention to.
Like I right now, like I have both arms. I have both legs, which I do actually, I should pay attention to that. But anyway, this is an invitation for you if you can walk right now to appreciate that , because I ain't having for all of us. So yeah. I hope you're doing my friend. Thank you. Thank you so much for listening.
Thank you for being here to the end of this episode and hanging with me and I really appreciate it. I appreciate this tribe more than. Imagine so anyway, thank you and I wish you a beautiful week. I wish you well. Wish you ease, wish you peace. I hope you don't stress out too much going into the holidays, and I will be right back at you next week.
Thank you so much for listening, and I must.
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