A highlight from 96: How Do I Raise Financially Responsible Kids? Special Guest Bobbi Rebell


Your daily life. If you take your children with you to do whatever you're doing, even as toddlers, you can point out to them. Gee, we have a choice between two things. What should we use to decide which product we buy at the store? And if they say the one with a prettier picture, you can point out, that's fine. It may cost more on my cost less, you might discuss that. You might say, we can pay more because we really value the fancy picture on it. That's okay. As long as you help them understand that it's a proactive choice at the most basic level. But start them early and integrate it. So it's not a separate conversation. It's just part of life. And we'll stress them out. That's great. You know, Bobby, I was so we were so excited to have you because with the holidays coming, it's always hard to get your kids to understand I feel the value of money when they're getting tons of stuff and sometimes expensive things for free. When they're not really paying for it, how do you get kids to appreciate the value of things, especially around the holidays? This is such an excellent question. And I think it's important that we be discussing it because it is universal, no matter what income level you're at, no matter what's going on with your family, you want your children to be appreciative and grateful for what they have and to understand the value of money. And it can actually be a wonderful time to teach them those lessons. And part of it is actually having conversations about what you're going to be buying for, not necessarily their gifts, but the kinds of gifts that you're going to be giving to other people and have them maybe think about what gives they want to give to other people and the meeting behind those gifts and they don't always have to be purchased gifts. gifts that they make if they're maybe if they're young children so that they're putting in their labor and their love, it can also be active things that they're doing so that they understand the gifts don't have to be a material object that they can be giving of time, giving of being thoughtful, being considerate, and maybe homemade things are also great as well. So as long as they understand that it's about giving, not about items. I think that's a good lesson to give them. Great lesson. One of the questions we got over and over again in our inbox for you was on the subject of allowances, you know, should you give them kind of curious about allowances to does it really teach financial literacy and do you think they're worth doing? I'm a little skeptical about them. I like that you're skeptical. I'm a little skeptical too, and I can take both sides. So I think it's really important that this be considered as a potential tool for a child. Here's what has to happen. It has to be the right child in the right stage of their life, and it has to be well executed. Among all family members, what happens sometimes is you have an idea of allowance and one parent is very strict. And the other parent is kind of slipping the kid money here and there, and the grandparents are doing things. And it doesn't really stick if it's not consistent with everyone that impacts the child's universe. The other wrinkle that I've encountered. I've had successfully allowance with some kids. I have three kids, and not so much success with one kid in particular, is that if the child doesn't necessarily have a financial goal. For example, I'll put it out there. He was a young teenager at the beginning of the pandemic. He was turning 13. He was stuck at home. My son really had no interest in earning money in an allowance. There was no thing that he wanted to buy. So what I made the mistake of doing, and I'll be honest, it was a mistake was trying to tie along with two things like making his bed. Well, he made the choice. He did not value making his bed enough to get the he didn't value the allowance enough to make his bed. So what I had was a kid who had a perfectly good excuse not to make his bed. Because he made the choice, right? He said, no problem. I'm good. I don't need the allowance. I choose not to make my bed. He was very empowered by that. On the other hand, I didn't tie some he had some family responsibilities like he has to take out the garbage. Well, I didn't tie that to allowance. And you know what? He took out the garbage every time it was full, and we asked him to take out the garbage. He took it out because it wasn't tied to anything. It was just part of his job as a member of the family to take out the garbage. So for that child, it was best to not tie money to doing specific chores or tasks around the house or certain grades. But every child is different and is going to respond differently and in different seasons of their life. So you really have to weigh what's going on with your child in that season of their life. And how well will whatever the parameters you set up, how will that be adhered to by the different people that are involved in that child's life? Love it. Love it. Here's another question. A parent asked, how do I get my child to save and not ask me for money? What about older teens? Things like coffee, food, spending, you know, it's social, it gets expensive. How do I get my child to take responsibility for paying for these things? This is an easier question. Stop paying for them. Where should the money come? That's it. Where should the money come from? Yeah. When they ask for it, ask them right back. Well, where are you going to get the money? And what are the options? And see what they say? So in terms of where kids get money, what do you think the choices parents should be running down with them? It might be. Well, they could choose if they choose to have an allowance going back to our previous question. That could work, but then they're proactively choosing that. And they're going to have to stick to those parameters, whatever rules you set in place. You can set that up because they are now goal oriented. They want the money. You could also, if it's age appropriate, have them do a job if they're younger, they could babysit. They could do chores for other neighbors. I've had kids that I know of that are doing gardening landscaping type things. You know, mowing the lawn or more not necessarily with machinery, but you know what I mean? You know, raking leaves, whatever it may be, cleanups, snowplow, that kind of stuff. Whatever is appropriate, my oldest, she was a lifeguard. She learned and she gradually, she was so smart, she gradually got different levels of accomplishment. I don't know the right terminology when you're a lifeguard.

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