“Working to help parents raise money-smart kids.”
Hello, friends!
I’m excited to share a new Art of Allowance podcast episode with you this week.
I took some time to reflect on my first fifty episodes in the hopes of bringing you even more useful content. To that end, I will continue to speak with financial experts and parents (And sometimes both!) to emphasize fundamental concepts and to uncover new ideas.
Going forward, though, I plan to have shorter conversations while cultivating the quality of my questions. I’m quite fortunate to attract great guests, so I want their insights to shine.
Also, the more I explore this world of raising money-smart kids, the more I become aware of the differences among family dynamics. So my goal is to bring you ideas from which you can choose to fit within your particular family’s framework.
And despite our families’ differences, there are some foundational aspects of money I will still emphasize, for they serve as the bedrock for all our journeys:
- Setting and saving for goals
- Making money-smart choices
- Distinguishing between needs and wants
- Living beneath our means
- Finding value in compound interest
Of course, you may find, like I have, that these podcast discussions can inspire you to update your own behaviors around money.
Which brings me to my latest guest! I’m thrilled to be back in the host seat with an enlightening episode featuring Kirk Drake, a serial entrepreneur and credit union maverick whose family’s focus is on raising business-minded, ownership-oriented kids.
This week’s “3 Ideas to Share & Save” includes my top takeaways from our conversation.
— 1 —
Ownership Matters: Kirk has a strong entrepreneurial lineage. In fact, one of his grandfathers gave him some early sage advice: “Whatever you work on, own a piece.”
To Kirk’s credit, he listened and learned. Kirk took his grandfather’s guidance to heart and has since built many different businesses in the credit union space, including CU 2.0, CU Wallet and Ongoing Operations.
Therefore, a good chunk of my discussion with Kirk centers on how he is trying to foster the same entrepreneurial spirit and “hustle” in his kids that he’s had since he was young.
But Kirk understands this task is not easy. In his family, the entrepreneurial gene seemed to skip a generation, as his parents lacked that same drive. Even though Kirk’s dad did pass along good advice by telling him to save ten to twenty percent of his earnings, neither of his parents were strong entrepreneurial models.
Despite these challenges, Kirk is to entrepreneurship what Emeril Lagasse is to cooking. So when he decided to help his kids with the tried-and-true lemonade stand, he really “kicked it up a notch.” And in a story reminiscent of the one podcast guest Brad Klontz shares about his son’s investing wins, success here also came with a downside.
To that point, and in keeping with a theme that we address frequently in this newsletter, Kirk underscores the importance of letting our kids learn through their own experiences:
“The second you transfer over or take over the project to try to risk-proof it, you now have ownership for it. It’s not their thing anymore. And it’s far more important that they own it and they have the adventure and they have the failure and they have the iteration, than it is that they get it right the first time.”
— 2 —
Kirk’s Share Jar: When teenage Kirk took a six-week-long trip, he ended up running out of food money. Kirk’s a “big guy” (His words, not mine!), so it’s not surprising that his food stipend didn’t last as long as that of some of his travel companions.
What is surprising is that when Kirk asked his parents for extra money, they responded they didn’t have any to send him. So he was forced to spend the rest of the trip using what has now become his trademark “hustle,” figuring out ways to convince his friends to help out with a burger here and some fries there.
As you can imagine, this experience was formative for Kirk. Since he knew firsthand how embarrassing it was to have to ask peers for charity, he told his kids that he would never question a decision to help someone out with a few bucks, for example, in the school lunch line.
You might pair this advice with the Share jar in your family’s allowance program. Having money set aside makes it much easier for your kids to give generously, as you’ve simplified the opportunity cost calculation for them at the moment of decision. Share jar money cannot be used for the video game they desperately want to buy. Rather, it is there for just this type of charitable opportunity.
— 3 —
Not Equal, But Fair: If there’s one thing all parents discover, it’s that our kids are very different, despite our best efforts to raise them similarly.
So when Kirk initially tried to heed his mom’s advice to treat his kids equally, he became frustrated. What might work for two of his three children wouldn’t work for the third. Kirk soon realized that because his kids each have different relationships with money, he and his wife can’t deploy lessons equally.
For example, since Kirk’s son isn’t incentivized by money or possessions at this point in his life, saving for goals isn’t likely to be motivational. On the other hand, his daughter makes and spends money in a fairly fluid fashion. So having her set monetary goals can be a useful strategy to keep her spending in check. (To hear Kirk explain his kids’ different money personalities in more detail, tune in to the podcast at 25:31.)
As Kirk helps demonstrate, an overriding value of The Art of Allowance Project is that there is no “one size fits all” approach to raising money-smart kids. One of my goals in this newsletter is to share different ideas with you to let you decide which ones will work to ensure your family’s money-smart journey is that much better.
So whatever you choose to do with the ideas in this, past or future newsletters, please make sure to enjoy the journey!
John, Chief Mammal
P.S. Please consult with a financial or investment professional before engaging in any decisions that might affect your own financial well-being.
Like what you just read? You can sign up for the newsletter here.