“Working to help parents raise money-smart kids.”
Hello, friends!
Last week’s email skewed a bit young, so this week I thought I’d make it up to readers with (almost) adult children who are close to or already in the “real world.”
On my most recent podcast, I had the privilege of interviewing money maven Bobbi Rebell. Her new book, Launching Financial Grownups: Live Your Richest Life by Helping Your (Almost) Adult Kids Become Everyday Money Smart, served as the foundation for our discussion.
I hope you find this newsletter’s “3 Ideas,” all video highlights from my conversation with Bobbi, both share- and save-worthy.
Of course, I think this information is plenty relevant for those of you with younger kids. And who knows … It just might give you a heads up regarding where your money-smart journeys can take you. 😉
— 1 —
401(ok): During her episode of The Art of Allowance Podcast, Bobbi delivers two important messages:
First, a 401(k) is not an investment. Rather, it is a tax-advantaged “bucket” into which our kids put money to be invested. 🤯
Let’s put it another way: Imagine we receive a delivery of sod to be planted. The piles of sod are like our money in a 401(k).
Only when we lay the sod will our lawns grow. Similarly, only when we lay our money into the available mutual funds, ETFs or stocks will our portfolios grow. And just as we’d enlist help to lay sod, our kids may need our help with this process.
Second, though I often talk about the importance of giving our kids some autonomy with their money — and we certainly want them to invest actively on their own — we should realize that their brains may not be as future-focused as ours and that they might need our help here.
— 2 —
Don’t Leave It to the Schools: I agree with Bobbi that we want our schools to do more when it comes to improving financial literacy. And in fact, progress is being made bringing money smarts to more classrooms thanks to organizations like Pockets Change and Your Money Vehicle. But we don’t want to rely on schools to teach our kids personal finance.
Bobbi’s framing of this issue is helpful:
Wanting more? I underscore Bobbi’s point about money-smart learning in my recent essay, “No Single Point of Failure.”
In short, make sure all your bases are covered. ⚾
— 3 —
“Skin in the Game”: I really like Bobbi’s novel concept of the “family ecosystem.”
On our journeys to raise strong, independent and money-smart kids, we shouldn’t lose site of money-saving opportunities in service of autonomy. So if we can add our kids to a family plan that saves them money instead of having them purchase a more costly subscription on their own, then why not do it? 🤷🏻♂️
Of course, we should make sure they still have “financial skin in the game,” as Bobbi explains in this video:
We probably shouldn’t push too hard here, though, as the autonomy our kids seek might be worth a few extra bucks. We just want to give them options.
We’re all on a journey. Let’s try and enjoy it.
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.
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