Ep. 107: Teaching Kids About Money
The X's and O's
In this episode of the Retirement Plan Playbook, financial planners Matthew Theal and Joshua Winterswyk from Evermont Wealth discuss the importance of teaching children about money.
They provide practical tips for instilling financial literacy at different ages—from toddlers to adult children.
The episode also touches on current market events, including the implications of a recent software crash by CrowdStrike and rising past due credit card balances.
The hosts emphasize the importance of building emergency funds, understanding credit, and starting retirement savings early. Additionally, they recommend watching the Olympics Gold Zone and a trip back to the movies with 'Twisters.'
00:00 Catch-Up and Personal Updates
01:19 Introduction to the Retirement Plan Playbook
02:17 Teaching Kids About Money
03:32 Olympics
05:06 CrowdStrike Incident
08:28 Credit Card Balances and Economic Concerns
09:54 Stock Market Update and Political Uncertainty
12:53 Financial Literacy for Kids
18:44 Teaching Kids About Money: Allowance and Savings
19:03 Bank Visits and Financial Literacy for Preteens
20:41 Understanding Credit and Taxes for Teens
23:54 Gamifying Financial Education for Kids
26:21 Financial Planning for Adult Children
31:44 Saving and Retirement Planning
35:07 Evermont Recommends: Entertainment and More
Connect With Evermont Wealth:
Transcript
Matthew: Josh, it's been a while. Welcome back.
Josh: Yes, I am back took some time off. It was nice we welcomed our New addition to our family. My wife had a little baby girl and yeah I really enjoyed the time bonding with her at home a lot different the second time around though. I bet Yeah, it's it's a lot different chasing a toddler and then taking care of a newborn
Matthew: You're also not afraid of the newborn.
I feel like with the first kid you're afraid of a newborn. Totally
Josh: Yeah, every little thing you're on edge with the first newborn this one. It's a it's been a little better Yeah, but yeah, we're happy Mom and baby are now doing really good and Yeah, she's gonna be almost two months already. It's gone by fast.
Matthew: Well, that's good to hear. We missed you on the show you haven't heard brent's voice. He's in hawaii is on a little vacation So brent's not on today. I heard brent didn't miss me that much No, he missed you and then you know You're one of our more popular clients like you they love your personality and then you're also the most popular guy on our instagram content
Josh: No, can't be.
Matthew: Yeah. You and Paulina, you guys get the most views. Well,
Josh: I hope I can bring a good energy today and to the videos as well.
Matthew: Yeah. Yeah, totally. All right. Should we get the show started? Sounds good. Let's get started.
Welcome to the Retirement Plan Playbook hosted by Brent Pasqua, Matthew Theal, and Joshua Winterswyk of Evermont Wealth. This podcast dives deep into investment strategies, retirement planning, and current events, equipping you with the insights needed to craft a robust retirement playbook adaptable to any political or economic climate.
Join Brent, Matthew, and Joshua as they guide you through the complexities of retirement planning. Offering expert advice. to tackle challenges and the later stages of your journey. It's time to build your optimal retirement playbook. Now let's dive into today's episode.
Matthew: All right, here we go. Welcome to the retirement plan playbook. I'm Matthew Theal certified financial planner at Evermont wealth.
And I'm joined by Joshua Winterswyk, who's also a certified financial planner at Evermont wealth. Today we have a super exciting show on deck. We are going to be talking about how to teach your kids about money. I think this is an important Topic we have a lot of our clients who don't actually ask this very specific question But they do, you know, come to us and say, Hey, like, you know, I have a 30 year old you know, granddaughter or a 30 year old daughter.
She doesn't know much about money. Like we want you to teach her about saving. But so we're going to get into that today. Josh, you excited?
Josh: Yeah, I am. I think the one question that more of what we get is like, should I open a 529 plan? Right. And like, that's a great question. And that's a good kind of start.
So the conversation, but I think the show will do a good job of also, how do I even just speak to my kids about money? Right, right. Totally.
Matthew: And I think it's important too, because you know, the one topic they don't teach in school, they teach all these pointless topics, right? But they don't teach you how to actually manage money like personal finances.
They don't teach that in school. It's wild that they
Josh: don't.
Matthew: And they don't teach you how to start a business or anything on how to make money.
Josh: Or taxes
Matthew: and no taxes. None of that. It's not taught in school. They teach you they teach you about cursive and His I haven't
Josh: used cursive and I don't know News flash nobody uses cursive.
I don't even I don't even know if I remember how to use curse it So yeah, this show should be good But have you been watching the Olympics? I have. Yeah, I really enjoyed the Olympics. It actually reminds me of my grandparents. They've always, they always loved the Olympics. And I'm still talking to my grandma about the, the, this Olympics, but yeah, my wife and I are watching it.
I watched the women's gymnastics final. That was pretty cool. I fell asleep. Did you?
Matthew: Yeah, well, you know, the disappointing thing is it's just with the time zone. I already knew what happened. Mm hmm. Yeah, you can't get away from seeing the Women's gymnastics if you're online.
Josh: You're too connected now.
Yeah, it's
Matthew: everywhere and they're so popular So I and they also delayed it. I don't know if you notice that too like they're drag I think that did they drag it out the full three hour broadcast?
Josh: Yeah.
Matthew: Yeah.
Josh: Yeah.
Matthew: I go to bed at 10.
Josh: And then it was like really kind of strange because then at the end, they like cut it real quick.
Like they won and then they cut to like, they were already in their track suits and with their medals and being interviewed. Hmm.
Matthew: That's disappointing. I kind of wish I just watched the full thing live at the office so I could see it because you know, it's always cool to see your country win gold.
Josh: Yeah, and I like it. I'll continue to watch it. It's been fun so far. I think Basketball games coming up soon.
Matthew: Yeah, we got basketball soccer's going Have you been watching gold zone or is it gold zone gold zone?
Josh: You told me about gold zone. Yeah on peacock, right? Yeah, that is really cool. That was a really good.
That'll be my recommends. There we go
Matthew: All right, we'll save that for the end so listeners you gotta You guys stay in for the whole pod if you want to hear what the gold zone is. All right, let's get in the hot take headlines. CrowdStrike, a data security company released a software update that interacted negatively with the windows operating system.
This led to widespread computer crashes, disruptions. It knocked down banks, it knocked down airlines, it knocked down Hospitals and since this disruption, I don't even believe it's fixed yet. And this is where I think we're about two weeks into it. CrowdStrike stock has crashed down 40%. Wow.
Yeah, big move. Josh, what do you think about this? Kind of scary that one company could knock, you know, most of the Windows computers offline.
Josh: Yeah, I, I think that, Just this single software and it failing just how massive a problem it created for businesses around the world. You know, these events highlight the need for companies to really kind of making sure they have a disaster plan.
I think Delta lost half a billion dollars.
Matthew: Yeah, they said they canceled 4, 000 flights. Wow. And now they're suing CrowdStrike.
Josh: And I mean, technology is awesome, right? We, we all use it, but this just shows also the risk of technology for businesses and, and, you know, things can go wrong. Luckily they don't happen that often.
Like this is why this is a big story because this hasn't happened a bunch of times. But you know, stock price shows that this is a huge mistake from CrowdStrike.
Matthew: Totally. And I think it's important to I think there's an investing lesson here. And this is why I want to talk about this on the show is the day of the crash, the stock was only down 10%.
It's down an additional 30 percent as you see the ramifications kind of come in, right? The domino effect.
Josh: Yeah.
Matthew: And when you're an individual investor, and I know there's a lot of individual investors who listen to this show. And you get bad news on a company you're invested in like this from what I've seen in, you know, my investing career, the best thing is to cut it right away.
Stop the bleeding. Stop the bleeding. Exactly.
Josh: But most investors don't do that.
Matthew: They don't. There's people holding onto it, still hoping. I mean, I hear all the CNBC guys being like, Oh, you got to buy it here. You got to buy it here. Kramer keeps trying to call bottom. It just keeps going lower.
Josh: Yeah, I mean, cause the story's not over.
The problem's not
Matthew: even fixed. No, the lawsuits are having been start a barely started yet.
Josh: Yeah. I was reading a little bit about the lawsuits too. It looks like they have a lot of, you know, agreements through their service contracts that might protect them a little bit, but that's still going to be significant.
That hasn't even happened
Matthew: yet. Yeah. I mean, they'll be tied up in litigations for years over this. I would imagine they start to really bleed business. I know Elon Musk said that he was removing CrowdStrike from all of his companies and he has like 5 billion companies. Yeah. So I mean,
Josh: those are going to be huge contracts lost even outside of the litigation.
One other, one other comment to this too is on the investing side. Like you said, there's a, there's a lesson to be learned. This was like a hot stock. Yeah, this wasn't like a stock that you know, no one was paying attention to this was a hot buy stock for a lot of people so this just shows you one event can really change the course If you know you had all of your eggs in the crowd strike basket
Matthew: Yeah, you know diversification if you're going to own stocks at least own, you know Five to ten and you know don't have a big portion of your portfolio in one One company.
Totally. All right. Let's talk about credit card balances. Have you seen the recent news that the share of past due credit card balances has risen, risen to the highest level since 2012? This is as according to the federal reserve bank. This isn't good news, right? Props
Josh: to us. We've been talking about this for a while.
Yeah, credit card balances have been going up and up and up this isn't to me. This isn't a new story I know it's in the headlines now because it's getting worse But when you have balances continuing to increase and interest rates continuing to either stay the same or increase You're going to run into this problem.
And it's something that we've talked about on previous podcasts and this isn't good news this isn't good news for americans. This isn't good news for You Kind of the, the economy overall.
Matthew: Yeah. I think it's just one of those signs that's showing like, Hey, there's a certain segment of the economy that's really hurting right now.
And you know, they spent through all their, the government stimulus they got during Corona virus. And now they're starting to resort back to credit cards. Cause the one thing with giving people money is they get used to spending it. And lifestyle creep. Yep. And you can't, you're not going to turn it off.
You're just going to put it on a credit card or a Klarna or, or whatever. One of those pay it later apps.
Josh: Yep. And in I mean, this is also a result of inflation,
Matthew: right? Absolutely so yeah, I think we'll keep monitoring that and the job market for some weakness in the economy But let's move on to the next one.
Sounds good
Josh: Well, we have had a lot of questions about kind of what's happened recently in the stock market and matt I wanted to ask you give us a give us a good update
Matthew: Yeah, so we had a lot of clients, you know riding in because, you know, the drop wasn't that bad last week in the stock market. I think it was about 5%, which is, you know, a hundred percent normal.
We see those every year. However, we had about nine straight months up returns on the market, right? Basically from October of last year through getting used to it. Yeah, July, everybody was making money. People are getting happy but the number one thing the stock market doesn't like and i've talked about a lot on the show is the word uncertainty Whenever there's uncertainty, it gets what we call priced in.
So that makes stocks usually drop. And that's what happened in the market. So let's look back at really what's happened in the past two to three weeks. There was an attempted assassination of the Republican presidential candidate, Donald Trump. About 10 days later, Joe Biden announced he was dropping out of the presidential race, right?
So now we have a little uncertainty on the presidency
Josh: and nervousness, right? Those are two big stories, massive stories,
Matthew: absolutely massive. And then without a primary, without letting anybody just on the democratic party, like pick the delegates came in and all put their votes behind Kamala Harris. So now it looks like she's on, on target to be the nominee for the democratic party.
And here's the problem with that. Nobody knows her agenda,
Josh: right? More uncertainty,
Matthew: right? And if you go back and you look at her track record and some of the things she said when she was previously running for president in 2020 is she was very socialist and that creates that uncertainty effect. And you know, as podcast, we've still heard really no agenda out of her.
Josh: Yeah, that's going to create a lot of. Market uncertainty, uncertainty and nervousness in general. And you piggyback that with still the persistent inflation that's around global issues. Some of this week economic data, like we just talked about credit cards and that's setting up for a little bit of a drop in the market.
Yeah.
Matthew: And I honestly, I wouldn't be surprised if, you know, this continues for maybe the rest of the summer until we get some clarity on the election. As this shakes out, we had a really good idea. On what was going to happen prior to a few weeks ago. It looked like Trump was setting up to win by a landslide.
And it's, it's regressing to the mean. Yeah. And now it's the race is closed and the democratic candidate hasn't really said her policies. Yeah. You know what?
Josh: It probably happens here. This is just a, my opinion, but. Normally what we see from election years is a lot of good growth comes at the end of the year.
This year it came from the beginning of the year So it's probably now for the for the rest of the year shaking up as if there is still growth in this market Maybe it more happens towards that end of the year when we have some more answers from all of those questions You just brought up.
Matthew: Yeah, absolutely.
So we'll keep monitoring it for clients you know, I would say no reason to make adjustments. We always expect pullbacks to happen Yep, absolutely. All right. Let's get into the retirement planning corner. So like I said, at the beginning of the show today, we're going to talk about how you could teach your kids about money and instill those good financial habits from a young age.
Our goal with the show is we're going to try and cover, you know, every age from when they're very little up until when they're adult children. And I think financial literacy is a, is a crucial life skill that you could really help set your kids up for long term success if you teach them the proper steps.
And there's this taboo in America, right Josh, where people don't want to teach their kids about money.
Josh: Yeah, I think communication, right, that's the word that comes to my mind. It's like, if we communicate more about finances with, Our children, you know, the more, you know, the more education, the more you're going to be able to develop this skill that we just talked about, isn't taught in schools.
It's going to set kids and the next generation up for a lot of success. And that's what we want, right? I mean, that's the ultimate goal is we want the best for our kids. So why aren't we talking about this more?
Matthew: Yeah, absolutely. It should be talked about more. So let's, let's talk about what we're going to get into today.
So we're, we're going to go through the importance of teaching kids about money. We have practical tips for every age group and then some fun tools and activities you could do with your kids to help set them up for success. And then finally, if you have, you know, those adult children who are kind of still hanging around the house, and I know some people on there, I'm sure they have them still.
How can you set them up for some success if they haven't saved anything they have the student loans credit card debt and they're They're still hanging out in the bedroom upstairs and you want them out. We get a lot of
Josh: that question Yeah, totally in our office and I think that again, you know, if you want to avoid that let's start earlier with the financial education.
Matthew: Yeah all right. So josh tell us about why it's important to teach kids about money Yeah
Josh: Like we just talked about, I mean, this is a basic life skill. We all discuss finances in one way or another, if it's with our spouse, with our neighbor, with our family, with our coworkers I have a, like a quick story.
I remember I had to have like a quick outpatient a surgery. I broke my nose and I won't fight. No, no, I was playing soccer. And I had to get my nose fixed. So I woke up from, you know, my anesthesia and I could hear the doctor and two of the nurses talking about 401k and the doctor was saying, you know, you should do this.
You should do that. There was a lot of like opinions and recommendations going on in this little huddle and it's all around us, right? It's everywhere that conversation. So it just, it stuck out in my mind on that story. So we know that. It is a part of our lives that we need to educate our children on this because we don't want them, you know, embedded with bad habits and bad information from an early age.
So really, you know, getting the basics, how to save money. How to spend wisely the value of money and the basics of investing is really, you know This core that we want to instill in our children.
Matthew: Yeah, absolutely And so the way I learned I don't know how your parents taught you but my dad, He saw I kind of took an interest in the stock market around 15 16 And he played like a stock market game with me where I I did like a play portfolio and then he gave me some money after I Showed I was semi responsible and he let me You Invest it.
So that was pretty helpful, but I still never learned, you know, the budgeting, the cashflow management. I learned about the stock market and investing, but not anything else.
Josh: What helped me to be honest is I got a job at 15 and a half. So I got a paycheck. Yeah. Where was your first job? Vince's spaghetti.
Ooh, slang and spaghetti. Nice. Yes. Yes. I started there. My mom told me. I came home. I think I came home from school one day. She's like, Hey, I got you a job. You start next week. I said, I didn't know I was looking for a job. Thank you. But I, I really appreciated that because from an, you know, pretty early age you know, I received a paycheck.
And I understood that there was taxes, right? What I was earning wasn't everything I was receiving. I had to open, I had to have a bank account. I had to have a debit card, a checkbook. So just with like the practical implication of, you know, working, That really taught me a lot and it really caught my interest.
I wanted to learn more about money. So it kind of sparked me being more interested in finances just by getting a job.
Matthew: Yeah. So I guess going on both of our stories, it sounds like it happened right around 1516 when our parents started talking to us about money. Mm
Josh: hmm.
Matthew: Yeah, and I don't
Josh: remember if it was like before that but that's probably when it was for me.
Matthew: Same here I don't remember either. All right. Well, let's get into it. If your kids are a different age So when you're looking at your children If they're around age three to five, I think that's when they start to pick up the basic concepts My daughter's almost four right now and she's starting to learn a little bit about money.
She has a piggy bank That she puts some money in The one thing she's trying to buy right now is a house in our neighborhood, which is kind of funny. But every time she sees, she understands that there's a home for sale. Like she sees the sign and she says, Oh, I want to buy that. So I could live next to mom and dad when I'm older.
Josh: Ah, that's a good goal. Yeah.
Matthew: So it's kind of funny, but you know, at this age, that three to five age, you're just trying to introduce basic concepts, get them a little piggy bank. Maybe they get some coins or some bills put that money in there. And you're, you're just trying to teach how savings works.
Josh: Yeah. Take, take the time to show, you know, you go to the store, right. And you have to pay for something, taking the time to explain that to them. Right. And like you said, showing them coins, showing them bills and showing them the value, I think it's a really good start. Now for jumping ahead to kind of age six to 10, maybe you want to start giving them an allowance.
Right. Doing chores around the house, giving them the option, right. Of what to do with that money when they receive it, should they spend it, should they save it? And using even some of the apps, there are a lot of financial educational apps that are out there for now, this age that you can start to teach them so they can learn.
Matthew: Yeah allowance, that's a good one So once they get through that stage they get to up to 11 to 15 that are hitting those preteen or teenage years I'm sure they're gonna be giving you a lot of trouble in their personal life at that stage But from a money standpoint This is probably when you want to go down the bank and open that savings account start putting money in like our parents Did for us
Josh: I think like thinking about this more like we don't go to the bank as much anymore That's all online, right?
Like, and we use a lot of the debit card stuff. I think though, like with my children as well, and when they get to that age is taking them to the bank. Right. Like, and you can have an Upma account for them that's in their name, that they can even start depositing money from a very early age when they understand.
But showing them, you know, this is an ATM, this is where we pull out, we can pull out real money taking to them, to the bank to deposit money or maybe even withdraw just as an exercise, right? Because they, again, you know, some kids might not ever go into a bank if you're not like actively trying to teach them.
Right, because I barely go into the bank.
Matthew: Yeah, that's a good place to take your kids too because the banks are professional You know, they're kind of dim lit. It's quiet The the tellers and the bank managers usually dress professional. So that's a professional environment. That's really good tip
Josh: And I remember as a kid I would like I wanted a deposit slip and I would like Writing on it and stuff like that.
So I think it's a good place to kind of continue to teach and make sure you still are instilling in them that this is a place of, you know, money and finance. And this is where they go to do that.
Matthew: Yeah. And then what about ages 16 to 18 once they're, you know, pretty much on their way, college bound, what, what are the tips there?
Josh: I always start with. Credit because that's something that's really important, especially with my banking background. Like what is a credit card? What is credit? How did we buy this house? Right? We borrowed money. What exploring those concepts with your children and not being so taboo, like you said, you know, maybe even sharing your personal experiences and this could even be from like a grandparent.
Like this doesn't even have to be from a, a parent. You could even say, you know, share with Your parents, if it is a grandparent, Hey, will you share some of your financial stories and lessons with our children? Again, opening up that communication, especially at this age where their minds are just like really spongy and you know, they're really starting to think about adulthood.
But yeah, credit cards, credit mortgage, and then even starting with taxes, right? Cause at 15 and a half 16, you can get a job and they need to understand taxes as well.
Matthew: Yeah. And then usually at this age is when you want the car, hopefully. And so then, you know, how's the car game purchase? Like you said, is there a loan or is mom and dad giving them an old one?
I think that's actually a pretty popular strategy. And also
Josh: using apps. I mean, this is our society now, right? It's technology. And so starting maybe a budgeting app or something to track the money that they're receiving that they have to check once a month, maybe even implementing a money day once a month, or we kind of discuss our household finances and explaining it to the children and going over their finances as well.
I think those are all good things to do to, you know, explore this financial education.
Matthew: Yep, absolutely. And don't forget, you know, the investing angle either. If they're working, you could probably help them set up a retirement account to start saving or just set them up like a or a brokerage account and, you know, start, you know, selecting some individual stocks.
Josh: I'll say this too. You did a video on this. But everyone's talking about Roth IRAs for, for babies, right? But you know, if they are working, they might not qualify for some, you know, the traditional retirement plans. This is a good time to explore and then, you know, a Roth IRA and start investing and helping, you know, putting some of that money that they're earning, even if it's a little bit.
But I think it could be very helpful as a teaching tool. To start and help them open the account, make them do it themselves with some guidance and, and really start to explore investing.
Matthew: Yeah. My parents didn't start that or, you know, push me to start that till I actually got a real job out of college.
And I wish I was usually always making some kind of side, side coin in college. I wish in high school, I wish they would have, you know, given me that concept earlier.
Josh: Yeah, it was good for me. I mean, starting at the bank during college was. You know, that conversation was being had with other employees. And they come to you and say, Hey, we have a 401k.
And luckily I was studying finance. So I like, I, you know, knew that and what that was. But to really explore, you know, your also employer options. Once you even get into college and helping them explore it and getting them interested is going to be a really good start.
Matthew: So for most people, money's pretty boring.
It's a taboo topic. They don't understand it. It's confusing to them. The best way to get kids engaged is to do some sort of game, right? You have to gamify things. And we're talking about, you know, something interactive, something that could be enjoyable, more fun for them that they'll be, they'll remember, right?
So as we move on one thing you could do for your kids is set up a play store. And this is probably kind of similar to like a, Lemonade stand concept right, but you know get him a little cash register Shopping cart put some toy food in there and have them go around and you know purchase the food Cup, you know give them some fake money and you know pay for it through the cash register
Josh: To be back to that idea Restaurant, you know play restaurant.
Matthew: Oh, that's a good one, too Yeah,
Josh: you have to pay for the food and there's a financial transaction that goes with that
Matthew: Yeah So in our house what we're doing we have an ice cream set and it came with some money and my both my kids like it the the one year old he just kind of likes trying to put the toys together, but the almost four year old she She comes in, acts like the waiter, takes your order, makes you your ice cream cone, and then we give her play money.
She takes it back. It's fun.
Josh: The play store idea is great. Any other ideas? Games, like you said. I mean, especially as they get older. I remember playing Monopoly. That's a good one, right? There's a lot of other finance games out there Like we said, there's apps as well that will kind of satisfy that craving of financial knowledge so those are all kind of game focused which will help them learn but I mean I loved playing monopoly when I was a you know teenager and I think that also kind of Makes you more interested in money.
Matthew: Yeah, absolutely. And it's fun too. It teaches you a little business Absolutely and it's strategic. Yeah, well the one you're supposed to get is it park place and
Josh: yeah park play Oh, the two most expensive. Yeah streets now I can't even think of the other one
Matthew: and then you kind of want to own a whole side of the board huh.
Yep, so you keep upgrading. Yep, exactly.
Josh: I think I think I even played My cousin was in finance while I was in high school and he bought the robert kiyosaki cash flow game Oh, that's cool. That's like a little bit more advanced, but that was fun too. Cause you try to like get out of the rat race, kind of same concept of monopoly.
But that was fun as well.
Matthew: Yeah, he's a controversial character, Kiyosaki but his first book was really good.
Josh: Yeah. I liked his first book and that game was fun. Yeah.
Matthew: Okay. Well, let's move on. I think we've talked about the littles enough. Let's move on to these adult children, right? 18 to gosh, four.
I have clients. I've heard stories of people who have, you know, kids living with them in their forties still. I'm sure you have to so let's get on let's talk about let's talk about the adult children I'll just start. Oh, yeah. Yeah jump in
Josh: it with You have to build a foundation. We do this with every client, right?
And that foundation, I know we're going to go over each you know, aspect of this, but it's going to just start with where you're at today, right? That financial assessment of what's coming in, what's coming out how much income do you have to spend? How much should you be saving? And having that conversation because awareness is your best friend when it comes to finances And without any awareness, you're not checking your bank account.
You don't know how much you make you don't know how much you spend None of the rest of this matters,
Matthew: right? So like, you know, if they're making a thousand dollars a month, let's say in their Part time job. That's what they had to spend right? That's the idea. Yeah So just I mean a concept like that
Josh: how many times do you even see you know, we have Clients of all different ages, but it's sometimes difficult for clients to actually tell us how much they make Most people can't so if you build this foundation from an early age, you know, even a adult child That's starting out.
This is this is where you're gonna start.
Matthew: Yeah, and then hopefully you're adding the savings element to we're like, okay You need to save 20 percent So if you're making a thousand that goes in your bank account, then you need to put 200 aside every month
Josh: Mm hmm and set goals to the savings, right? I mean, this is what again we do with our financial planning for our Someone of any age, but there has to be a goal because without a goal, then, you know, there's not as much motivation for anyone to save money.
Matthew: Yeah. And then the next level to this is you know, using like a budgeting app you could teach them that if they're really early in their twenties and they're still living at home, I'd probably say that's not as necessary. But once they're out of the house and they're at college, you know, I think teaching them how to budget their money properly is very, very important.
I'll say the
Josh: opposite. Start this as soon as you can. And the reason why is just practicing good habits. You know, there might not be that much money. It might not be that necessary. But if you start that good habit from a very early age, that habits going to continue. They're going to care. Right.
Matthew: Right. All right.
Well then let's talk about building credit. I think this is when we get asked a lot of questions on you know, should I put my, should I buy a car and put my kid's name on it? Should I get a credit card and put my kid's name on it? What are your thoughts on building credit?
Josh: You know, this is going to vary.
With the parents kind of financial situation as well, right? Like this is, there's multiple layers to this, but if you're in the situation where you can put a your child as even the primary on a car, right? If you have the money to put a big enough down payment, if you can add them to one of your credit cards and make sure you add their social to that, it'll start building credit from an earlier age.
Cause what we forget about credit is credit is history, right? So the longer you have it. A lot of, you know, I hear the common misconception of people saying no credits, good credit. That's not true, right? Like when we, you really go to buy a house, you go buy something big, no credit is, doesn't equate to good credit.
So starting earlier, getting something established, but then now there's a lot of options for children to, for student credit cards, right? Ask your bank, like go down there and say, Hey, can they qualify? You might need to sign or you might need to prove that they're a student and or there's some income to repay that or whatever.
But a lot of these banks are more than willing to start up bank accounts checking savings, and then even a student credit card. And that's just a great way to start building credit again, the younger, the better.
Matthew: Yeah. I remember back in college, they were always on campus when there's like a. You know some kind of like fair or you know reason for a bunch of kids to be gathered like in the quad type area the banking the banking folks would be out there with their You know setups asking kids
Josh: and it was pretty surprising even when I worked at the bank of how many students?
And at one of the stops I made I was in Loma Linda and there's a lot of like students that come through that area and how many kids though that were in college that didn't even have a credit card or didn't have a student credit card. It was pretty, Surprising even with you know, that's actually pretty accessible through the college campus and banks are always marketing to them Yeah, but you know go out and get one of those if you don't have one or help your child set that up Because again, there's no substitute for time when it comes to credit history.
Matthew: Yeah, you know, it just occurred to me, too I think most of the kids these days some of them don't even have bank accounts, right? They're just using like a Venmo Venmo's offer credit cards too. So that's another good way. So for kids, yeah, just using like a Venmo, get the, have them get the debit card or the credit card through Venmo too.
Josh: Yeah. And there's just so many good options now. You don't even have to go to a traditional bank and walk in if you don't want to. I know I said that's good practice when they're little to kind of show them. But I mean, it's just so easy to, to get a bank account and some that have really cool features like betterment, like we've talked about them.
They have checking savings, investing. They have the whole spectrum. All through their website, you can get that set up in 20 minutes. There's no excuse not to get that set up
Matthew: Yeah, they're a great service. All right, so let's let's move on to the saving angle of this this is probably what we get the most questions About is hey, I want so and so to start putting some money away for their future So they have a better retirement than i'm currently having Pretty popular topic amongst our clients.
So, you know, step one is that emergency fund. And that should be where you have six, three to six months expenses put aside. Most Americans don't have that.
Josh: No, they don't. And I think that again, found the word that sticks out to me is foundations, right? Building this good foundation of starting from an early age with an emergency savings.
I don't know how many times to, I'll even speak to younger people and they're like, I want to put in to a Roth IRA. Well, how much do you have in savings? Nothing. Then you shouldn't be putting into a Roth IRA, right? You know, you shouldn't even be really contributing into your 401k. We kind of get fixated on saving for retirement, but you can't save for retirement properly if you're not financially stable and secure.
Yeah. And you need to start with that. So that emergency savings fund is, is You know, very important to establish on a, from a very early age. Yeah,
Matthew: absolutely. So then after that comes the retirement plan and that's the IRAs. That's the Roth IRAs, the 401ks. I think you kind of hit the nail on the head. So I don't have a lot to say here.
It's emergency, it's debt pay down emergency fund first, and then you could save for retirement. The one point I'll add though, is this is a really good area where if you're having an open conversation with your adult children about money and you're a wealthy, you know, parent who maybe they're getting their RMD or they have a couple million in there.
In their retirement funds and they're necessarily not hurting for money where maybe you give your your children the you know, five six thousand dollars, whatever it is for them to put in their Roth IRA
Josh: Totally you gift it to them And you can even match that right like use the the word match like your company 401k is say You know what?
I know you want to start saving for retirement But how about you save that into your savings? You keep that there and I'll match you dollar for dollar into your Roth IRA or your IRA. So that way, you know, you put five grand into your emergency fund and I'm going to put five grand into your IRA for you.
Matthew: That's perfect. Yeah. Start setting them up to be, you know, bulletproof on the finances. Yep. All right. Anything left on this topic?
Josh: No, I think it's a good one. I really liked this topic. I think it's one of. Something that I want to speak about more as far as like financial literacy for children, because it's just not easily available and it's not being taught in schools.
So it is something that I, I really feel strongly about that it needs to be you know, more widely talked about with our children and in our society. So I think you know, I'd love to do another show on this again and kind of elaborate even more But I think we go went over some good tips.
Matthew: Yeah, and you know teaching kids about money super important I think we laid that out today You know the earlier you start the better But if you haven't started yet, and you know, your kids are in their 20s 30s 40s and you're worried about them.
We're here We offer that 30 minute consultation We're here to talk to your kids. We want to help them with their money situation. We want to get them set up We might set them up differently than you think they should be set up but I think josh did a really good job of laying out, you know, what comes first the order of operations
Josh: Yeah,
Matthew: it's a great topic.
All right let's move into evermont recommends Tell everyone about this gold zone you were teasing earlier
Josh: You're the one who told me about it, but I'm a still the the recommends cuz you recommended it to me so on NBC has the coverage and peacock is their streaming service. So you have to I think you have to have peacock, right?
To watch gold zone. Yeah, you do but gold zone is like red zone for the NFL who anyone's familiar where they actually show you the gold medal like events. So it's always changing to like the actual events that are happening that are being competed for the metals. So you're always getting like the top events and it kind of transitions back and forth between them.
So you're never missing any of the action. Really really cool. I really liked it And then it even was showing some of the sports that like I might not have tuned into but that were like they were fighting For a gold medal, which was really cool.
Matthew: Yeah, you know what sport i've actually kind of been into is the rugby Oh, yeah, i'm not a rugby guy, but I saw some of they've put the usa game on that channel.
And Especially the girls rugby. There's just one girl. She's a I don't know her name, but most people, if you've been following the Olympics have probably seen highlights or for long, it looks like a touchdown, but I don't know what they call it in rugby. I don't know. She had like an 80 yard run where she's just like stiff arming other girls.
And then they like
Josh: want, they got third, right? That was in that metal game.
Matthew: Yeah, I think so. I think so. So fun to watch the rugby. All right. My recommends. Yeah. All right. So I'm gonna go with the story. I saw the movie twisters. Okay, good movie. I see the first one I did is one of my favorite movies as a kid.
Josh: Oh cool
Matthew: So went and saw Twisters 2. Well, I don't know if it's called Twisters 2 or what but who cares a good movie Good popcorn movie probably, you know, probably one of the more enjoyable ones of the summer. I'm not really into the action movies So I'm not a Marvel guy but the main story here is I went back to the movie theaters for the first time since 2019.
Wow. That's a long
Josh: time.
Matthew: It's a really long time. Yeah. I haven't been in the movies in a long time. How
Josh: was it?
Matthew: It's nice. I went to the I pick, they have service there. So we had a bottle of wine and some popcorn and reclined our seats. Sounds
Josh: like a map movie. Yeah.
Matthew: So really good. The reason why I haven't been for a long time is, you know, one, the COVID, so the movie theaters were shut down and.
For most of 2020 and 2021. And then I guess life just got in the way.
Josh: I'm in the same boat, man. I haven't been to the movies since 19. Yeah. Well, it's been a, it's been a very long time and I want to go back. I enjoy the movies. I like going. You might be
Matthew: waiting till 25 given your current situation.
Josh: Yeah with the two babies I don't I don't know how long it's gonna be until we go but I will have to go because my wife and I both like Going we really enjoy going to the movies and cinematic adventures So we'll have to put that on the date night list for us to go out and do
Matthew: yeah Highly recommend getting to the movies if you haven't been in a long time
Josh: Have you heard not to keep this dragging on but you know, you can rent out a movie theater You
Matthew: Yeah, so actually we were looking at doing that for my daughter's birthday party,
Josh: okay
Matthew: And then I asked my wife how much the cost was and she told me I said, no, we're not renting Birthday party,
Josh: I don't think it seemed were you trying to do it at the I pick though.
Matthew: I don't think so
Josh: Okay, so I heard I haven't looked into it, but I heard that during the day. It's not that bad
Matthew: Yeah, it's not that bad. I think the issue is it would make a really good kid's birthday party. It would be really cool the issue that I had with it is my daughter told us she doesn't want to party this year where you're inviting a bunch of people So I'd basically be renting out a movie theater for like our immediate family ten
Josh: people That doesn't make sense.
Matthew: Yeah, but really cool concept if you have older kids. Yeah, totally okay. As advisors, our passion lies in assisting others. It's the very reason why we've chosen this path. If you're interested in meeting with myself, Joshua, or Brent if you visit evermont. com, you could book a 30 minute complimentary consultation.
You know, we'll hop on the phone, talk about your finances, ask you some questions and, you know, see if you're a good fit for our firm. And you could get to see if you feel like you're a good fit for our firm. Additionally, you could download our ebook from the website. That's evermont. com. Don't forget about our Instagram.
We're putting out 10 new videos a month. So give us a follow there and thank you for listening to the retirement plan playbook. Thank you
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