Raising financially-confident kids; Tips & strategies for families

We're talking money here and money lessons don't need to wait until kids earn their first paycheck. That's right. Northwestern mutual financial advisor Drew White is here with his son Beckett with tips for raising financially confident kids. Good morning guys. Good morning. How's it going back? Good, good, doing good. So glad you guys are here. You're the prime example of learning early and it really makes a difference. Um, so let's talk a little bit about that. Why is it so important to teach kids about money and also catch the Marley money? Money is not something that you're born with ideas on. Like they're, you know, the nature versus nurture discussion. You don't come out of the womb with ideas around money. Everything is developed either intentionally or unintentionally. And whether we like it or not, they're really paying attention to what we're doing in all areas of life. Um, so we'd rather be intentional to build confidence financially so they can help make good decisions moving forward. Yeah. And Beckett, how old are you? Seven, seven years old. When do you, when was the first time that you started saving money? Are you saving money right now? Yeah. Yeah. When was that? Was it this year? Was it when you were six or five? I started saving, I started saving when I was two. Get out. We are late to the game here. And with that saving of money because kids get a lot, you know, for their birthday, for a holiday, we should probably break it up into different compartments and piles, right? Absolutely. Just like your financial plan as an adult, like we should have a plan as a child as well and just be intentional about where your dollars are going. And there's, there's lots of different things you can do with money. Of course you can spend it, you can save it, we could give it away, charity, those types of things. So helping them understand those simple concepts, um, goes a really long way. Okay. So Beckett during the break said that he would give some away too, which is really admirable because most seven year olds aren't thinking like that as well. So that, that means things are going okay for you. I don't know where you're earning all that money, but I'm curious if you have a job yet, maybe we'll get to that later on. So what can we do at home, uh, drew that you recommend for Beckett or somebody that's, you know, around his age or so? Yeah. So number one is model good behavior. Yeah. The parents should have a financial plan. They should be meeting with somebody like us to lay everything out. And then second is just talk about it at home. And the more you talk about it, the less like I think scary or nervous money makes people as a, as a age. And that's really ultimately what we're trying to do is provide that confidence. So we talk about it a decent amount. What do you think is the most important thing you've learned about money? It's important to save and invest. Yeah. And you can cheat and you can also buy a house. You can buy a car, you could buy, and it's also important to have a plan with your money and what you want to do with it. Part of that plan is budgeting. You know, uh, share a little bit more about budgeting because there's kind of an approach that you should use. Yeah, absolutely. Budgeting is just monitoring cashflow and managing that, you know, whether it's on a monthly basis with how your income comes in or whether it's a child receiving money for a holiday or their birthday. A simple rule is kind of like 60, 20, 20. So 60% as an adult fixed expenses, 20% discretionary, and then save about 20%. Thankfully, he doesn't have any fixed expenses yet, which we might, might add a couple to you. What do you think? Yeah. Even at seven though, budgeting kind of comes to play because even with like your spend money, you're like, how do I want to spend this? Is this worth it? Is this worth my purchase? So even from seven years old to as you get older, it's how do we spend that money and be flexible with it and do it responsibly? Yeah, absolutely. If we're saving and we have a plan, we can also do fun stuff. So you talked about some things you're saving for that are, you know, good big-picture long-term things. What are some neat, or what are some wants, what are things that you're excited about saving for that you could maybe buy? Um, a speedboat that I could do But the point is, if you're doing, you know, the planning and if you're putting dollars away, you can also have fun and kind of have that balance in life and not feel guilty about buying that, you say speedboat? Yeah. Okay, we'll talk about that one, but buying that speedboat so you can have fun as well. Well, you know, it's interesting to have this conversation not only at home, but also here in front of people. I think you're pretty brave, Beckett, but also you have knowledge and you're smart beyond your years that you know you have to save as well. And as far as saving goes, though, Drew, where do you recommend putting the money for the kids? The savings account, the money market, you know, there are other options, obviously. Yeah, there are a lot of options for children, and each option has an advantage and some disadvantages that go along with it. So before making those decisions, I'd highly recommend talking to a financial planner, having big-picture discussions on, like, what's the purpose of the money, ultimately what do we want, to determine where those dollars go. You know, there's 529s, there's ATMAs, there's new Trump accounts, there's a lot of options to choose from, and it's not a one-size-fits-all, so have those discussions, have a plan yourself to help them do the same. And that's really a personalized plan, which is even better. Absolutely. Hey, Bud, would you would you say you're confident with money, or does it make you nervous? It doesn't make me nervous at all. I don't know how someone could be nervous about money. Right. Well, because you're knowledgeable, and that's the first step, and that's exactly what you're instilling in everybody. Exactly. Well, there's one way someone could be scared about money, with their insurance. If their kids are, if their kids are, their kids are playing baseball in the house, and they're throwing the baseball up and swinging it, and they break a window, they might blame it on their parents. Oh, really? I feel like he's talking about past history. Maybe it happened with one of his friends in the neighborhood. Yeah, for the parents not being careful while they're mowing. But you know what you do, Bud? A rock might shoot out of the chute on their mower. You're right. And that's a good reminder about insurance at many different times at your home. I've got two solutions to that, Bud. One is we've got homeowners insurance, so it protects things like that. Number two is Thank you guys so much. Great tips. Thank you guys. Yeah. All right, guys. Coming up, a classroom project that evolved into a real-world investigation. Chino has a look at that new docu-series coming up next.