Financial independence: At what age should we teach kids about money?

We've got a lot to talk about here this afternoon. We just enjoyed a little bit of political talk with our political contributor, Pat Kessler. And now I want to talk a little bit about money, especially your children's money, because our kids grew up. We teach them how to drive. We teach them how to behave. And hopefully we teach them a good money skills as well. Right now, a lot of the big banks are leaning hard into helping our kids manage their money. I think we've all seen that. the Wells Fargo's ads that have been on right now. The cute little ads with a kid in the grocery store buying two great big bottles of soda and two great big bags of chips because it's two for one and it's his way of managing his money. And the mom looking at him like, what? And the voice in the commercial saying, he's learning mom, in his own way, he's learning. I just love those. uh but it's critically important to teach our kids how to manage these money skills joining us now to talk more about it is Nicole Middendorf, the CEO and advisor at Prosper Wealth Financial here in Minnesota thanks for joining of course of course you know i love this topic because i'm one of those parents who when the girls were in middle school um we went out and got them we went down to the bank and got them these teenage accounts what they were called at the time. And they allowed us as parents to monitor, right? So we could also deposit and transfer money and kind of keep an eye on what they were spending, right? So we could be good coaches for them. And then when they went on to college, it was incredibly useful because I could see if they were overdrawn and I could put some money back in because they're college kids and they're just not paying attention right right right so at what age should parents be thinking about talking their kids about money and opening a bank account for them that they can jointly manage i'm a huge advocate the sooner you start the better so when you're sitting down with your kids and doing math pull out the pennies i know so few people have coins anymore but pull out the pennies, the nickels, the dimes. But we all have a coin jar. Right, right, your little swear jar, no swearing. You use it to teach your kids math, but also then to start facilitate that conversation about money. So I believe, and even to like turn off the lights, like explaining electricity bill. I mean, as soon as my kids were talking, I had been talking about money with them. Now, as a financial planner, I probably talk too much about money with my kids. But now that they're teenagers. It's been huge. It's been so helpful. And the 2028 graduating class, so I have a junior and a senior in high school. My junior, my daughter, that is the first graduating class now, the class of 2028, that the state of Minnesota now requires a class for them on finance. And it's interesting because she did that sophomore year. So I got the girls into the car. We were driving to the Minnetonka Ice Arena from school. And all of them were in the class together. And my daughter's like, Mom, there's so much you didn't teach me about money. And I'm like, what? She's like, well, today we're talking about car insurance. And she goes, I didn't know that if I have better grades, then my car insurance is less expensive. So there's so much to money. That's where I really believe start at an early age talking to your kids. And I'm glad you brought that up. Before it was a state mandate, our school district offered it as an elective that's great that they even offered it and I of course I forced my girls to take that class and they were not happy with me they were not having that boring well yes I mean one of them wanted to take another class uh music class I think the other one wanted to take another science class um but I forced them to do it to this day they both tell me especially Maddie my oldest one who says dad you were right that's the most valuable class I took in college. I use what I learned in that class about budgeting every single month as I'm trying to figure out how to pay the rent and make the car payment and the insurance payment and everything else. They are critical skills. And I do a lot of mentoring with students at Minnetonka High School. And it's a conversation that I always have with them. In fact, I just had it Monday morning with a student that I was meeting with. And I said, have you and your parents talked about creating time in your remaining class time here to take a personal finance class and she said yes I have I think maybe next semester and I said you've got to do it you have to have that conversation with mom and dad and do it and I told her all the reasons about right you know my daughters and going through that same experience and there's there's best prep and then there's Junior Achievement there are there are organizations like I would go into the classroom and speak, but having one person come in just at one time versus at least now the kids are having something. Now what I do see on the other end, I see a lot of parents are like, gosh, I don't feel in control of my own money and I don't feel like I know enough about my own money. How can I talk to my kids about it? And I'm like, you gotta get over that. You can't know it all because every single day something is changing from taxes to the economy you name it. And life happens. And that's part of having that conversation with your kids and facilitating that. My daughter and I, we had a meeting the other week and I redid how her allowance happens. And she's like, Mom, I have an electric car. She doesn't. And she's like, Mom, she goes, it is so expensive for me to get to the ice arena and get myself to school. She goes, I need some help with that. I'm like, okay. So I'm a huge advocate of the green light card. So we use the green light card and so we redid her chores and she has to check off. And it's taking out the garbage, keeping her room clean, doing her laundry on certain days, getting the mail, stuff like that. And then she'll get money to help with the gas because it's so expensive. So it's having that conversation and not hesitating to stop and have that conversation again. Cuz it's not like you can give your kids an allowance and then we never need to talk about money. important thing is to talk about it every single day now a lot of the banking products now will offer assistance in in their apps and that's kind of central to the new Wells Fargo ad campaign that they have and this product that they've had for parents and teenagers where they can track their spending so they know where their spending is going and and gets them to think about that as as we get to a society now where look let's face it everything is more app based right and you can track things electronically um how beneficial is that it's huge i mean that's like in the green light in a lot of these apps you you i used to always tell people you'd give your kid 20 or 50 or 100 or whatever and you would never see the change from that and you'd never see more money will give your like my daughter I'm giving her money to use for gas. So she's I know she's not going to take it and go to Chipotle because she's not able to. And so that's where one you're giving some restriction. You're giving yourself an allowance because you don't want to give your kids more. There's a point where you can enable your children and you make it too easy. Like you don't want to do that. There's this fine balance, but you want to give your kids money and give them some flexibility, But also teach them like we had to have the whole conversation about like DoorDash and stuff like that. And like Uber Eats like that the amount of expensive right and I'm like I never you know like one time my son ordered something I'm like I literally just drove by there on the way home. You know but like our kids are being raised apps everything's instant. You just go online and you click and it's all about being conscious. So how can you teach yourself to be conscious with money? How can you teach your kids? So when you're putting things into categories, one, generally you're teaching your kids how to be conscious with money, but you're also, in a roundabout way, teaching them how to budget. Yeah, and let's face it, we model behavior to them as well. Absolutely. So if we want their behaviors to change, sometimes we have to look in the mirror and change our own behaviors. Absolutely. Yeah, yeah. At what point as parents do you say, okay, do I start letting go of this oversight? Is it when they get into college? Because I kind of found that they needed maybe a little bit more coaching, maybe a little bit more questions when they were in college. I believe it's all the stages of life. When someone hits 16 and they find that new independence, they're driving the car, you may need to step in a little bit more have more conversations than when they were 10 or 11. And then they hit 18, then there's voting and taxes and all of that stuff. There's so much related to money. When you hit the college years, that's where it's really super important. Because back in the day when I went to school, kids would sign up and get a credit card and then they would use it and they never understood like, I have to pay that money every single month or I have to pay that back. So it's having those conversations, but it's also setting your kids up for success. And so just because they're independent and they're over 18 and they're off at school, it's really helping them figure out, okay, where am I living? And how am I gonna be living when I'm done with college, let alone student loans and all of that stuff? Because so many times kids go to college and they don't have a concept of like, okay, if I go into debt of $100,000, how long that's gonna take me to pay it off? like, oh, I get a job making 60 grand a year or 80 grand a year. It's not like you can instantly turn around and pay off the student loan. So college years are where it's even more important. I would agree. I agree with you wholeheartedly. Okay, so let's bring it back to the families with the emerging adults or kids that are getting into middle school now and you're wanting to start a banking relationship for them. You mentioned the Green App. You really like that. And I know a lot of you at home, you have relationships with a banking institution, most likely, whether it's one of our great credit unions here or one of the banks that's either down the street or in your neighborhood. Do you recommend going and talking to a banker? Because each one of them will have a product or an idea or an app that maybe is tailored towards your kids. Absolutely. You bring your child in. I brought my kids in, and one, my daughter actually went to a different bank because of it. She's like, well, I wanna go here, and these were her reasons why. And nowadays, she actually ironically just got her bank statement in the mail yesterday. And they don't even look at it. And I'm like, no, you need to look at your statement. Everything's on apps, everything's debit cards or automated pay and things like that. So that's where it's important to sit down and have that conversation. Because one of the things we did when we were there was we were asking about money market rates and savings accounts. And I said, well, Gabrielle, I can actually get you a higher rate to have the money market account with my broker dealer than with the bank. And so that's where it's, one, it's establishing and giving that your child that next relationship so that they have a relationship with the banker. But it's also then facilitating those conversations. I'm gonna quote the Wells Fargo ad that I love so much. They're learning mom, they're learning at their own pace, right? The other big thing I'll mention too is the Roth IRA, my huge advocate. As soon as your kids are starting working, help them sit down with a financial advisor as well, not just the banker, but help them get a Roth IRA. Nicole Mitten-Dorff, CEO and advisor at Prosper Wealth Financial here in Minnesota. Thank you so much. Thank you. This is always great to have you through. Yeah, so good to see you again. Thanks. All right.