Money Musings 💭 Raising little money mavens
This week: How to teach kids about money, money moves that changed my life, "liquid" defined, and community money wins.
What you’ll find below:
Reflection: This may surprise you…
Money Move: These money moves changed my life
You Gotta See This: Do you know what "liquid" means?
Reel of the Week: Little luxuries to romanticize your summer
At a recent talk I gave to the Women’s Bar Association, the Q&A turned into a group discussion on raising financially savvy kids. You know I’m all in for that.
The #1 question I get from parents: 'How do I teach my kids about money?’
So many of us grew up not learning anything about personal finance. It wasn’t taught in school and it’s still a topic that often feels too taboo to talk about even with our closest friends and family.
We know that cost us big time and we want to do something different for our kids. But that doesn’t make it easy.
When I ask parents why they don't talk about money with their kids, here's what they say:
“I’m not an expert.” Who am I to teach my kids about this complicated topic when I don’t know what I”m doing?
“Why burden them?” They’ll have to deal with money stress eventually. Just let them be kids.
“I don’t want them to become money obsessed.” They’re already super money and prize motivated. I don’t want to feed the beast.
I get it. Here’s what I think:
We don’t have to do it perfectly. Even sharing honestly about where we made mistakes can be tremendously valuable. We’re modeling a growth mindset. We’re learning with them. And that’s beautiful.
Kids think this is fun. They don’t have the money hang ups we do. As you start to talk about money with them, you’ll see they’re excited to have more information and learn how the system works.
It’s super common and typically age appropriate to be interested in having more money and building wealth. Also, we aren’t very different. Yes, kids love a good sticker chart, but we don't do our jobs for free. We get “prizes” and rewards too.
There are so many incredible lessons that come with learning about money. We want to be financially savvy but that can also mean gratitude, generosity and so many other wonderful learnings.
All this to say, if you haven’t already, here’s the nudge to talk to the kids in your life about money. Whether it’s your kids, nieces and nephews, students, or any kid in your life, you got this.
I’m going to be sharing more resources about raising financially savvy kids AND how to handle all the financial situations and goals that come along with.
To start, try to keep an open mind.
There are no bad questions. You can have boundaries around what you are willing to share BUT keep it encouraging - there’s no room for shame.
I gave a talk about money to my son’s 2nd grade class and one of his friends asked “How much money do you have?” I should have been more prepared for that one. Immediately, another student yelled out “You can’t ask that! That’s rude.”
While that might be our knee jerk reaction (especially given how we’ve grown up in a society where money is taboo), we want to answer in a kind and open way.
You might say “I’d like to keep that private for now but I can show you what someone in my same type of job might earn” or “Grown ups have all different amounts of money. Here are some of the things I’m saving for.”
Bring them in with little details.
Yesterday, I showed my son our Costco receipt and said, “Here. You can look at how much everything costs.” You could have them guess prices when you’re in the grocery store. Or show them what you’re doing when you Venmo someone money.
I could go on and on but I’ll leave it at that for now. More soon. What questions do you have?
THE 30-DAY MONEY CLEANSE: WEEK 3.
Week #3 of the Money Cleanse might be my favorite week. We dive into concepts that completely changed my life - aligning our spending with our values and opportunity cost.
Values-based spending. This might sound like a no-brainer but when we spend our time and money on the things that are most important to us, we feel more fulfilled and experience more joy. Most of us are not doing this (or have much room for improvement).
In the book I take readers through an exercise to help them come up with a values statement to live by. It’s big! With that handy, you can rank each of your expenses (in your happiness allocation) from 1-5 based on how much they align with your values. It’s eye opening!
Opportunity cost. The point of money is to have and experience the things in life that we want. We can use it like a tool! To do this, list out the three things that make you the happiest. For example, turmeric lattes, growing your net worth, or getting massages.
Then, what does each of those happy items cost (on average)? For example, dinner with friends might cost $60 with tip. Or if you have $2K on your credit card, that’s the cost of being debt-free.
I call this our opportunity cost because (very unfortunately) we can only use or spend each dollar once. So when we spend on one thing, we don’t have a chance to spend it on another. Look at each of your expenses in terms of your opportunity cost to see if it’s worth it to you. This isn’t to make you feel bad, it’s to help you take an honest look at what’s truly treating you.
For example, if a monthly massage costs $125 and you’re spending $250 per year at the movie theater, that could be 2 massages. Would you rather spend it there? Or put it towards a goal?
Carry this opportunity cost lens into your next week of the Money Cleanse. I can’t wait to hear what you uncover!
DEFINE: LIQUID
In times of uncertainty I hear the term “liquid” all the time. “You should keep your short-term cash needs liquid” or “Your rainy day fund should be liquid in case you need to use it.” But what does liquid actually mean?
DEFINE: LIQUID. Liquid funds or assets are money that you have in cash or that can easily be converted to cash with little to no loss of value. Think - your high-yield savings account, checking or savings account, or even money market funds.
While we can liquidate (i.e. sell) our publicly traded investments at any time, we don’t want to keep our rainy day funds in the market because we don’t want to have to sell at a loss or inopportune time.
By keeping our rainy day funds and any other savings that are for short-term goals in liquid funds, we aren’t at the mercy of the market and have the opportunity to wait out dips.
Here are all the amazing money moves you made this week CONGRATS! Celebrating you all!
Tanyra R: 1) Paid off my car, 2) Canceled subscriptions — saving even more $$$, 3) Paid down 50% of a high-interest CC — 50% more to go!
Anne: Got my car battery checked as soon as it began having a little trouble starting - turned out it was time for a replacement, and I still had a few weeks left on the warranty, so I got the new battery for free!
Courtney: Have been consistent with checking in on my finances every Sunday. Trying to build a habit and fight the financial anxiety!
Sierra D: Wore a dress I already had to my art opening instead of getting a new one
Olivia: Friend works for a good shoe company, got 65% off!
Ansley: Simplified my budget so that it's easier to stick to
April R: Have savings for my next two vacations. Feels good not to use credit card
CVP: Got another job on top of my other 4, got my art for sale in a new gallery
Julia: Pet insurance - worth every penny. Paying for cancer treatment for our dog at 90%. Better than for humans!
Em: Stayed under budget on my vacation!
Courtney: Resisting buying new books when I have SO MANY
Jule G: Got a promotion at work with a 15% raise!
Xena: New sinking fund for travel with auto transfers
Jen K: Got a bag I didn't love and made sure to send it back asap!
Onyx: Received student loan forgiveness of $118,000!! And now I'm debt free!
Anna H: Twice this week I defeated the temptation to order out and cooked at home instead
Thalia: Officially have 2 months worth of emergency savings for our family of 3
Sierra: Did my nails instead of going to the salon
Amy S: Not sure if I truly count this as a win, but due to toxicity I've quit my job without anything else lined up. I'm getting a HELOC to support myself and upped the loan amount enough to pay off all of my CC debt. So I'll go into being jobless also being CC debt free, and my HELOC payment will still be less than what I had been putting toward CC debt, so I feel like it's a win....maybe?!
Share your money wins here!