my guest today is robin tobe robin is a personal finance speaker and best-selling author of the book the wisest investment teaching your kids to be responsible independent and money smart for life prior to writing the book robin worked at large accounting firms including kpmg and ernst young as well as at citibank in canada she's been doing financial consulting since robin is a graduate of the university of toronto and holds both the cpa and chartered accountant designations robin thanks so much for joining us today to share my pleasure on how to teach good money lessons to one's kids thanks for having me i'm excited to be here i'd love to start just by understanding you know a little bit about your sort of origin into this topic how did you get interested in this topic in the first place about teaching kids about money well i do have two kids myself they're now in their 20s but 10 years ago when i first wrote the book i was interested in financial literacy because it was it was a few years after the global financial crisis and there was an awareness as to the importance of financial literacy and financial capability in the general population for making good decisions and at the time uh the publisher of the first edition of this book they did some research and and they found that parents were really struggling with this topic they found that parents uh almost 80 percent of parents tried to teach their kids about money but more than two-thirds didn't feel they've been very successful at it and more than half didn't know what information they needed so they asked me to write this book and because i am a financial professional and i have been you know out of school and graduated and working for a long time i had two kids i thought yeah this is something that i feel strongly about and between my own lived experience with my kids and research um i felt like i could bring bring it all together in in a book and that's that was the impetus for it ten years ago okay perfect yeah that's really helpful context um there are a lot of personal finance books out there what what gives you unique insight on this topic like why should folks pay attention yeah like that that question it's like well why you and why this book so because i have a deep financial background as you mentioned i am a an accountant by training and i also worked in tax as well as um in derivatives marketing that's what i did at citimate canada so you know it's not um at a superficial level this is at a really serious level and i've also always continued to learn about personal finance and investing is something i really enjoy and i'm interested in and then having raised two kids who are now in their 20s and seeing firsthand the importance of giving them the knowledge skills and confidence which is really the definition of financial literacy the knowledge skills and confidence to make responsible decisions at different stages of their lives and seeing how that's paid off so i think that those two things my education my experience professionally and personally okay excellent um i want to start out with like the the hard question at least to me is hard why is teaching kids about money hard like to someone who hasn't done it before it probably doesn't seem like rocket science but it's not easy what makes it challenging it's true like the fundamentals of earning saving spending sharing and investing it isn't rocket science some of it is common sense agreed but it's still really challenging for parents because as i mentioned before they feel like they don't have the time to do this or the opportunities so that's one thing many feel they don't have the knowledge i was lucky this was what i did professionally but a lot of people they're doctors they're lawyers they're all all kinds of other things are teachers and they just don't have a financial background and maybe this is something that they've struggled with personally so it becomes really hard to teach your kids if you don't feel like you're good at money yourself and it's easy to avoid the topic when you're running a busy household so for a lot of reasons parents avoid it and you know they're they're afraid they're going to get uncomfortable questions like are we rich or are we poor or how much money do you make so there are a lot of excuses for why parents don't get to it um and again it's not that the concepts are difficult once you get into it and even if you don't feel you're good at this yourself you can learn along with your kids but it is so worth it because the consequences to your kids if you don't are serious but it could also come back to haunt you if your adult children aren't financially responsible independent and money smart oh yeah totally i'm sure they'll boomerang back so i'm trying to visualize what parents who do a good job teaching their kids about money really get right so you know if i was visually observing a family that had been very successful in teaching their kids about money maybe that's you uh what what are the markers or characteristics that those kids might have in common so i think what you would see if you were watching a family who in my opinion is is succeeding at teaching their kids is one the parents would be good financial role models for their children so they would have their own financial house in order so that they can lead by example because kids are aware of both the good and the bad money habits in the house the and they are watching and listening and learning from you and that's true in all areas of life as a parent you have to be aware of your behavior because you are a really important role model for your kids so i think in in a household where this is being done well kids would notice they would pick that up by osmosis what their parents are doing and emulate them some of those good habits because forming good habits early is really important habits become more difficult to break as you get older so that's one thing they would observe they would also notice that these parents are looking for teachable moments and looking for these opportunities to build a money lesson into their day-to-day lives so as i said one of the issues is i don't have the time to teach my kids but you'd be surprised if you look for these little moments they crop up naturally because we're constantly doing things with money we're buying things we're saving for things we're paying bills and your kids may ask questions or you may even choose you might offer up oh do you want to know what i'm doing right now i am looking at our monthly budget or i'm paying our mortgage online or i'm looking at our visa bill so there's always these opportunities to talk about um money with your kids and then the third thing they would notice is that these parents are very well aware of their personal values the things in life that are most important to them as a family as individuals and as a family and they're using those values to help guide and prioritize financial decisions for the family and they're making an effort to instill those values in their own children so that the kids can internalize them and then use those as guiding principles throughout their lives those are the three things so that's um that's really insightful i think uh you mentioned role modeling teachable moments values that speaks to the parents what would i observe in the kids well kids who are learning these things are establishing a foundation in what i call the five pillars of money so earning saving spending sharing and investing so depending on the child's the age of these kids you're observing whether they're young kids or pre-teens or teenagers or young adults they're starting to develop knowledge and skills in those five areas and the information that they're observing that they're taking in and then applying is relevant to their day-to-day lives and the stage of life that they're at so obviously someone who's um a young adult maybe in college they're going to have different specific examples in their lives under those five topics than a preteen would but you would see that they're reaching these financial milestones whether it's filing their own tax return as a young adult or saving up for college or helping to pay for college or just living within a reasonable budget as a pre-teen that's starting to go out more independently with their friends oh and saving you would see them using a piggy bank or going to the bank or using a debit card so those things got it okay that's that's helpful as a um to kind of visualize a little bit um what what's it what age is good for parents to start in earnest imparting lessons about money to their kids i suggest around age five because that's when kids often start preschool and they're around other kids and they're noticing what other kids have and do and they might start asking questions about money i mean anytime your kid asks expresses an interest or curiosity around money because they see you using it or they see you tapping or using your phone that's the time to start so even if they're younger than five go for it but for i think for most kids that is usually around the it's around that time that they start to be able to take it in and then even by the time they're like seven eight they're a little more reasonable they can understand more complicated concepts so you always just have to take into account like how mature are they and what stage they're at yeah okay that makes sense um so in your book you you break down financial education into age ranges five to eight nine to 12 13 17 18 to 21. i was curious if you could um share a little bit about like what are key money lessons that kids should ideally be internalizing by each of those age ranges so that they're learning and developing the right skills and habits and mindsets at the right velocity and sort of properly amortizing critical personal finance lessons throughout their childhood yeah so for each of those four stages that you mentioned again like in the book i have topics under each of those five pillars of money so let's just pick like if a young child is earning money it's usually from holidays or birthdays or the visits from the tooth fairy they're not working they don't have a job but as they get older you know a preteen could be babysitting or being a camp counselor a teenager could be working in retail at a restaurant and an emerging adult could have a job on campus if they're in university or college so at each stage there is an appropriate activity or a thing that they could be doing around earning and that's how i approached each of the five pillars so a young kid would be saving in a p bank a preteen would be opening a youth account um you know uh a an emerging adult would be opening um a student account or an investment account so as they get more mature the uh the specific topics and examples under each of those five get more sophisticated and hopefully you've been building the foundation from the time that they were younger uh you know a lot of stuff under spending has to do with um you know paying attention being mindful of their spending uh having a budget and what does that mean at different ages you know it's going to be different if you're living on your own in college versus when you're just a pre-teen starting to go out with your friends so just you know really trying to think about what is appropriate age-appropriate at every one of those stages for each of those five pillars yeah that makes a lot of sense and as um you you've mentioned now a couple of times these five pillars being earn save i think invest share spend right yeah that's different order but yes that's right okay so what what do you find commonly like as a kid progresses through the like their childhood which um of those pillars tends to get um more focused at each of the phases yeah yeah i mean i would say investing is becomes more and more important in the later more mature stages so as a teenager they might start you know you could start with simple stuff like compound interest or gic or something like that uh you know and some high school students might be learning in school already about stocks and bonds and other you know and investing but usually they're not ready for that until they're a little bit older um and you know they also don't have a lot of money to to invest unless they're working or they're very entrepreneurial until they are you know maybe finish getting to the end of university college years um so i would say that's kind of more for the later stages um i feel like spending is important all the time because we live in a society that stresses instant gratification and consumption and god our kids are exposed to so much media and social media and have fomo the fear of missing out so there's a lot of pressure to spend and keep up the appearances online of living your best life so feel like that can start as young as preteens and trying to help your kids set goals and delay gratification that's really really important and then as i said like a teenager is going to have a fairly simple budget if they're still living at home but you still have to go over what you're paying for what they're paying for if they're working or not once they go off to university that's a big milestone and a big expense so requires a little more budgeting and a little more planning um you know i like the share category because it doesn't get as much attention usually um but it's it's so important and that can start really young when kids just you know remember when mine were little they used to bring um a coin money in coin form which we have once a week to school to give to charity to put in a box and as they get older like there's always opportunities at school to do fundraising for for different causes or for the school itself so those types of opportunities are great throughout the different stages and and as they become um like teenagers and young adults volunteering is a really great way to also build career related skills like networking and um you know depending on what you volunteer for so sharing and doing things as a family that are philanthropic is also a great way for parents to deal with kids who are starting to maybe develop a sense of entitlement because it reminds them it puts things in perspective and it reminds them to be grateful for what they have and it shows them that not everyone lives the way that they do so i really love community projects as a family and i've personally done with my kids certain projects like my daughter and i volunteered at a place called soup sisters where we made soup for families living in shelters and you know we've done like fun runs and those types of fundraisers so it's just a really important way to remind kids that um there's a bigger world beyond their own narrow needs and wants yeah that that's a really um important i think um area of financial education i do want to circle back to that because i think it's it's worth deep diving but even before we get there um what are common mistakes that you see parents make or or potentially ineffective behaviors or strategies that they use when it comes to teaching their kids about money the biggest one is that they just wait too long they wait until their kids are older like teenagers or older even to have the money talk and i sometimes joke around with parents like would you rather talk to your kids about sex or money because they're both these big looming talks that you know you know you are supposed to have and should have and not even just once but on an ongoing basis and i think the biggest mistake is that parents avoid the topic because as i said they they feel like they're not good at it they don't have the time but not starting early it deprives your kids of the opportunity to make mistakes when the stakes are low and anyway they're learning something out in the world yeah they might as well learn it from you i guess right well there's that too like if you don't teach them who is um you know they're gonna pick things up from siblings or grandparents or friends or or the media or celebrities and athletes who are living in a completely different world so they are going to be picking things up they're going to learn the hard way so as parents to the extent we can we want to spare our kids that and show them the right way and you know it's everyone's going to make mistakes myself included so it's important to make those mistakes when there's not a lot of money involved because if you know if you have no experience experience managing money and you wait until you're older to start doing that and making decisions it's very easy to screw up and to dig yourself into an expensive hole one thing that comes to mind right away is credit cards a lot of kids go to college um and they are bombarded with credit card offers and they take them and they don't they just are naive it's not their fault no one's taught them no one sat them down they don't know how they work and they start using them and all of a sudden they racked up credit card debt and it has to be repaid and as you know the interest rates are high and before you know it that's an expensive mistake that can get out of control so that's why you want to start teaching them early i mean i think you know i don't i think that really is by far the biggest mistake i see out there is just ignoring it or waiting too long okay um and i guess related to this what are um in your view the most effective actions or type of role modeling that parents can do uh to successfully teach their kids about sort of the key money lessons i think that if you're diligent with your finances your kids will pick up on that and they'll notice so you know they'll see you going through your bills paying your bills um doing your tax return they will notice if you're the kind of person that makes like impulse purchases that's constantly like buying things without planning for for you know saving up for them or um thinking about how you're gonna pay for it if you just put it on your visa and just you know worry about it later things like even your attitude towards work like do they see that you're motivated and excited to go to work or are you driving your feet and complaining about it a lot like kids will pick up on things like that they really do notice if you tend to be more of a spender or more of a saver and you know often in relationships one half of the couple tends to be one while the other one tends to be the other but your kids will observe those things um you know whether you talk about money openly with your partner or with your family they will notice that so there are there are actually 11 healthy habits of financial management in my book and you know things like paying yourself first like are you saving are you investing do you talk about it um do you have your wills and powers of attorneys done um is there a clear understanding of the difference between needs and wants do you talk about stuff like that uh the big picture of the of the household finances and you know the household budget that you're managing so i feel like there's so many things that your kids can pick up on uh just without even you being aware of it so i actually have um in the book a quiz called the financial role model self-assessment and it just asks you a bunch of of statements to help you become more aware of the behavior that you're that you have around money interesting so taking the assessment what what is a parent meant to do with the results so it just gives you an idea of i'm gonna actually pull it up because there's like a summary at the end and it's just supposed to give you um an awareness of what kind of role model you currently are and what kind of role model you can be in the future for your child now sorry let me just one second to that page it's just meant to bring more awareness to your behavior around money because sometimes we just forget that we're acting a certain way or that we're behaving a certain way around money with our kids hold on i am just looking for it but you can ask me something else while it just slips yeah no no worries i i think um that that's mostly what i want to understand like it's i guess it's just meant to yes it's like a true or false so it's a statement like i wouldn't stretch myself financially in order to drive a nice car so and that's also taps into your values but so you answer that was true or false or i adhere to a structured budget it's another one i'm usually eager to get to work um i keep well informed for everyday financial decisions so there's 20 of those um if you answer true fewer than 10 times i feel like you have some work to do um if you're like between 10 and 15 then you're modeling good behavior some of the time but you could do a little bit better so it's really just meant to and this is this isn't a comprehensive list of behavior but it's just kind of meant to give parents pause to think about well hmm you know what message am i sending with my behavior around money okay um sort of to me the the holy grail what advice do you have for getting kids to develop an intrinsic interest in motivation to learn about money because that that will be self-sustaining and perpetuating if you set it up right and so i'm curious are there behaviors or actions that you've found to be effective to actually get kids to self-motivate and wanting to learn about saving and investing in budgeting and make it feel relevant and not dry and boring yeah i mean i think when they're younger it's just kind of you want to make it engaging and fun for them just to spark an interest but really it becomes real and important once they're teenagers because they want to do stuff they want to go out with their friends they want to go to concerts they want to travel they want to start doing stuff and that takes money now you know every family is going to be different and some families you know every family has different means in terms of resources as well as values so they have to decide for themselves like how much are the parents contributing to the kids needs and wants at that stage and how much are they expecting their kids to be earning that money so i feel like or when when teenagers or you know kids of different ages earn their own money they will think a lot harder about spending it now that's true if you've given them some money as an allowance and i encourage parents to do that so kids have an opportunity to learn how to manage money but it's really true when they've worked hard for it because they know it takes a lot of effort to make money and it can be really easy to spend it can go like that so i think that working and earning some of their own money and having control over the choices that come with that so save spend share invest that is what sparks the interest in learning more getting better at it i mean some kids will understand you know investing they'll really intuitively get that oh that means my money's working for me i may not have to work as hard if i can start investing early or they might understand that certain jobs different educational pathways lead to different careers which also lead to different earnings and different opportunities in life so i think most kids are going to be interested because you can't live in this world without money and the sooner they experience that connection between earning it and spending it um the more you know the more engaged and invest in it no pun intended they'll be and you know i think naturally some kids are just natural savers i hear this from parents all the time oh my kid's such a saver he's always squirreling it away i can't get him to spend any money and then i hear the opposite oh my kids you know he can't keep it in his wallet it's just always gone you know he's spending spending so i think there's natural personality um characteristics that make kids one way or another and i think that also applies to their interest um in money but i think it's it's such an important life skill it's so basic and the consequences of them not having it like bad habits um even like stress and health consequences of not being good at good with your money even talking about that with your kids like just emphasizing that this really is an important life skill that we all need need and um you know if we want to live the lives that we want if we want to have and do the things that are important to us do you find that i'm sure you've spoken with many many many parents before observed perhaps even more than that do you find that kids financial values behaviors uh for the most part will correlate very strongly with their parents or is it actually how common is it for them to actually diverge for parents and kids to go in opposite directions i feel like they're both because some of it is just going to be hardwired it's your personality and even um you know within a family siblings can have really different values and i see that with my own kids for example so i think some of them will get passed down and will be internalized just by osmosis but your kids are individuals and they are going to um have things that are important to them that may not be as important to you and i mean i think things like education for example like families that value that and think it's really important to have higher education i think those things do get passed down but like some people might really need structure in their lives or as other people want you know value flexibility so you know and i think there's research that shows that personality traits are hardwired and they will affect um some of them will affect how we are with money but i think you hope that the values as a family that are really important to you um that your kids will absorb those and they will take them on as their own and there's another exercise in my book called the values validator that helps you determine what your top values are so again it's a series of um questions to help you tease out what's most important to you and you can have your kids do that too and you can literally see you know is there overlap oh that's and it's another teachable moment it's like an interesting conversation yeah okay on on teachable moments actually i wanted to um sort of drill into this a little bit so in your book you write and i quote you don't have to schedule a family conference to have great conversations with your kid about money opportunities will present themselves countless times in your everyday life the trick is to recognize those teachable moments and uh to take advantage of them how how can parents recognize these teachable moments in real time on the spot turn them into teachable lessons like tactically how does a parent who has not done this before or who isn't used to doing this develop a muscle to consistently recognize teachable opportunities and then turn them into memorable lessons on the fly well anytime you're doing anything financial that's that's when the light bulbs should go off so if you're at the grocery store with your kids let's say your younger kids tag along with you and you're paying at the cash if you're using debit or credit or cash talk about that explain how they're different i mean cash is disappearing right now and you know we're really mostly using digital forms of money and that's a little hard for our younger kids to understand because it's conceptual so i would still say you know if you're using cash somewhere that's a great teachable moment for for younger kids to see that um but you know the but the kids that are older that can understand these digital forms of money it really is important for them to understand the difference between a debit card which is buy now pay now and a credit card which is by now pay later as i was saying before like if they don't understand how credit card works and how often you have to pay it and what happens if you don't they can get into trouble um you know other things i've mentioned are you know if they see you at your computer going over your finances um or setting up an automatic transfer let's say from your account where you get paid to an investment account or they see you working on your investments like today my son and i were looking at my asset allocation and i was trying to explain to him like how i created the spreadsheet and how i decided what the allocation should be and you know whether i'm happy with that or not happy with that so like that was a good teachable my own because i was doing some work on that anyways and he happened to be here so it got into that like tax tax time is also a really good time too because you're kind of pulling up all your stuff you know you're getting the slips to tell you how much you made and you know other other things that go into a tax return is such a good opportunity to sit down with your kids and kind of go over things um but you know if they if they want to go somewhere and do something and they're asking you for money for that that's also a teachable moment so it's like any time money is involved in my opinion you could build it into a little bit of a lesson like you know don't go overboard like you want them to take it in and not be like oh here she goes again it's another teachable moment like no don't do that but um i think you'll feel as the parent when the time is right like when like when they're expressing curiosity take advantage of that encourage it yeah so i mean yeah i i i definitely get that and i'm just wondering like in some of the examples that you gave with your own kids tax time are you pulling the kid in or are they walking up and saying oh hey mom what are you doing and can you oh like both and with my kids it used to be like literally pull up a chair get your slips we're doing your tax return today and like i would like literally sit there with them while they use the software and put everything in so that we actually like did together but um you know my daughter called me and she was like okay uh with her job she had um there was like a group savings plan or investing plan and she was like i don't know what to pick you know how do i how do i decide which investments to buy so we you know we had a conversation about that so sometimes they're initiating it or let's say when they were going to university and they had they were um you know they were contributing to the cost but we were too so of course we had to have that conversation together and that's a really great okay let's go over the budget what are the different line items what's reasonable let's keep track of this so we can go back and say was that enough too much you know so is this like these all of these examples that you're giving it directly impacts the kid right it's like their college it's their health group savings plan whatever the case may be um is that is that really the key uh yeah i'm just trying to think like if it's i don't know if i had like a 14 year old kid let's say they're not working how do i abstractly pull them in to explain you know how to file taxes like not interesting to them right like so it's not age appropriate then that's what it's telling you like if it's not at a stage if it's not relevant to the stage of life if they're out they're not going to take it in or be interested or remember it anyways and that's what the research shows about financial literacy it should really be tied to life stage or decision that you're faced with so i'm not going to sit down with my kid right now and explain to them about mortgages because they're not going to get it they're not going to care but one day they're going to start looking for maybe a home and it will be important and we will talk about you know down payments and mortgages and fixed and variable and all the other closing you know all the costs that go along with home ownership or let's say the topic was a home ownership you know right now they're just they're renting they don't care so i wouldn't do that and and they're in their 20s so for sure you're not going to talk about that with like your 10 year old um you know you also don't want to burden your kids with some of the stressful financial stuff that you have to deal with as parents you know that's your job so you really have to think about like a 14 year old and you know what are they what do they care about what's their world all about going out with their friends school maybe the summer job or summer camp or travel whatever they're doing those are the i would i would look for my in with those things because that's what they care about that's what's important and that's what they may be saving for makes sense um how should parents handle awkward questions like how rich are we and how much money does our family make and yeah uh i guess influence their kids to be discreet if you share those exactly info so the answer is as honestly as you can stressing confidentiality and the fact that these are private family matters and not things that you want them sharing on social media but not feeling like you have to tell them all the numbers if you don't feel like it's appropriate yet and i mean i don't know if i would what if i did when my kids were teenagers no way i feel a little more comfortable now that they're in their 20s revealing more to them but i think you can still you can always talk about general principles right so even if you don't tell them how much you make you can talk about the range of salaries for the type of career you have or job that you have you can talk about the importance of paying yourself first you know taking savings off the top always sashing them away in a separate saving your investment account living almost left you can talk about needs and wants or setting goals you can always go back to um kind of first principles and even the are we rich it's like you might be honest like yes we have uh you know more than the average american or canadian or you know some families are very affluent and the kids are aware of it and if you're not honest about it they're going to find out their friends are going to tell them or they're going to google it so better to be honest but you have to make sure that what you're telling them is is age-appropriate like always filter it through that and keeping in mind you know their temperament too like some kids are mature and they can handle a lot and others you know you're you really know your own kid and how they're going to deal with that information okay um sort of on sort of related also to um values i guess um one of the most important traits that um kids need to become i guess in your words responsible independent and money smart is the ability to control impulses right we talked about this a little bit uh earlier and delayed gratification but you know that ability is hard to cram down a kid's throat it's hard to teach and also you know runs counter to the kind of consumption advertising type of exposures that kids are constantly getting exposed to which you cannot shield them from any any tips for parents on how they can help their kids strengthen their impulse control and delayed gratification and even see it as a virtue rather than an unpleasantness i know yeah because you don't always want to be saying like no no no you can't have this you can't have that um yeah have a few tips uh the first is you can encourage them to get a job if they don't already have one to help pay for some of the things that they want because as i said they're gonna work you know hard for that money and it's just gonna feel it's gonna feel harder for them to spend it if they're spending your money it's just it's not real it's fake it's funny money so they don't appreciate it um the other thing is philanthropy as a family or maybe they do it with their friends but it just really has it's so valuable because it really does put things into perspective because kids can get really involved in their own worlds and wrapped up in their own uh reality and they don't always take the time to appreciate that you know not everyone is as fortunate as they are and i also think as going back to the role modeling as parents we need to model an attitude of gratitude and to show our kids that we're grateful for what we have and to not always be talking about oh i want i want a new car and i need this and a better this and a better that to to show you know appreciation for what you have i think that kids will pick up on that um and and there's different ways to do that like i have friends that they go around the dinner table every once a week like on friday nights and everybody shares one small win or highlight from their week or thing that that they're grateful for and it's just like a nice a nice focus on the positives and you know other people use gratitude journals and i think those are really valuable as well um you know i think as parents too we have to help our kids become media savvy and educate them that the media is trying to convince them that their wants or needs but they're not they are mostly wants and just remind them of the difference between these and once and i feel like with the pandemic it was a bit of a reminder that was forced on everyone because while things were locked down there was very few wants that we could really have and it was all about just knees and everyone was concerned about at first especially like okay i just want to make sure i can cover my needs so just needs and wants is it's just i don't think that ever gets old and i think even young kids can get that that something isn't nice to have as opposed to uh have to have like we have to live somewhere we have to eat and we have to have like some clothes to wear but we don't need to go to restaurants we don't need the latest toys and video games or vacations those are all nice to haves and you have to prioritize so but it's tough and it's you know as tough for parents too like there's so much coming at ya and there's a lot of fomo out there don't you think yeah totally totally and i mean kids are just not as just well prepared to uh filter signal from noise how how should parents um think about whether to pay their kids for things like chores or getting good grades and if you do decide to pay them to do certain things how do you make sure it doesn't like set an expectation for paying them to do every little thing and that without paying them you can't even get them off the couch i think it does set that expectation i think that's one of the problems um yeah this debate about how to use an allowance some parents want their kids to earn their allowance they really want them to do some things to earn that some chores others feel like the chores need to be done out of sense of family responsibility and everyone needs to pull their weight and they can get their allowance as a teaching tool for how to manage money i i think you can do a bit of both i think you can give your kids like a minimal allowance with the expectation that they do that they pull their weight around the house and if you want them to earn then you can ask them to do things that kind of go above and beyond that you would maybe pay someone else to do and if they're old enough they can they can get jobs as we talked about but i think it does set that expectation that that everything comes with a price i mean no one's paying me to empty the dishwasher or take out the garbage or all the tons of things i do around here and i think it's it's important for for kids to help out i really i really feel strongly about that and like i think sometimes we do it because we need leverage as parents and sometimes the only leverage you have is like okay i'm not you know you don't you you haven't cleared the dishwasher once this week you're not getting your allowance like i get that and it is going to happen but it will deprive them of the opportunity to manage money if you withhold their allowance and i think it's so much more motivating for them to just understand that running a house holds a lot of work and if they don't pull their way it's just more work for you and it's not really fair so are there like guidelines that you either use yourself or you coach other uh parents on regarding like these type of i guess tasks or behaviors we do not pay for because you should just do them uh and these other types might be okay opportunistically uh yeah you know what i mean like i don't know it's kind of spitballing here but if i if my kid was like i need to be paid to earn good grades i'm like dude it's for your benefit you know how do you how do you how do you draw bright lines okay well that's a whole other issue is the pain for grace which i really don't believe in because you said earlier like how do you get your kids intrinsically interested in money well how do you get them intrinsically interested in their futures i mean they should be working hard in school because it's it's like a you know prerequisite in order to get the grades they need to get into higher education and therefore be able to earn and have a life that they want to have well i think that works if you are you grew up poor have a chip on your shoulder you you don't need extra money but if you're like in an affluent neighborhood and yeah you're mediocre it's like well life still seems about the same right so um i guess yeah but that's why i'm kind of very curious about this question like when do you use money uh versus when you draw brightline and say no you need to do that because that's the right thing to do yeah i i would say if you have to pay someone else if you would normally pay someone to do something and every look every i don't want to say that there's a prescription for this right because every family is different in terms of their means their values and all that stuff so some families really are very self-sufficient and they don't pay they don't pay a gardener to cut their grass they don't pay a mechanic to change their tires they do it themselves and that's a value and maybe they have the skills and stuff so there's really no rules but i would say if i had to pay someone to do something um like let's say detail my car i don't think i would expect my kid to just like do that as part of their allowance that's a lot of work it's not really fun or fair so i would pay them to do something like that but i'm not going to pay one kid to babysit the other kid and i know that there's some families where like the siblings are like i want to be paid if i have to stay home and babysit my my baby brother and i'm like no that you gotta just do that as part of pull your weight in the family emptying the dishwasher like even like helping with dinner uh whether like you know my kids were older they were cooking and they were helping you know clean up after dinner keeping their own rooms neat like come on i'm not going to pay you to do that if you want to live like a slob fine like i'll shut the door and i won't go in there but i'm not cleaning it and i'm not paying you to do that so i kind of use that like if i have to pay somebody else to do it i would maybe pay them if it goes above and beyond but if it's like day to day household stuff forget it do it you're gonna do it one day for your own household you might as well learn what it's all about okay um i wanna also talk a little bit about budgeting um you talk about this in your book a lot and we've discussed it as well in passing here in your book you write again i quote teens may not have much overhead if they live at home because you're still taking care of most of their needs as a result they may not know what their lives really cost and a mistake that teenagers often make especially if they don't have savings goals is to use all of their income just on discretionary spending yeah and you mentioned that as your kids get older it's a good idea to sit down with them to make a budget to ensure they start internalizing more of the cost of their day-to-day life uh how do you do this like literally and tactically how can parents introduce their kid to budgeting and teach them how to do it and take an interest in it and do it seriously like and including like when is a good age to do this yeah so for teenagers you as a family have to decide like how much of your life are you paying for of their story of their lives are you paying for and how much do you expect them to pay for and how are they going to go get a job is that realistic some families are like no i want my kids to just focus on school and sports or whatever they do and like you know we're okay to pay for all that stuff you know that's fine you know but i think that as i said kids will find it much easier to spend your own money than money they've worked for so teenagers have a pretty simple budget it's like food like eating out entertainment transportation uh maybe a bit of travel there's it's not complicated yet because they are still living at home i mean i don't know a lot of parents that charge their teenagers rent or make them chip in for the utilities or you know cell phones that's a whole other story so me a lot of parents are like you know i want you to be involved with your cell phone so you have to pay for some of it or all of it figure out the plan that makes the most sense for how you're going to use it what it costs compare you know that's a really actual great teachable moment because they care a lot about their phone right they want a good phone they wanted to do stuff so that's a really good way to tactically to get a kid involved and invested in a budget specific like budget item i mean they also need computers for school often and just getting them involved in those conversations and understanding what these things cost and it's really important and even just like the other items like transportation like are they using public transportation are they do they have a car are they using uber like they're all very different or they're walking everywhere different cost points and you have to talk about you know the last thing you want is that your kid has access to your credit card on their phone and they're using uber all the time because that gets so expensive and they're not paying so they don't see it or care like those types of conversations like how what's their day-to-day like what what's what are their you know weeks look like weekends where are they spending money what's realistic and like who's going to pay for this are they are you expecting them to to work and getting really into the details and then as you say a budget is a living breathing thing so if it's not working if it's if it's off you're gonna have to go back and revisit it and see where so there are a lot of high earning professionals in my audience and and one of the fears that i think many higher income affluent families have about raising their kids is making sure their kids don't turn out to be spoiled entitled brats i know uh there are examples of this you can see in the media any any advice on actions behaviors parents in this situation can take to make sure their kids don't take things for granted and develop a sense of entitlement about money yeah i think you're right i think most parents want their kids to have a sense of purpose not a sense of entitlement even if they grow up with wealth and privilege and you know that's not always easy to do because sometimes it's just easier to throw money at something you know taking the time to teach your kids is it's work you know it does take time it does take effort it but it is worth the effort because otherwise they will not learn for themselves and they will find it easier to spend your money and they just don't seem to have an appreciation in the same way so i think it goes back to what we were saying earlier like even if you're giving them money for allowance like make it reasonable don't make it excessive so that they can like live large um encourage them to get a job so that they can get that sense of what it takes to earn money but also like this the satisfaction of putting in a heart like a good day's work where you do something that you're proud of because that is you know everybody needs a sense of purpose even if if you have money so i think for them to start to figure out what they might want to do um start to cultivating their interest for career and stuff by by working and getting exposed to that is really important um again the philanthropy so some wealthy families put their kids on you know the family the board if there's a family trust or some kind of family office they get involved with governance of that and they get a better sense of uh you know some of the causes the family is supporting so just gratitude in general i feel like it goes back to that like giving back uh discourages that spoiled selfish attitude and just reminds them to put things in perspective and be grateful for what they have i mean it isn't easy model it yourself like model a good work ethic so your kids see that that you you know like high earning professionals work very hard right like it nothing comes easy and i'm sure your kids notice that and you can be you know those are conversations you want to have about work with them like how hard they work and why they do it i mean i think setting goals is so important goals that are tied to their values that are really meaningful will help them delay gratification and not always be like satisf like you know having instant gratification and just trying to get all of their needs and wants met instantly like they understand that you have to work for work towards something uh and i guess related to that uh there are folks in my audience who either are already early retired uh or yeah were like aggressively pursuing fire financial independence retiredly i don't know if you've encountered folks in this community in your work uh they might have a different set of considerations when it comes to raising their kids if they if they have them because one for one thing they're not working right they're like doing other stuff um and so if the kid at an impressionable age sees that well how come mom or dad doesn't actually ever seem to be working and yet like i'm supposed to work and like work really hard how do you um any advice i guess for for parents to uh navigate that seeming uh contradiction talk about it with them because first of all you had to have worked hard to have gotten to that point where you can retire early so maybe your kids were really young when you were doing that and they don't remember it but have those conversations ha like why you did it how you were able to do it you know what it took you know are you enjoying it is it everything you thought it was gonna be um and then maybe how you know is this something that they could see for themselves um do they see themselves having a traditional job uh corporate job do they see themselves have you know having more flexibility and i think a lot of from my understanding like the fire movement like you also part of it is the income like anything in life is the income side but the other half is the expense side so some people are able to do it because they keep their expenses really low right um they're able to minimize their their wants and needs and live on you know maybe less than someone who has a corporate job because you know how lifestyle just inflates sometimes with the money that you start to make so that's a lot of conversation you know maybe your kids are cool being minimalist and living a certain way or maybe they're not you know maybe they want a more traditional life so i think just talking about it and again it goes back to your values like clearly if you've chosen that path it taps into something that is a deep value for you um of independence and maybe wanting to accomplish something beyond just like career success because i'm sure people that retire earlier they're not like all hitting the golf course every day like sometimes they move towards something else like if you think of bill gates uh you know who retired from um from microsoft as ceo fairly young he started the foundation and was focusing on other things or like jeff bezos just retired from amazon right and i'm sure he's not like retired he's just focusing on other things so i think that sense of purpose can be cultivated and talked about and and it is it does come out of what we're passionate about what we value is that what you find when you talk to people that have done this yeah i mean for the most part most people who like sort of quote unquote retire early definitely don't just go sit on the beach they usually are interested in other things and so they just spend their time productively on other things and that might be something that's like productive to society like um uh i don't know like doing something more civically oriented or it could just be like something for personal fulfillment like learning a bunch of languages or whatever the case may be but very few people tend to just sort of you know sit on their butt on a beach for sure yeah like not at a you don't see that very often especially if they retire young it just seems like people have like these encore careers so they retire from their first career and then they have like their second career so even that's an interesting conversation to have with your kids like how you chose your first career and why you chose to leave that and pivot towards something different all right robin well this has been really insightful i've really enjoyed chatting with you where can listeners find out more about you your book what you're up to yeah thanks andrew so the book is called as you said at the beginning the wisest investment teaching your kids to be responsible independent and money smart for life and you can find that on amazon i also have a website called thewisestinvestment.com and you can go there you can also get the role model self-assessment on that website i have another website which is robintowb.com and tobias taub robin with an i and there i have the values validator that we also talked about today so people can go to that website and get the validator if they're curious to discover what their values are and what their kids values are and that also has more information about some of the other work i do including the speaking so yeah please you know also on social media all the usual places and they're on those websites all right well that's excellent well we'll definitely link to all those resources in the uh show notes and uh look forward to sharing that with uh with folks soon thank you thank you so much for having me yeah thanks so much for joining us take care