5 Key Financial Lessons to Teach Your Kids
Cameron Huddleston, award winning journalist and author of Mom and Dad, We Need to Talk: How to Have Essential Conversations with Your Parents About Their Finances joins Tim Ulbrich to talk about five key financial lessons to teach your kids.
About Today’s Guest
Cameron Huddleston is the author of Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances. She also is an award-winning journalist who has written about personal finance for more than 17 years. Her work has appeared in Kiplinger’s Personal Finance magazine, MSN, Yahoo, USA Today, Chicago Tribune and many more print and online publications.
Summary
Cameron Huddleston, personal finance journalist and author of Mom and Dad, We Need to Talk: How to Have Essential Conversations with Your Parents About Their Finances joins Tim Ulbrich back on the podcast to dig into 5 key financial lessons to teach your kids. Cameron and her husband have tried to instill these lessons in their own children who range between the ages of 8 to 15. Cameron shares that she wasn’t given much financial education growing up which caused her to make some mistakes with money. She wants to openly communicate to her children about money so that they can form a healthy relationship with it. These lessons include: money is not a taboo topic, money must be earned, make saving a priority, it’s ok to spend but don’t waste your money on junk and be grateful for what you have.
During this episode, Cameron shares several tips that help to bring these lessons into your daily lives. For example, she suggests talking to children about money from a very young age so that they can form a healthy relationship with it and learn how to use it wisely. When they are younger, you can explain to them that money is used to buy things, like food or toys. As they get older, this can turn into talking about how to spend money and following a budget. Cameron also shares that her children have financial chores, in addition to chores that they don’t receive money for. She gives her older two daughters money monthly and her son, the youngest child, an allowance weekly. They are encouraged to put this money in three different jars to either save, spend or give. This helps them think about what they want to use their money for and shows them what happens when they use their money to purchase something.
Cameron discusses speaking to your children about money in the last chapter of her book Mom and Dad, We Need to Talk: How to Have Essential Conversations with Your Parents About Their Finances.
Mentioned on the Show
- The Pharmacist’s Guide to Conquering Student Loans by Tim Church, PharmD
- Mom and Dad, We Need to Talk: How to Have Essential Conversations with Your Parents About Their Finances by Cameron Huddleston
- CameronHuddleston.com
- YFP 108: How to Effectively Talk with Mom and Dad About Their Finances
- What I Teach My Kids About Money by Cameron Huddleston
- YFP Planning
- The Compound Effect by Darren Hardy
- Email Cameron Huddleston: [email protected]
- Follow Cameron on Instagram (@cameronkhuddleston)
- Follow Cameron on Twitter (@CHLebedinksy)
Episode Transcript
Tim Ulbrich: Hey, what’s up, everybody? Welcome to this week’s episode of the Your Financial Pharmacist podcast. And I’m excited to welcome Cameron Huddleston back onto the show. Cameron is the author of “Mom and Dad, We Need to Talk: How to have essential conversations with your parents about their finances.” She’s also an award-winning journalist who has written about personal finance for more than 17 years. Her work has appeared in Kipplinger’s Personal Finance magazine, MSN, Yahoo, USA Today, Chicago Tribune and many more print and online publications. Cameron, thank you so much for your willingness to come back onto the show.
Cameron Huddleston: Thank you so much for having me.
Tim Ulbrich: So we had you on the podcast way back in Episode 108 to talk all about your book, “Mom and Dad, We Need to Talk,” and that was a great conversation and you provided many valuable tips and thoughts around having this sometimes difficult conversation or conversations with our parents. And while today we’re not going to talk about having these conversations with our parents, we’re going to flip the script and talk about having these conversations, these important money conversations, with our kids. And the final chapter of that book, Chapter 17 in “Mom and Dad, We Need to Talk,” was “Pay it Forward. Start Talking to Your Kids.” We’re going to use that chapter as well as an article that you recently wrote that’s on your website and we’ll link to in the show notes titled “What I Teach My Kids About Money” to use that article as a framework for our discussion today. So before we jump into the five key things about money that you’ve tried to share with your children, tell us a little bit more about your family as I think that context will be important to our discussion here today.
Cameron Huddleston: Sure. So I have three kids. They range in age from 8 to 15. Actually, my 15-year-old is turning 16 in August.
Tim Ulbrich: Oh gees.
Cameron Huddleston: I know. My 13-year-old turns 14 in July. And so two girls, one boy, all very different in the way they think about and handle money, which makes it interesting and a bit of a challenge when it comes to teaching them about money. And this should be my key warning to parents of children who are still young and just kind of starting to figure things out that no two kids are alike, which I’m sure every parent has figured out. But no two kids are alike when it comes to their approach to money. I mean, even if you’re in the same household and you’re talking about the same things, it just, it becomes very apparent from the time children are young how they view money differently.
Tim Ulbrich: Yeah, and I think that’s fascinating, Cameron. You know, something my wife and I talk about with our four boys — and I would say we’re, ours are a little bit younger, so 9 down to just over 1. So obviously we’re not talking with our 1-year-old yet about money. But what we’ve realized is, you know, with our three older ones just how different — I mean, to your point — just how different they can be in so many different areas but even when it comes to things like questions they’re asking about saving and spending and how we are spending our money. And I like to think that we’ve been relatively consistent in our household. But nonetheless, you know, you take their different personalities and I think that can lead you to a different outcome with money for each and every child but also how you approach this topic. And so we’re going to talk about five key things about money that you’ve tried to share with your own family. And we hope that that will provide a framework for those that are listening to be able to apply some of these principles in their own households. So before we jump in to these five things, I’m curious, you know, we talk a lot on the show about when it comes to two individuals, two spouses working together on a financial plan, how important that communication is and how important it is to be on the same page and to have good conversations about money. So were you and your husband both on board with these five points? Was it something that you were leading more? That he was leading more? Talk to us a little bit more about the dynamic and the vision for teaching your kids about money as it relates to you and your husband.
Cameron Huddleston: Sure. I don’t think we ever sat down and started making a list of things that we wanted to teach our kids. It just happened naturally. I do think that my husband and I are pretty much on the same page when it comes to money. I feel fortunate that we don’t fight about money, which is something that’s so many couples do. We’re similar in our spending patterns. We’re similar in our beliefs about money. We did come from very different money/financial backgrounds, but I don’t think that’s really created a lot of an issue for us. It’s just I think being on the same page has helped us convey a consistent message to our kids. There was one area where we had a bit of a disagreement, and we can kind of get into that because that’s one of the points I make — and I know you’re referring in particular to a post I had on my blog about what I teach my kids. And so — and that comes, that point where we have a little bit of a difference of opinion is when it comes to allowance, which is what we — and we can discuss that.
Tim Ulbrich: Sure.
Cameron Huddleston: But yeah, I feel like we do take a similar approach that’s made it easy when it comes to teaching our kids about money and instilling a set of values about money.
Tim Ulbrich: Yeah, and as you mentioned, the article in reference here is “What I Teach My Kids About Money.” We’ll link to it in the show notes and that will be the framework for our five points about money and teaching kids about money. So let’s jump in. No. 1, money is not a taboo topic. And you mention in your blog that your middle child asked you why people think it’s bad to talk about money. So tell us about that conversation, how you responded, and what your family dynamic is in terms of how you approach and how you speak about money as a family.
Cameron Huddleston: So a few years ago, my middle daughter, who might have been around 11 or so at the time, out of the blue, she comes up to me — and I remember I was sitting in my office — and she says, “Why do people think it’s bad to talk about money?” And I was a little bit taken aback by the question because I was wondering what prompted her to ask that.
Tim Ulbrich: Yeah.
Cameron Huddleston: And I know why she did because we talk about money all the time, so in her mind, there’s nothing wrong about talking about money. Someone must have said something at school or maybe she saw something on TV, I don’t know. But when she asked me that, I wanted to explain to her in an age-appropriate way why people think talking about money can be a bad thing. I actually used something I had heard from a financial psychologist I know. And what he had explained to me and what I told my daughter was that the reason people often are reluctant to talk about money or they think it’s a taboo topic is because there’s a lot of shame around money. And I explained to her that some people are embarrassed if they’re having a conversation with someone else about money that maybe they make more money than the other person or they’re embarrassed because they make less. And that’s what can create the awkwardness, having more or less than someone else and you don’t want to feel like you’re bragging about how much you have or you don’t want to feel like you’re not doing as well as another person. So that’s what I explained to her. And I guess she kind of processed it in her little head and went on about her way, but like I said, we talk about money all the time. We’ve been talking to our kids about money matters since the time they could talk. Of course, when they were 2 years old, we weren’t talking about mortgages and debt and interest rates and that sort of thing. You know, just explaining the basics: This is money, this is a coin. They would go with us as we run errands and using that as an opportunity to explain things cost money. We have to earn that money to pay for those things. We have to make choices about what we’re buying. These were not conversations I had in my family when I was growing up. We didn’t talk about money at all. My dad was one of those people who said, we don’t talk about money. It’s not polite. And so I wasn’t raised with a good personal finance education from my parents. I had to figure out a lot on my own. When I got out into the real world, I made a lot of mistakes. And thank goodness I became a personal finance journalist because it’s taught me everything I know and needed to know about money. And I don’t want my children to become adults without a strong financial foundation. That’s why my husband and I have been talking to them since the time they were little about money so they can learn to use it wisely and they can have a healthy relationship with it.
Tim Ulbrich: So a couple things I want to unpack there that you said. You know, the shame piece really stands out to me because it’s almost like the baseline that, you know, we often feel shame around money and talking about money, typically, as you mentioned, because either the feeling that we may have more or less than somebody else, so there’s this natural point of comparison. My question that I’m thinking through is like, where does that come from? Is that innate human behavior? Is that because of the society that we live in? Is that because of the money scripts and the conversations that we were a part of or not a part of as a child that we may or may not even remember those? Like what are your thoughts on why even young children may begin to pick up on some of that in terms of this concept of shame around money and conversations of money?
Cameron Huddleston: I think it’s more the latter two reasons that you mentioned: society and those money scripts. I think we tend to view our self-worth in terms of how much money we have or don’t have, unfortunately. And so we think people who are wealthy are somehow better and those who are poor aren’t as good. And I wouldn’t say this is universal, but I would say that this, this idea is engrained into a lot of our heads. And then like you mentioned, the money scripts. If you grew up in perhaps a lower income family where, you know, people were always talking about how they wanted more money but then perhaps disparaging people who were making a lot, referring to them as, oh, the rich or greedy, it does affect the way you think about money when you get older. Maybe you want to do well and improve your lot in life, but there’s that idea in your head that if you become rich, you’re greedy and you’re somehow bad. And those things we don’t often realize are there deep down and can help us or not. I shouldn’t say help us — can lead to bad relationships with money and these negative thoughts about money that lead to this idea that we shouldn’t be talking about it.
Tim Ulbrich: And I struggle as a parent, Cameron. I struggle in conversations with my boys trying to strike the balance — and I don’t know if I’m doing it well or not, but I feel like I tend to have a frugal mentality and mindset. And what I worry is if that’s what they hear me talking about all the time, I don’t want them to have that restrictive mindset around money. But I also want them to be conscientious in terms of how they spend and alternatively, if they hear about the wealth-building and the growth side of it, I don’t want them to lose sight of there’s hard work and effort that goes into earning money and to have that association between work and money. So I feel like probably, you know, myself and many others that are listening may not have some of these conversations either because they don’t know how to have them or out of fear of what they’re saying may be developing a mindset that they already have or they don’t want their children to have or baggage that’s being passed on from one generation to another. So when I hear you say that “we as a family” talk about money all the time, like give us some tips or strategies. Like how is that conversation just a regular conversation in the household? Is it specific moments? Is it around the dinner table? Is it when you’re out and about at the stores? Like what does this practically look like that we as parents can better engage our children in this conversation?
Cameron Huddleston: So obviously it’s going to depend on the age of the child. When your kids are young, the least you want to do is introduce them to the concept of money. This is a coin. And you want to wait until your kids are at least old enough not to stick those coins into their mouths and swallow them.
Tim Ulbrich: I did that as a child, so yes.
Cameron Huddleston: Right. All kids do it. They all do. They want to pick things up and stick it in their mouths. So you know, when they’re maybe 2 or I would say perhaps even 3, probably 3-4 years old, they’re less likely to stick those things in their mouths. This is a coin, this is money. We use it to buy things. This is paper money, a dollar bill. And here we are, we’re at the store, we’re at the grocery store, we’re buying things. And so often, we will use a debit card or a credit card. So explaining to your kids, you know, I just put this debit card in. I put this credit card in. But it’s still money. The money is coming out of my bank account. That’s something that would come up more when they’re 5 years old or so. 3-4, this is money, we have to earn the money, we use it to buy things. You know, and letting them see what it is. Let them touch it. Maybe even, you know, giving them your spare change and letting them start collecting that money in a coin jar or a piggy bank, something along those lines. You know, and then as they get older, the conversations can be more advanced, talking about spending decisions. You go to the grocery store, they’re begging for — or you go to Target. Let’s use Target as a good example because they sell everything.
Tim Ulbrich: Everything.
Cameron Huddleston: And so they want a toy — everything. We all know that we spend too much at Target. You go to Target, and the kids want a toy. And that’s an opportunity for a conversation, “while it’s great that you want a toy, but we are here to buy this. We don’t have money in our budget,” or, “This is not something that we need to be buying right now. You get gifts on your birthday, you get gifts on holidays.” Making those things clear. You know, I would tell my kids before we went to the store so there wouldn’t be a meltdown. “We’re going to the store to buy this. We are not going to buy you a toy.” Now that my kids earn their own money through allowance, I tell them, if this is something you want, you use your money to buy it. And it’s funny how quickly —
Tim Ulbrich: That changes.
Cameron Huddleston: They don’t want that thing so much anymore.
Tim Ulbrich: That’s right.
Cameron Huddleston: No, I want you to get it for me.
Tim Ulbrich: Yeah.
Cameron Huddleston: So it just — really, our conversations are part of our daily living and them — you know, they become, like I said, they do become more advanced as your kids get older and you have to talk about more serious things like buying a car and whether that’s something you expect them to pitch in and help you do. Do they have to pay for gas? Do they have to pay for insurance? Do they have to use their allowance to pay for things they want? Do they have to use it to pay for things they need? It just — you know, a friend of mine who is a financial coach said she had a client who told her that she didn’t talk about money at all with her kids because she didn’t want it to stress them out. She wanted them to be kids. And I thought, this is so unfortunate. You’re missing a really good opportunity to help your kids develop a healthy relationship with money. If you don’t talk about it at all, you create that idea that it’s taboo. And then as they get older and they haven’t had that experience with money, they struggle to make smart decisions.
Tim Ulbrich: Yeah, and I think going back to your Target example, I think it’s really important — in my opinion — to teach kids at a young age and all throughout the concept of opportunity cost. Obviously I’m not going to use the word “opportunity cost” with my 5-year-old, but getting them to understand like if we’re at Target, you know, I try not to use language like, “We can’t buy this,” or, “We can’t afford this,” but rather because, as you mentioned, because of the budget or “We’re here to do this,” or, “We’re choosing to do this and we’re not buying this because we want to be able to do this.” So really, I think that tradeoff concept is so important. And as you mentioned, I think when it’s our own money and our own allowance, that becomes a little bit more clear and obvious. But when it’s not their own money, that may not be as obvious. So No. 1, money is not a taboo topic. Really great introduction and conversation there. No. 2, money must be earned. So you alluded to this in terms of the discussions you and your husband have had, but talk to us about, you know, the options of either chores or allowance and how you made that decision and how that ultimately has played out in your own home to be able to connect this concept of money and work and earning that money.
Cameron Huddleston: So because I have been writing about personal finance so long, I have written about the topic of allowance on several occasions. I’ve interviewed a variety of experts. And there are a variety of approaches to allowance. One of them in particular is to give your kids financial chores. So you give them a certain amount, and then they are expected to use that money to pay for certain things. So the allowance is not tied to the chores you do, but you have to use it to pay for certain things. Initially, I really liked this idea and discussed it with my husband. And he felt very strongly that our children’s allowance should be tied to their chores because in the real world, you have to work to earn money. And he wanted them to learn that from a young age. Money is not just handed to you; you have to work. Now I know some people will say, “Well, if you tie the chores to money then you’re going to end up having more fights and the kids aren’t going to want to do the chores, they’ll just say, ‘Well, fine, I’m not going to do it. I don’t care if I don’t get any money.’” I do think it’s important that kids have to do some chores without getting paid for them, just because they’re part of the family.
Tim Ulbrich: Yeah.
Cameron Huddleston: And you have to pitch in when you’re part of the family. So there are some things my kids are expected to do, and they don’t get paid for it. But we have a spreadsheet that we have printed out, and it hangs up on the refrigerator, and it details what the kids are supposed to do and what — the way we do it is they get penalized if they don’t do those things. So they get a certain amount each month for my daughters, each week for my son because he’s younger. And if they don’t — so for example, if he doesn’t make up his bed every day — and he doesn’t have to do a great job, he just essentially kind of has to get the covers up and not leave it looking sloppy — he loses $.25.
Tim Ulbrich: OK.
Cameron Huddleston: And I will tell you, it has worked incredibly well. Once we instituted that system, things got done around the house. Shoes were not left out because with my son in particular, who was always leaving his shoes by the sofa, his room was always a mess, and when I would ask him on the weekend, it’s time to clean up, oh no, I can’t do it. You have to help me. Once he was in charge of doing all these things and he knew that he was going to lose money because he’s very motivated by money, he was on top of it. Just the other day, he said to me, “Oh, Mom, I forgot to make up my bed two days in a row. I’ve lost $.50.” And I was like, “Well, you need to make yourself a to-do list that says, Start the day by making up my bed, so that you know that you do it.” It has not, fortunately, caused fights in our household. The kids are willing to do their chores. They know if they don’t do them, they’re going to lose money. So my son, he gets his payment every week in cash. He has a choice of putting it into a Save, Spend, or Give jar. And I let him make the choice because when you’re older, you have to make those choices. Now I will tell you he has raided some of his Save and Give jars so that he could spend some money. And he looks back and he says, “Oh my gosh, I don’t have any money left.” And that’s a lesson that he has learned. My daughters, they get it monthly just because they’re getting a larger amount of money. But it works for us. That’s not to say it’s going to work for everyone. And I think it’s important to figure out a system that works for you. So if you feel strongly that money should be earned, then you can have an allowance that’s tied to chores. If you don’t like that idea, you can use, I don’t know, the financial chores system. The key is to give your kids their own money so that they have experience using it and making decisions with it.
Tim Ulbrich: And there’s something you said there that really stands out that I want to make sure we dig in for a moment here is that your son being younger, you had more frequent moneys that were given and it was given in cash, right? I think that’s really important at a younger age that there’s not a long time period, that they can see that immediate connection between the work that is or is not and the money that is or is not earned. But I also think it’s important as they get a little bit older that you give them a little bit more leeway and by increasing some of that flexibility, it also puts some of that responsibility on them to manage over a longer period of time. So for example, you get paid on the first of the month or however you do it and somebody wants to buy a really nice new pair of shoes. And now they’ve got 30 days left of the month where they have no money left. Like that’s something that we have to reconcile — we have to reconcile with every month, right, in terms of how we balance that per month and then obviously eventually even over longer periods of time. So I’m assuming, was that intentional, both the time period as well as the mode of like cash or non-cash? Talk to us a little bit more about that.
Cameron Huddleston: Yes. Yes. And so with — well, my oldest has a bank account. We set it up last year. She actually got paid for a job. She worked for a week at a local camp here helping out, and they gave her a check. And so we opened up a checking account for her so she could deposit that check and put money in there. My middle child, who was — let’s see, she was 12 at the time. My oldest was 14 when we opened up that checking account. And so I was still paying — well, still am paying my middle child — in cash. We wanted to switch her to a checking account, but with the pandemic, we haven’t been able to go to the bank and I couldn’t open an account for her online because of her age. She, at least with the bank we use, she needed to be 16.
Tim Ulbrich: Right.
Cameron Huddleston: And to be honest, I haven’t checked to see if the banks have actually opened their doors. But when I was checking before to see if I could set up an account for her, they were closed at the time. She very much wants to have a bank with her money being deposited directly into the checking account I think most likely because she wants to have that debit card so that she can do online shopping, which her sister has done some of. And what I will tell you too, this is really interesting and I had read about this and I’m sure you probably have too. You know, studies show that when you pay with plastic, you don’t feel the pain of parting with your money as much as you do when you hand over that cash. And I’ve watched it firsthand with my oldest daughter, who is a natural saver. She’s such a tightwad, which is probably a good thing. But sometimes, she’s so stingy to the extent that just it pains her to make decisions about spending her money when it was cash. Since she’s had this debit card, I have found that she’s a little bit more willing to spend. And she will admit that too. So my middle child, who is a bit more of a spender naturally, I know that when she does get that debit card, she’s going to want to use it to spend more and will not hang onto her money as well as she has been doing. So it’ll be interesting to see what happens once we finally get a bank account open what she does with that debit card.
Tim Ulbrich: I’m so glad you brought that up because I’ve experienced something similar with my oldest where when we opened up an account for him, it went from, you know, I got this $50 cash bill for my birthday to now you put it in this online virtual world that I — like he almost viewed it as he like lost it. Like it doesn’t exist anymore, it’s not physical anymore. And so there’s a great conversation to be had there. But I think this nuance between the emotional and the behavioral side of the cash in hand versus just the credit or the debit card and having those conversations — I’ll never forget one day, I was in the grocery store. And he was I think 5 or 6 and one time we were at the checkout line, I swiped my card and he made a comment, something along the lines of, ‘Oh, so if you need something, you just swipe your card and you get it.’ And I was like, oh wow, we’ve got some work to do, you know? But I think thinking of it through the view and the lens of a child and how they observe — and obviously I’m not suggesting that you have to go out and buy cash for everything, but using some of those moments as a conversation starter to teach some of those important differences and principles. So that was No. 2, money must be earned, different ways certainly to do that. No. 3, make saving a priority. So how do you explain the importance of saving money to children? You know, I think it’s such a difficult concept because there’s a natural tendency to, you know, yes, if I can connect that work to money, now I want to spend that money on something I want. So how do you explain the importance of saving money to children? And is there a certain age at which you think that conversation begins to be fruitful?
Cameron Huddleston: So if you’re paying your kids an allowance or they’re earning an allowance if you want to put it that way, I think it’s a good idea to start at that point of encouraging them to save by having those Spend jars, the Save jars, the Give jars if that’s something important in your family too so that they’re making those decisions from an early age. You know, how much of my money do I want to set aside for the future? How much do I want to give to help others? So as soon as you start that allowance system, saving should be a component. Now with small children, the idea of saving, say for a car when they’re 16 or saving for their college tuition, that’s too abstract for them. And it’s too far out in the future. I feel like with younger kids, one of the easiest ways to get them to understand the concept of delayed gratification is to — and this might sound contrary to what you’re trying to achieve — but to encourage them to if they want to buy something, to save up for it. So because that’s more tangible to them. And it’s something that’s a little bit more exciting than thinking about saving for a car when they’re 16 years old. So like I said, with my oldest, she’s a natural saver. And it’s just, it’s very easy for her to hang onto money. We would give her change, our spare change when she was little. She would get cash from her grandparents for birthdays, and she hung onto it and hung onto it. And when she was — oh gosh, she was in elementary school, early elementary school. She had enough saved to pay for about half of an iPad. And we pitched in the other half as a gift for her. My middle child, as soon as she got money, she wanted to spend it. And so we had to work really hard with her to tell her, “Look, what do you want more? Do you want these little trinkets? Or would you rather save your money to get something that you really want, this toy that you’ve had your eye on?” So we used that initially to motivate her. And so once she got in the habit of saving up to get something she really wanted, saving just became a more natural habit for her. She doesn’t want to spend her money all the time now as soon as she gets it. She has amassed a decent amount of savings that she’s kind of hanging onto. And once she sees that money accumulating, she doesn’t want to part with it as easily anymore. Because then that means she’s going to have less money. Both of my daughters, when I told them, “Look, you’ve got the money. You can pay for it.” They’re like, “But no, then I won’t have as much.” My son has been more of a challenge. He is 100% a spender. And he very much — and we can get into this because this is one of the things I mentioned too in that article — he very much wants what his friends have. And so when he gets money, he wants to spend it. And we’ve had to work harder, and fortunately I’ve had my two daughters who’ve been trying to pound this message into his head too — “Hey, why are you spending your money on these toys? They fall apart so quickly.”
Tim Ulbrich: Yeah.
Cameron Huddleston: And he’s had to learn that lesson a few times. He spends it on something, it falls apart, and then he’s upset, he regrets it. So we are making progress, slowly but surely.
Tim Ulbrich: Yeah, and just a great example there with the three children, back to our conversation at the very beginning of how different this one principle can be applied and should be applied and customized in three different ways. And I really like what you said, Cameron, about this concept of saving, having them save up to buy something that they want but in the shorter term and how different that is than having them save and put money in a long-term savings account or thinking about college or cars or things that are far off, abstract and may lose that motivation. So you want to have some of that yes, we’re teaching them to save but also want them to see the rewards that happen through that saving process as well. So you mentioned this a little bit, but No. 4, it’s OK to spend but don’t waste money on junk. So going back to the example you just gave with your son and your daughters, helping guide him a little bit, how do you as a parent, how do I as a parent, you know, strike this balance between you need to learn this lesson, it’s important to spend but just don’t waste money on junk and let them make some of those mistakes versus, you know, I’m going to give you a sandbox in which you can play because I know that these aren’t junk but I want you to have some choice in the process as well. Any advice you would have in this area?
Cameron Huddleston: Sure. So this is something that we’ve done with my son. So when he wants to get something, we have a discussion about it. And this happens all the time because in school, they have book fairs. And they always have, in addition to books, they have all sorts of trinkets they can buy. They have fundraisers, you know, where you can get contributions and if you do, you get toys. And he’s all about winning the prize. And so when he wants to use his money to buy something, I ask him, “Well, do you think this is the best way to spend your money? Is this something you really want?” And if he’s dead set on getting it, oh yeah, yeah, yeah, OK I have to have this. I have to have this. OK, well how about we do this? Let’s wait a week and see if this is something you still want. We did this, actually — I can think of a specific example. Last year, they had a fundraiser to school. And if he got a certain donation amount, then he would have won this prize. And I said, “Well let’s” — and he was ready to raid his piggy bank and use all of his money so that he could donate enough to win this prize, which is great that he wanted to make a donation, but it really wasn’t the best reasons. He just wanted to get this particular prize. I said, “Well let’s go online and see how much this toy actually costs.” So we found that he could get two of those things for $9. And so well, let’s wait until the end of the week, see if you still want it. And the next day he came back and he’s like, I still want it. I said, “OK, well it’s not the end of the week.” By the end of the week, he had forgotten about it. And so that cooling off period I have found helps. And of course, asking your kids to use their own money, you know, even reminding them of times when they’ve bought something and then they regretted it. Hey, remember when you bought that pen at the book fair and it broke the next day? “Oh yeah, yeah, yeah, that was a bad idea. I don’t want to do that again.” But it’s OK to let them make mistakes because if they don’t, they’re never going to learn. So — but just having those conversations and when they want to buy something, getting them to at least reflect for a few minutes on whether that’s the best way to use their money or if there’s something that would be a better use of their money I think is a good idea.
Tim Ulbrich: Yeah, and such great advice with the cooling off period and something that I think we need to ask ourselves. Are we role modeling that, you know, for our children? You know, I can think of several examples in the last couple months where probably conversations my wife and I have had about buying something and are we even articulating, you know, let’s wait a day or two and think about how this impacts other areas or do we really need this, do we really not need this? And are we role modeling this but also applying it in our own situation because I know I have found that to be true over and over again how something — how your feelings toward buying something can change significantly with just one night’s rest, let alone a whole week to be able to think about that. And one tangible example I can think of is in the last week, we’ve been waiting to watch Hamilton, you know, recently released on Disney+. And I thought, oh, it would be really nice if we like upgraded our TV game and our sound system game. This is a good reason to do it. And I’m glad we didn’t because it came, it went, we watched it, it was great. But it would have been as good, you know, nothing really changed. And so I think just taking the time to think about it, to cool off. Doesn’t mean you can’t spend money, you shouldn’t spend money, but just really evaluating how that impacts other parts and taking the time to think through that. So No. 5, which is something I have such a great desire for my kids to have and I struggle with how to instill this is to be grateful for what you have. So how do you instill in your children that, you know, they don’t have to have everything someone else has and that there are a lot of people that may have much less and to instill this mindset of gratitude and even taking a step further, a mindset of giving?
Cameron Huddleston: One of the conversations that we have with our kids about money is about how we choose to spend our money and what our values are. So we have let our kids know that one of the things that we really value are experiences: travel. We love to travel. We have a goal of getting our kids to all 50 states before they graduate from high school. This summer has put a damper on that. We had plans to knock out several states in the middle of the U.S., but that did not happen. But when the kids are asking for something, something perhaps that’s expensive, we tell them, “Well, you know, remember how we’ve talked about how we choose to spend our money on travel? We could afford to buy this, but if we did, we would have less money to travel. What do you enjoy more? What do you think you would like more? Do you like getting to go places and seeing new things? Or do you really want, I don’t know, a new iPhone?”
Tim Ulbrich: Yeah.
Cameron Huddleston: You know, so getting them to think about what they value, what we value, is important and pointing out when — and this is in particular with my son, who as I said, really wants what his friends have. I don’t have that issue so much with my daughters. But when he constantly says, “So-and-so has this. So-and-so has that,” I tell him, “Well, you have a lot. There will always be people who have more. There will always be people who have less.” We choose — and going back to this conversation about what we value — we choose to spend our money on these sort of things, on experiences, on travel. Yes, I know you want to have all of these toys and it seems really wonderful, but you have a lot of toys already. And if we bought you every toy that you wanted, then we wouldn’t have as much money to do some other really fun things. And you know, in the moment that conversation usually works. You know, it gets them to realize. The problem is getting that idea to stick in his head because as I said, he just, he wants to keep up with the Joneses. My daughters don’t ask for nearly as much. They don’t seem to be as concerned about what their friends have. And I feel so fortunate that they don’t. You know, even with him, I hear things like, “Oh, my friends’ homes are better than ours. They have a pool. We don’t have a pool. Why can’t we have a pool? Can’t we buy a pool?” And I tell him, “Well, we probably could a pool if we really wanted to. We could put a pool in if we really wanted to. But your dad and I have to save for things in the future too. We can’t spend all of our money on what we want now. We have to have money for when we’re older and we don’t want to work anymore, money for our retirement. We have to pay for things like if someone has to go to the hospital or if we have to get a new car. So if we spend all of our money right now, we won’t have enough money in the future when we need money too.” So I have a lot of conversations with him about it. I feel like maybe I’m making some progress slowly. You know, but I have to spend a lot of time pointing out to him, you have a lot. You’re not going to have everything. But you do have a lot already, and you need to be thankful for what you have. It is certainly a challenge. And as I said, you know, some of my kids are much more receptive and I believe much more grateful for what they have than the other — just singular other — with my son. But it is something I am trying to instill in them because I feel like if you are always longing for more, you’re never going to be satisfied with what you have.
Tim Ulbrich: Yeah, and as a father of four boys, I have a soft spot for your son. So I hope he doesn’t feel like we’re singling him out.
Cameron Huddleston: Sorry.
Tim Ulbrich: What you said about him reminds me, I feel like this topic, when you’re talking about values and vision for your financial plan — and I love that you’re doing that because we talk a lot about with our financial planning clients about having a vision and a purpose for your plan. And under that becomes the framework of why we’re paying off debt or why we’re saving or why we’re investing in life experiences and how we balance and prioritize all of those. And this is the beginnings of that conversation, right? What’s the values in which how we spend our money? What’s the vision for how we spend our money? And I think it’s a conversation that reminds me of the book, “Compound Effect” by Darren Hardy where it’s the every day, every week conversations. Any one of those may not seem significant or that it’s moving the needle, but over the course of time, you know, we hope that that will bear the fruit in which we desire that it will. Thank you, Cameron, for a great discussion and taking the time to come back on the Your Financial Pharmacist podcast. And we’re going to link to your book, “Mom and Dad, We Need to Talk: How to have essential conversations with your parents about their finances” in our show notes for this episode as well as your article from your website, “What I Teach My Kids About Money.” So we will link to both of those in our show notes so our listeners can go and learn more or pick up a copy of your book, available at Amazon, Barnes and Noble. But in addition to those two resources, where can our listeners go to connect with you and to follow your work?
Cameron Huddleston: You can learn more about me at CameronHuddleston.com. You can — there’s a link to email me if you want to get in touch with me. I have a newsletter, I have some free resources on the site. You can follow me on Instagram @cameronkhuddleston. And you can follow me on Twitter @CHLebedinsky. I know it’s a little confusing. I’ve got my maiden name that I use for my byline, and I’ve got my married name, which just happened to end up being my Twitter name. And so I know it’s a little confusing, but that’s where you can find me.
Tim Ulbrich: Awesome. And no worry, we’ll connect to all of those in our show notes. So go to YourFinancialPharmacist.com/podcast. You can find this episode and within there, you can find not only reference to the article and Cameron’s book but also the ways to connect with her. So Cameron, again, thank you for your time and for coming onto the Your Financial Pharmacist podcast.
Cameron Huddleston: Thank you so much for having me.
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