#024Today, I am lucky to have Liz Frazier. She is a Certified Financial Planner specializing in financial planning for families and working professionals. She decided to go into financial planning after her first child's birth because, like so many other new parents, she realized the overwhelming need to make sure her family was financially prepared and protected. Her goal is to alleviate the anxiety surrounding finances and provide painless and straightforward advice for all of life's stages and changes.
Shareable Link: https://www.buzzsprout.com/1288991/8213311
For full show notes and transcript go to Raising Financial Freedom
In This Episode:
Links Mentioned:
#024Today, I am lucky to have Liz Frazier. She is a Certified Financial Planner specializing in financial planning for families and working professionals. She decided to go into financial planning after her first child's birth because, like so many other new parents, she realized the overwhelming need to make sure her family was financially prepared and protected. Her goal is to alleviate the anxiety surrounding finances and provide painless and straightforward advice for all of life's stages and changes.
Shareable Link: https://www.buzzsprout.com/1288991/8213311
For full show notes and transcript go to Raising Financial Freedom
In This Episode:
Links Mentioned:
[00:00:00] Eric: [00:00:00] Welcome. Welcome. Welcome to episode 24 of raising financial freedom. Today. We have a great guests. Liz Frazier is here with us today. She is the author of beyond piggy banks and lemonade stands. Now, Liz is a certified financial planner and she comes from a family that is deep rooted within finance. But the best hat of all that she's wearing is that she is also a mother.
[00:00:24] We are going to talk about her book and what are some of the best parts of financial literacy stay tuned to the end because we also have an announcement to make as always, I hear a Cola, me,
[00:00:34] Host daughter: [00:00:34] dad, hurry up and turn on the music.
[00:00:42] Introducer: [00:00:42] Have you ever wondered why some people seem to have it all financially do well off parents simply hand their children money or is there more to this welfare? Welcome to raising financial freedom. The podcast. We are here to talk about everything you never knew to teach your children when it comes to starting their financial [00:01:00] future, the principles behind wealth and methods that are out there to teach your child about personal financial freedom.
[00:01:06] There was no real tricks to earning other than money. We are here to discuss, teach and grow with you. Raising financial freedom, the podcast with your host and concern parents, Eric yard. Let us get right into today's show.
[00:01:23] Eric: [00:01:23] Welcome everybody. To another episode of raising financial freedom today, we have Liz Frazier.
[00:01:36] It is how are you doing today, Liz?
[00:01:39] Liz: [00:01:39] Hey Eric. I'm great. How are you
[00:01:41] Eric: [00:01:41] doing just fine. I'm glad you joined us here today. What I wanted to talk to you about Lewis. I read your book and it spoke to me in so many ways that. I just had to make sure that he was a guest on the show, your book beyond piggy banks and lemonade stands.
[00:01:58] Tell me some of the [00:02:00] history that you have with this book and some of the financial literacy routes that you and your family have within. Um,
[00:02:08] Liz: [00:02:08] that's a really, that's a great question. That's there's a lot, there's a lot there. I. I am a financial planner and I come from a family of financial planners. My mom started her financial planning business about 40, 40 years ago now.
[00:02:23] And my brothers joined the firm and about 15 years ago, and then I joined about six years ago. It was finance has always been in my blood. It's always been a part of our family. It's never been. A taboo subject around the dinner table. It's just, was always part of our life. Just like any of these other nutrition, safety, any of these other kinds of important topics for kids.
[00:02:43] So it was always just a part of our world. So it was never something that I was uncomfortable with. And when I became a financial planner, I saw I started seeing clients. And what I saw was that the majority of my clients, and it didn't even matter how much money they had it wasn't about how much money they had.
[00:02:59] The majority of my [00:03:00] clients were very intimidated by finance. And these are very smart people and have no, there's no reason that they couldn't learn about finance. But I think it came down to a couple of things. I think one, the world of finance is made way more complicated than it needs to be. You hear if you listen to the news and if you listen to experts, you would think that you have to understand hedge funds or Bitcoin to be able to manage your own money.
[00:03:25] But it's actually not difficult. It's really not. It's not a very difficult subject. And I think the other thing it comes down to is that there's no reason why people should under adults should understand finances. Because nobody ever talked to them about it. Nobody when we were growing up, I was the exception.
[00:03:41] But at our age, when we were younger, our parents, weren't talking to us about finances and the importance of, for, as a managing your money and how important that's going to be going forward. And so adults, they turned 18 and all of a sudden they were thrown into the fire and they had to learn this stuff on their own.
[00:03:58] And first of all, that's not a [00:04:00] positive experience. And a lot of people made a lot of misses. And became very intimidated and uncomfortable about money. And so I realized that these adults, it's not that they couldn't learn about money and finance it's that they had a block. They just, they had this block up that, Oh, I'm not financing.
[00:04:16] I don't manage the finances in my house. I know that's not my thing or math. Isn't my thing, which I'm like, let's try. But, so I think it's more, I started realizing that this is something that people have a block about and it's because they were never taught about it when they were kids. And I have little kids.
[00:04:34] So, you know, it started with me just talking to them about money, the way that I did when I, when my parents were raising me the way that they did just talking to them just in general, it was just part of our conversations because it was my job. It was, my work was something that I love and it grew from there.
[00:04:48] And I realized that these kids are just sponges and that they're not intimidated by money because I wasn't telling them to be, I wasn't teaching them to be. And that it was something that was so simple that all parents could do, and it [00:05:00] would have such a positive effect on their kids' lives. So that's really what sparked my interest for the topic.
[00:05:05] And then the book, what
[00:05:07] Eric: [00:05:07] have your parents taught you about financial literacy since your family is so enriched in it?
[00:05:15] Liz: [00:05:15] You know, it's a good question. People ask me that before. I don't think it's about what they taught me. It's not one I can definitely pull out. Saving was very important. My, my mom taught me and my father was a psychiatrist.
[00:05:28] So money was not his thing. He was not his area, but my mom, but this was something that was her life's work. And so she taught us the importance of saving. Early in. She called it pain herself first. And I always thought that was really important. And an interesting concept that when you make money, pay yourself first, before you start buying things, paying other people always pay yourself first and put a little bit away, but it's not necessarily the lessons that I remember them teaching me.
[00:05:53] It's the fact that it was part of our conversations. It was just, it's always been part of my life. [00:06:00] Just the same way that nutrition is. Parents try to incorporate that in their daily lives. Or stranger danger or the dangers of drugs. So it's not that you remember one specific sit-down or one specific lesson it's that it was incorporated just throughout our lives.
[00:06:15] So it was never something that was. Um, uncomfortable for me, it was the lesson was that it was important for me to know
[00:06:22] Eric: [00:06:22] about. I see. So I know for a fact that you're passing this on to your kids, one of the good monitor, uh, best tools for teaching kids is what, I'm, what I've learned and what I'm learning.
[00:06:32] Even now, even more our games. What are your favorite kid games that you play with your children when it comes to money? It's
[00:06:41] Liz: [00:06:41] a great question. And you're so right. Especially the younger kids. They, if you have this idea that teaching finances, sitting down with them with a spreadsheet and talking about budgeting, you're going to lose them in four seconds.
[00:06:52] And also you're going to be bored, stiff. So games are a great way to get kids engaged and interested and also make finance not seem [00:07:00] scary for the younger kids. Some of the games really isn't about money. It's about teaching the foundations. Of, uh, finance and teaching the things that they need to understand before they even really have a good idea about what money and managing money and finances.
[00:07:13] One of the biggest games that my kids, I think really got a lot out of is playing needs versus wants. And we did this in a couple of different ways, kids love, and I think all kids are like this Siva. Five-year-old and a seven-year-old and they love just being asked questions and they love asking questions.
[00:07:29] So how many things in this room are red? They always want to make a game out of everything. So we start talking about needs versus MOTS. And I'd say, what do you guys think is a need? And what's a war, a lollipop and water. And they sometimes say the lollipop, their kids. But they would tell me which one they think is something that they need and something that they want.
[00:07:49] And then they tell me why. So why do you think that? Why do you think that we need water? And so we need that, or else you'd be thirsty. And however, kids, brains things about that, things, those things, [00:08:00] but it became something that it became a conversation that started out as a game and it became a conversation.
[00:08:05] And then we would do things where I'd have them get out a poster board. And I'd say, I want you to go through this magazine and pick out 10 wants. And it pictures of 10 wants and 10 needs and then put it on the poster board and then let's talk about it. And it was crazy. Yeah. It was really fun for them.
[00:08:21] And part of the learning process is them explaining to me what's a need and what's a want, and there's nothing wrong with any of the answers my daughter had as a knee, as a want a zombie costume. And she said, no, because obviously that's not a need. We don't need zombie costumes, but everybody wants us on because.
[00:08:40] It was just getting these conversations started. So the needs versus wants you can do in a lot of different ways. And I really liked that one. There's also, monopoly's a fantastic game for learning about money. It's fun for everybody. It's something that everybody in the family enjoys. So that's any of those kinds of games are great for teaching kids, there's other and things like [00:09:00] talking about how much things cost.
[00:09:02] You can go through the house and say, What here do you think costs money and what do you think that we have to pay for? And so it's looking at things like electricity or the cable or the refrigerator or the house, and having them identify these types of things. A lot of these games are really about conversations and making them fun for the kids.
[00:09:24] Eric: [00:09:24] Yeah, definitely. You definitely have to make it fun for them so they could take that information and then take it in easy and realize that, okay, this is not so bad, but what I want to know is also is that with your kids, having to clear-cut advantage. Since your family's deep rooted in financial literacy, how important do you think that the foundation is?
[00:09:46] I think
[00:09:47] Liz: [00:09:47] that right now, yes, my kids have the advantage because I'm comfortable with money and with finance. So I feel comfortable and confident in talking to my kids about [00:10:00] this. However, Any family can get there. And I think that's really important because I think that a lot of parents, you can give parents all of the tools to teach finance, but if they're uncomfortable with finance and money themselves, and they don't have the confidence that they can teach their kids in the right way, then it's just not going to happen.
[00:10:19] But I it's really apparent important for parents to understand that. Anybody can teach their kids this. So while I might have the advantage of this moment, anybody can get there. My, anybody can have the confidence and understanding to teach their kids. Because first of all, when I hear. Parents, especially saying, I just, I don't know, money.
[00:10:40] I just, I don't understand enough to talk to my kids about it. They know way more than they think they do, because they are already paying bills. They're already saving whether they think they are or not. They're saving, they're already prioritized. I think they prioritize certain bills over another one.
[00:10:56] They prioritize their needs versus wants. They do [00:11:00] talk to their kids about money. They might not be intentionally talking to their kids. Part of learning how to do it is doing it in a more intentional way. But parents don't realize that they have the advantage of experience. Kids don't have any experience with money.
[00:11:13] They know nothing about it. And parents really do know more than they think they do. So I think that's important for parents to give themselves a little credit about. And also what I said in the beginning is true. Finance is not that difficult. It's not, and you do not have to understand the ins and outs of the stock market.
[00:11:30] You don't have to understand. Bitcoin, you don't have to understand hedge funds. You don't have to understand any of these complex topics to understand enough, to have a healthy financial attitude, to be able to manage your own money and to teach your kids. And it's some very basics around budgeting, which is just how to spend smartly.
[00:11:51] How much are you bringing in and how much are you saving and what do you have left? So a lot of it is just for record keeping to see, to keep yourself [00:12:00] accountable and then the other. Big part of finances, understanding what you have for sitting down and looking and saying, okay, I've got this amount in my checking account, I've got this amount of my savings account.
[00:12:09] I have a home that is worth this much. And then let's take a look at our debt. I have this amount of credit card debt. I have this amount that I owe on my home and it's taking what you owe and subtracting that from what you have. And then you've got a clear. Snapshot of what you have, um, which is called a net worth statement.
[00:12:27] And it's very simple when you break it down and then finally having, figuring out what your goals are, what are your financial goals? And this is where savings comes about. What are your short-term goals and what are your long-term goals? Do you want to buy a house in five years? What do you need to get there?
[00:12:41] And that's when you can start thinking about a savings. Plan or for short term, do you want to get out of debt? How much debt do you have and coming up with a plan with that, these are things that anybody can understand and you already know so much more than you think that you do so anybody can get there when it comes to teaching their,
[00:12:58] Eric: [00:12:58] so while you're teaching your kids, [00:13:00] I know everything is not good.
[00:13:01] And hunky-dory, what are some of the frustrations that you have when
[00:13:04] Liz: [00:13:04] teaching them? There's a lot of mixed messages. Out there when it comes to money and the media covers money more than any other topic out there. And it's about the Kardashians and what they have, or you hear people talking about money as the root of all evil.
[00:13:21] And if you want money, you're greedy. So something that I'm struggling with my kids right now is they watch these videos and these kids that they love that they follow live in a mansion. And so I've heard them start talking about let's pretend like we're rich kids or mom, why don't we have a mansion?
[00:13:40] And I'm a financial planner and that this is my, this is my job. And I struggled with it and I have to talk to them and say, guys, Money is not good or bad. Money is a tool and money is a tool to help you get what you need. And so it's not about whether you're rich or not rich. It's not about the house that you have.
[00:14:00] [00:13:59] It's about, do you have money to get what you need and to reach your goals? And so I have to keep talking to them and continue talking to them about this because there's so many mixed messages about money, and that comes into play even more when parents are talking to their kids about money, because all they're getting is these are these outside influences about money.
[00:14:19] And usually it's about. The wealthy, the extra with those super wealthy and what they're doing and what they're buying and what they're getting, you don't have to talk to. My kids also say, so those kids who live in that mansion, we have no idea if maybe they're actually went into financial trouble to get that mansion.
[00:14:38] So it doesn't say anything about their actual wealth or their financial health about what they have it's about. Do they have what they need to reach their goals?
[00:14:49] Eric: [00:14:49] Correct. Correct. That is so true that, and it all could be a facade on top of it because who knows they might be renting. It might not be theirs.
[00:14:57] So these are [00:15:00] things that I definitely try to teach my daughter and like, Hey, what you're seeing on TV is not exactly real. It could be, but it may be
[00:15:08] Liz: [00:15:08] exactly. And part of that, and my kids, part of my book was about advertising and my daughter got really into this and she now she'll watch a show and she'd be like, Oh, that is just a commercial.
[00:15:19] They are just telling us that this is awesome because they want us to buy it. That's true. But it's the same thing with these stars. Celebrities, YouTube stars. They're all selling us an image. And I have to keep telling my kids that this is probably not their full story. This is not fully their real life.
[00:15:37] They are selling us their image and what they want us to see. We actually don't really know these people. We're just watching advertising,
[00:15:45] Eric: [00:15:45] correct? Correct. Hey, I just want to remind everyone that we have the question of the month still going on, and this is your chance to be on and be part of the show.
[00:15:56] Just go to raisin financial freedom.com. Go to the [00:16:00] contact page, scroll down to the bottom and you should see the question and a sample answer. Just press record to start answering the question. Now, everyone who answers the question will be automatically entered into a contest for a $25 Amazon gift card.
[00:16:17] Your book beyond piggy banks and lemonade stands really speaks out to the nine to five of parents out there. How important was it for you to give confidence to these parents? Will feel that they are not equipped to teach their kids.
[00:16:32] Liz: [00:16:32] I that's what the book was for. It really. That is what the book is for the parents who I started the book talking about as parents, we have so much on our plate, we just, our plate is constantly overflowing.
[00:16:44] We are chauffeurs to our parents. We're working. We're trying to be. We're trying to get our kids to eat more protein. We, we may actually try to have friendships where we are constantly have a million things that we need to do. So [00:17:00] when parents hear, Oh, I've also got to teach my kids about money on top of this, they're like, that's going to the bottom of the list.
[00:17:06] I have, I am overwhelmed with things. So I really am, and I am the same way. So I really appreciate that with parents, but I think that if parents could change their mindset. So if you thought about nutrition with your kids, it's not really something that we take a lot of extra time out of our day for, I'm not a big cook.
[00:17:24] That's not my area, but I do incorporate it throughout the day, but I never feel like that really takes. Out any of my time, it doesn't take up a significant amount of time. It's just incorporated in the day to day. So I think that if parents could start changing their mindset about teaching money and think about it in ways of how do they teach safety to their kids, how do they teach nutrition?
[00:17:47] How do they keep teach the dangerous of drugs and dangerous situations? And if they apply that kind of mindset to finance, I think that it will maybe. Make it feel a little bit [00:18:00] more manageable. And what I mean by that is the number one thing that they can do if they do nothing else. Number one thing they can do is communicate.
[00:18:08] Just start talking to their kids about it, just make, if they made it an open subject in their house. And just part of their kind of day to day logistics, cool life. They are already giving their kids such a huge advantage because their kids are not going to be intimidated by money when they get older.
[00:18:25] And all that means is that when they get older, they're not going to be scared to learn. They're not going to be one of those people as an adult who say, Oh God, yeah, I'm just not a financing person. This isn't my thing. Yeah. Kind of it's always been around and they're not going to think anything about it.
[00:18:41] So if parents can start talking to their kids about what something costs, when they're at the store, just talk about, I don't know if I'm going to get this or this costs a little bit more money, but it's because this started just talking out loud, it might feel awkward and it might feel forced, but your kids don't know and they don't care.
[00:18:56] So just start talking about. Talking out loud about [00:19:00] money in a very neutral way. It doesn't have to be positive, but it doesn't need to be negative or stressful just to just a neutral way about how they're using money throughout their lives. Oh, can you make sure that you turn off that light because when the light stays on, we're paying for power when we're not actually using it.
[00:19:16] So it's wasting money or. No. If you guys get money from grandma, this Christmas, what would you want to buy? Okay. That's $25. You only usually get about $10 from grandma. How do you think that you can make that money? So it's a lot of conversations just being open with them. You don't have to have any real specific knowledge just to talk to them about how you use money throughout the day.
[00:19:37] Um, another thing that you can do, and I think that this is really important for parents to think about is having your kids actually practice. And experienced their own money management. And this is another thing that they can do with very little effort from the parents, because the kids are doing all the work.
[00:19:54] We just have to sit on our hands and bite our nails and just watch them practice. [00:20:00] So what I mean by that is giving your kids. And allowance, and this doesn't have to be anything big. It can just be a little bit every week, every month, whatever your family's comfortable with, but giving your child an allowance and actually letting them manage that money.
[00:20:12] I really liked the safe spend, share jars where every time they get any money, they put a little bit in the spam jar, a little bit in the save jar. And then a little bit in the share jar, which is something that they're going to do good with. They're going to give it to somebody or to an organization to help somebody.
[00:20:27] And then let your kids make the decisions from there. Let them decide. How much are you going to save? How much are you going to spend? How much do you want to share? What do you want to save for? And when you're at store and they want something, you can say you have money in your spend jar. You can make the decision to spend that and then let them practice.
[00:20:46] Let them make their own mistakes. And this is the only time in their lives where they can make financial mistakes. And there's no consequences. They may buy a toy at target that breaks two days later. And they're sad. That's okay. But the learn [00:21:00] later that they're not going to buy a cheap toy at target next time with that money, maybe they'll want to get something better or not spend it at all.
[00:21:06] So that's another way that parents can teach their kids without really having. A sophisticated understanding of finance and without taking a lot of time from their busy schedule, it's not adding to their plate. It's just incorporating something into their daily activities.
[00:21:22] Eric: [00:21:22] Well, that is so true. I do the same thing with my child.
[00:21:25] She has not jars, but envelopes spend save and a charity envelope, but that's the other day she, the other weeks she forgot. And then she came on Tuesday. She usually gets it on the weekend and she came to me on Tuesday. Say, Hey, I forgot. I was like, yeah, you did forget. I'll have to see you next week. It's your responsibility to come to us and let us know, Hey, the allowance is due.
[00:21:47] And I wanted to show her that you need to remember these things because she's quick to remember about ice cream or YouTube or something like that. Hey, can I watch YouTube or, Hey, can I get some ice cream or she's quick to remember [00:22:00] that, but I wanted to show that money is a tool, but it's something that you need in order to execute certain things in your life.
[00:22:08] Liz: [00:22:08] I think that's great. And I think that's really smart to make her responsible both for her money because it's her money and okay. And I, I think by having her, if she doesn't ask for it, she doesn't get it. Then that's showing that's putting some skin in the game. It's really giving her that ownership, that accountability and the responsibility of money.
[00:22:28] And it, it makes it more important to her because she's earning it, whether it, her she's earning it by asking. But she's responsible for it and it makes it a little bit more important to her. And she might think a little bit more about how she spends it and what she does with it.
[00:22:41] Eric: [00:22:41] Can you give us some action steps, quick action steps that cover the three major points within financial literacy, which is saving, budgeting and investing that a parent could implement today or tomorrow?
[00:22:57] Liz: [00:22:57] Yeah, so I think the, one of the biggest ones is what [00:23:00] we were just talking about with the allowance. And I think that giving your kids the opportunity to practice these things is really important. For example, teaching your kids about spending the biggest factor in spending is decision-making. So it's helping your kids.
[00:23:17] Understand the decision-making process and how decisions work and then letting them do it themselves. If they want to, let's say that you are at a carnival and your kids have $10 that they're able to spend, and they want to go buy this toy. The first toy that they see and said an old minion style, and they see this and they immediately want it.
[00:23:40] And you know that it's probably going to break in the next couple of days, but just. Start the decision making process with them. And part of that is being aware that they're starting to make a decision and say, okay, so you have $10 and one option is to buy this. So let's think through what are some other things that you could do with this $10?
[00:23:58] Let's just make sure this is the best [00:24:00] choice. So you could either buy this now, or you could save that money and buy something later. That during the day at the carnival, or you could save that money for something else for another day. So let's just start thinking through this and your kid's probably going to go, okay.
[00:24:16] All right. Yeah. I want this minion, Dell. This is what I want and say, okay. So you're going to buy this minion doll. This is the amount of money it's going to cause. And just making sure that they understand they're making a decision and then just let them make the decision. And part of that is. Let them make the decision, let them make the mistake, let them buy that toy.
[00:24:34] And then later when it breaks or they don't like it anymore, or they're crying and they want to buy something else. Cause they see, you know, something even better at the carnival, just talking them through it and saying, Oh yeah, I, I understand. That's really hard. I know that you wish you could get this, but you already made your decision and you bought the minions toy and.
[00:24:51] I'm sorry that you're regretting it. And I totally understand. And next time maybe we'll make a different decision, but that's a really big part of [00:25:00] understanding spending. And that's really, the cornerstone for budgeting is being able to make smart decisions, thinking through what you're spending money on.
[00:25:09] So I think that's the biggest thing with spending with savings. What I did with my daughter, when she started out getting her allowance and doing the jars is we came up with what she was saving for it. At the time, it was a Jasmine doll. So I said, okay, let's we made it really fun. We put together this big poster board, we got pictures of the Jasmine dial.
[00:25:27] We put it all over and we did one of those like old school sales thermometers, where you like have the thermometer and you got the goal. I think the goal was $30 and you have little milestones, $5, $10, 15. And so every time she put more money in it we'd color in until we got up to the $30. But to make it more engaging and more fun.
[00:25:46] Fun and a celebration. I would have milestones at each one where I would give for like a reward. So at $5, when she saw she saved $5, I said, you can pick out the dessert for everybody tonight. Cause she wanted ice [00:26:00] cream. Her brother wanted a brownie, whatever that is, or you can have dessert tonight. So we made that kind of a celebration.
[00:26:05] And then at $15, I said, I'll give you an extra $5 once you get to $15 or maybe you pick the movie that night for the family. So it kept her engaged with it and it made it. Fun because this is your kid's very first experience with saving money. And if they're just putting money into a jar until they.
[00:26:22] Save up for something they're just, they lose interest. It doesn't feel like they're actually doing anything. It's kids. If they're not having fun with something and they're not constantly being engaged with it, they lose interest. So that worked really well for us, with spending or with saving, because it really gave her a very positive experience with saving money, with sharing.
[00:26:42] And we did something similar with myself. A son. So my son has just started he's five. We're just getting him started on the piggy bank system. And what's important to know for parents that kids at all, they get ready for this at all different ages. My daughter was ready for this at three, my son, if I had given him [00:27:00] money at three, he would have just thrown out the room or tried to eat it.
[00:27:03] It just, he was nowhere near ready for that. I'm not sure he is right now, but I just figured I'm going to just, it can't hurt to start exposing him to it. Right. So we started the piggy banks and he doesn't care much about the spending or the saving money. He's not really getting that. He's really getting the sharing money because he's obsessed with sharks and dinosaurs.
[00:27:21] So first he wanted to save the dinosaurs and I'm like light gently told him that ship's sailed, but he loves sharks. And he said, can I save the sharks? And I was like, absolutely. That's a great idea. See how we can save the sharks. So we went on and we researched on the computer and we found those bracelets that this amazing group of guys, they go into the ocean, they find they collect trash and they make it into a bracelet.
[00:27:44] And if you buy this bracelet, then they will donate that money to two find that help save sharks. And so what I really liked about this is, was something tangible for my son. If he was just going to donate. $10 to the WWF then, which is a [00:28:00] fantastic organization, but for a five-year-old he's okay. Where did my money went to research?
[00:28:05] So I don't know what that means for this. He's going to get a bracelet and we got a picture of the brace, three, sit on the share jar, and he knows that once he gets this bracelet, he pays $10, $20 for it. And that money goes to save sharks. So he's getting something for it and it just makes it more.
[00:28:22] Interesting and more tangible for him. So those, I think are some ways that you can use the piggy bank systems to really bring these important concepts to life. And these are just, they're the backbone of any kind of adult financial management and financial health. If you can understand those three things as an adult, especially as a child, then you can be financially healthy.
[00:28:45] All right.
[00:28:46] Eric: [00:28:46] What, what age do you think. You should start getting them involved with investing. Um, and where should they dip their toes into?
[00:28:57] Liz: [00:28:57] That's a tricky one. I it's, it varies [00:29:00] for kids. I think part of it is how far along they are within your family. And if they're lucky enough to be learning at school, which most schools don't teach financial management to kids, but that's, it's a tricky question.
[00:29:11] I think it's all individually based on your child's understanding of money. Calm confidence in money, but I think as soon as they are, they understand saving and they've got a good grasp on that. Then you can start introducing investing aspects and you don't have to necessarily jump into the stock market.
[00:29:31] Start by talking to them about banking, the banking system, and seating's accountants at banking at banks, where if you put in your money into a savings account, they are actually going to pay you money called interest to borrow, to borrow your savings. And to use it. And one way that you can actually show your kids this firsthand is you can start paying them money for their savings.
[00:29:54] And this is an interesting concept. And again, the kids have to really have a good grasp about savings, but you can [00:30:00] say, you know what, I'm going to give you 10% interest every month on the money that you have in this jar. So once a month, you guys go through, you count your money, you have $30 and the same jar and the parents says, okay, so 10% of that is.
[00:30:13] $3. So because you have this money here, I'm going to pay you interest and that's the basics and the beginning of investing. So they understand that you can actually use your money to make more money. And then it's just starting to talk to them about what investing is and what that means. And really when it comes down to is you are giving your money to letting somebody borrow your money.
[00:30:36] Who you think will be able to give you new money in return. And the biggest part of that is buying stocks in a company. So start with your kids and your teens talking to them about that. What are the, what are the companies that they love? What are the brands that they love? Okay, so you love Apple. So Apple is a company and Apple needs to make money and they need to raise money for a lot of what they do.
[00:30:55] So they sell pieces of their company and people buy pieces of the company. And [00:31:00] then. Apple will pay them a return, just like I paid you return in your piggy bank so that they start to understand just a real life. These are these companies. You can buy ownership, you can be an owner and these companies buy a little bit of this company and you'll make money from it.
[00:31:15] So there were a lot of different types of apps. That kids can get started on where they can actually, there's some that are very specific for kids that are made for kids. And I recommend that they use one specific for kids at first, because they're much easier to use. They're not going to intimidate them upfront.
[00:31:34] You don't want to turn them off from investing because it's just too complicated. And same thing for the parents. Some of these are just complicated for adults as well, but there are different platforms where you can put in. You can say, I want to invest $20 and maybe that's right. Yeah. You know, 0.001% of one share of Apple.
[00:31:53] But if your kid wants to buy Apple great, they can put $20 in and buy a fractional fraction of a share for Apple, and then you can watch it [00:32:00] grow. So I recommend if they're doing that to start with an app, that's very specific towards kids.
[00:32:05] Eric: [00:32:05] Yeah, I like that. I like fractional shares once upon a time, you couldn't do that, but now you can buy fractional shares and being, get involved in stocks.
[00:32:13] But yeah, I like your point that's I never thought of it that way. How to introduce interests to a child. And that was definitely food for
[00:32:22] Liz: [00:32:22] thought, because for your kids, like anything, especially the young kids, but even the older kids, they're just not interesting. If it doesn't have to do with them, I don't care.
[00:32:32] Tell them as much as we know about finance, but if it doesn't really apply to them, if they're not engaged in it, if it doesn't, they don't have skin in it, then they're just going to be totally receptive to it. And adults cert work the same way. We're all built the same way. So we need to. Do whatever we can to make it applicable and relevant to
[00:32:51] Eric: [00:32:51] them.
[00:32:52] Yeah. That lesson of definitely teaching them how to, this is how your money can make money on its own is a [00:33:00] given that should be done throughout every family in the U S and. I think with that type of foundation, your child can really grow their investments and even into retirement at an early age, but they need to know this though.
[00:33:14] That's the whole thing about it. If they don't know it, they can't do it. They have no knowledge of what's for the future for them when it comes financially,
[00:33:22] Liz: [00:33:22] I will say that. You asked me before if my kids have an advantage, because they're coming from somebody who understands finance is talking to them.
[00:33:32] That really comes to play when you're an adult, because, and everybody knows this. Everybody. There's not one adult alive who doesn't wish they saved more earlier. And because of that time, value of money and. So I think that this should be a comfort to parents that they're not behind their kids. Aren't missing anything right now, because it's hard at this point for kids to save a significant amount of money.
[00:33:54] If you're hoping your kid's going to save for college, it's really the principle of them saving for college, but they're probably not going to make a [00:34:00] huge dent in their college fund. But it's, you're trying to build healthy practices, build healthy habits. That's going to, that they can apply when they're an adult.
[00:34:08] So you're not behind you can do it at any time. But what does matter is when you're 45 and you haven't started saving for retirement, you know, that's when it's hard to get that you can still do it. Absolutely can still do it, but you can't get that 20 years back of your money earning money. So if you can get your kids to what the end goal for parents is when they, your kids get their first job, if they open up a 401k through their employer, or if they just have.
[00:34:37] 2% of their salary go to a savings account. Then they have done a fantastic job because their kids know I need to pay myself first. I need to make sure that I've got some just-in-case money and I'm planning for my future. Then that's your job is done. What is
[00:34:51] Eric: [00:34:51] the one thing people don't realize about financial literacy?
[00:34:55] Liz: [00:34:55] The one thing that people don't realize about financial literacy, I [00:35:00] think that parents don't realize that they can teach it. I really just think that's the biggest issue. It's the biggest hurdle. There's so much taboo around money with kids, with adults. And I just, I wish that I could look every parent in the face and talk to them and say this.
[00:35:17] You've got this. You can teach your kids. You don't have to understand the stock market. You don't even have to have a good grasp of your own finances. You just need to make it a comfortable subject for your kids. Just give them these basic building blocks so that they can learn it as they get older. And you're not going to teach them everything in a day, in a month in a year.
[00:35:40] You're not going to teach them everything in a lifetime. It's a lifelong process. But for parents, all you need to do is just get started. Just start adding those conversations stations, just start putting those building blocks, incorporating those building blocks. And I tell you, they will they'll do the rest.
[00:35:59] They will be [00:36:00] able to learn, become financial literate through. Being comfortable through experience, through learning on their own, their practice, um, and their
[00:36:10] Eric: [00:36:10] exposure. There's what is the best piece of advice anyone has ever given
[00:36:14] Liz: [00:36:14] ever given me? I'm assuming this is about, I think what my mom said, pay yourself first.
[00:36:19] I just, that always stuck with me. I think that's it, it made it feel more real. Nobody really wants to save. What's exciting about that. You're putting money away that you could be doing something with now, but when you think about in terms of you're paying yourself, First you're doing something for yourself.
[00:36:35] This is your you're giving yourself money so that you can have it for what you need later. So I think if anybody can learn, can, if there's one, one thing that you can teach your kids or that adults can do on their own is to save, to pay themselves first. Sounds
[00:36:51] Eric: [00:36:51] great. Liz. I want to thank you for coming on the show and how can we reach you to continue this conversation?
[00:37:00] [00:36:59] And what else do you have going on with you in the
[00:37:03] Liz: [00:37:03] I've been thinking about and talking to a couple people about possibly writing another book, I'm really interested in focusing on teenagers with finance, and I'm also interested in how to incorporate finance in the classroom because it's such a. Just tragedy that finances and taught.
[00:37:20] I would like it taught in elementary schools, but that's not going to happen anytime soon. But at the very least in high school, it really should be taught. And I think that right now it's hard to get into classrooms, but there are ways that teachers could maybe incorporate it, like sneak it in. So that's something I've been interested in.
[00:37:35] So I'll keep you posted on that, but I can be found@lizfrazier.com my website or at L Frazier Peck on Instagram and Twitter.
[00:37:43] Eric: [00:37:43] All right, Liz, once again, thank you for coming on the show. Thank you so
[00:37:48] Liz: [00:37:48] much
[00:37:50] Eric: [00:37:50] part where I share my thoughts and that discussion that I just had with Liz. I truly enjoyed. One thing I could take out of that conversation is as a [00:38:00] parent, don't be afraid you have financial knowledge of some sort.
[00:38:04] So don't feel you have nothing to offer your child when it comes to finance, your child is looking towards teachers for knowledge. And you are the number one teacher. And if you really don't feel that you have anything to offer, read Liz's book and listen to more of my episodes and just educate yourself while you're teaching your child.
[00:38:26] Now, we are changing up the scheduling of the show. Thanks to you. We are experiencing growth and we are taking on some other projects. Uh, so for right now we will be publishing on the same day, but we will be publishing every. Other week starting next. So once again, we usually publish on Thursdays, but instead of every week, it'll be every other week in order to take on a few more projects that will definitely help out the show.
[00:38:55] Now just remember, next week is the beginning of April and that's also the [00:39:00] beginning of financial literacy month. So stay tuned next week and stay safe.
[00:39:07] Introducer: [00:39:07] We really hope you enjoyed this episode of brazing financials, food of the podcast. Stay connected with us directly through raising financial freedom.com.
[00:39:16] You could also join the discussion on social media, which you can also find links on our website. If you would like to speak with us, please send us an email through info@raisingfinancialfreedom.com and as always thank you for pushing your mindset towards a better reality. This concludes. It's the most thought provoking portion of your day.
[00:39:34] Don't forget to please like, and subscribe to stay fully up to date until next time. Be kind to yourself and each other. .