#042 How do you help teens become financially literate and make smart money moves before they reach adulthood? You have to get on their level and understand how they think…
Meet Charla McKinley, a Certified Public Accountant (CPA) who homeschooled her kids and is now teaching teens about money. In this episode, Charla talks about how to teach your teenagers about financial literacy, using and saving money wisely, and how adulting really works. She sheds light on why kids need different types of financial literacy curriculums based on their age, as well as how each child can benefit from tailored lessons based on their personality. Plus, Charla shares tactics you can use to teach your kids about the reality of adulting, the value of money, and being prepared for the workforce.
“Experience is the best teacher. It’s just that… when I learned, I wasted tens of thousands of dollars… If they learn it when they’re teenagers and it’s fake money, then hopefully when it’s real money, by the time they’re in their 20s, they’re a lot more wise.” - Charla McKinley
Sadly, personal finance isn’t a topic commonly taught in American school systems, but as parents, we have the power to give our kids the financial literacy needed to have a successful, happy life. Listen in to learn how to provide your kids with practical lessons based on real life scenarios.
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Welcome back. This is raising financial freedom and I am your host. Eric yard. Recently, we ran into a couple of problems with our database and a couple of sectors went down and went bad. We had to get a technician to come in and help us out, but that is life. It throws you a curve ball and you better learn how to pivot real fast.
[00:00:22] So we made a decision to upgrade our computer systems and now things are working better than ever, but it did set us back, but we will definitely look to recoup later on, but for right now, everything is going smoothly. At the end of the day. It's all about the choices that you make. And if we didn't make the choice to move quickly and rectify our problem, we could have been down for a lot more.
[00:00:48] But you made that choice now here at raising financial freedom. We always talk about teaching your children about money at a very early age, but what age you choose to [00:01:00] actually teach your child about money and finances totally up to you as the parent. So at the end of the day, the age group that you're comfortable with.
[00:01:08] It's the one you should pick. I guess today Charla, Mckinley is a certified CPA for over 25 years. She homeschooled both her kids. And then after that passion turned into teaching teens about money. And that's why she's here with us today to let us know how. And what it is to teach a teenager about financial literacy.
[00:01:33] Now, Charla has a website called beyond personal finance. That's teaches teens specifically about finance and money. She definitely has a lot of good information locked up in her. So let's get into it.
[00:01:51] Host Daughter: Come on dad, stop playing around and play the
[00:01:53] Eric: music. Tough crowd.[00:02:00]
[00:02:01] Introducer: Have you ever wondered why some people seem to have it all financial. 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 future, the principles behind wealth and methods that are out there to teach your child.
[00:02:23] Personal financial freedom. There was no real tricks to earning other than learning. We are here to discuss, teach and grow with you. Raising financial freedom, the podcast with your host and concerned parents. Eric yard. Let us get right into today's show.
[00:02:44] Eric: The age group is teenagers. And the goal is to get them financially literate before they reach adulthood. Charla has more than enough experience working with teenagers to get them going. But before you do that as a parent, you must. [00:03:00] Paltz or what's going on with your child today? When it comes to financial literacy, did they get enough?
[00:03:06] Did they get any, what is going on in this day and age?
[00:03:10] Charla: Yeah. Sadly, our education system doesn't focus on personal finance. I think we could spend a long time just talking about why that is and the ramification. But fortunately, I haven't even heard lately that there's this movement on where it's a pass at any time and they do the little snippets.
[00:03:29] So I was very amused to hear some of my students, they lit up when I mentioned pass it in and they were like, oh no, but I'm happy that they. I think that we, I think we're getting there. I think that we are there's enough information out there and enough push towards it, that kids are not completely naive to it.
[00:03:53] But I think that the problem that our teenagers have certainly speaking from experience, I [00:04:00] have a 19 year old son who taught me the HeartMate. A lot of your lesson is not so much. He understood how important it was. Save money, your youth, you bond be frugal. He understood those things, but what pushing back on is he, why would I need a $5,000 car I'm going to be rich?
[00:04:25] And so, you know, she did my lesson about saving money and being. Fell on deaf ears because he had the wrong side of the equation where he thought he would have plenty of money. And so saving money or using coupons was for poor people. And he wasn't going to be poor. That's really where I think that we do a bad job of educating our team is we use language.
[00:04:54] If you dream it, you can be it or all of these things where. We really economically [00:05:00] or financially the sky's the limit. But I think that we need to be a little bit more practical in helping them understand how to earn a dollar and how to make your money work for you
[00:05:11] Eric: in ways teaching teenagers can be much easier than the other age groups, because you could teach more complicated financial education like insurance and tax.
[00:05:23] Now the downside is that you've waited until the child is a young adult. And now the child has been influenced by the environment companies, even by their friends on matters of money for Charla. I wonder how that rule.
[00:05:38] Charla: Yeah. So my, and again, this is my son. I may CPA and I have a degree in finance from the university of Texas, and I just really fell.
[00:05:50] Like I would live a life by example, that would help him avoid some of the financial mistakes that I made in [00:06:00] my twenties. And my husband also brought along with me. We weren't, you talked to about money by our parents. And so we made some mistakes in our twenties and I wanted my son to avoid that. By lived a life, talked about coupon, talked about saving didn't, live, extravagantly, all those things.
[00:06:16] And when it came time to when I put those things in action, by giving my son an allowance, he just wasn't making wise. With his money he was spending for today. And he just did not, he had no vision for his future and didn't understand the power of saving. So I took his love of games. He was in middle school.
[00:06:41] I took it love of games, game of life and married it with true financial principles. Because I don't know if you played the game of life in a while, but who is wildly unrealistic and. I married those two together and created a 20 lesson [00:07:00] journey for him and his friends where I've taught them. And I pretended like they were 22 years old and then they went 20 lessons all the way to 42.
[00:07:11] And in that time I had them choose a car and the shoes, obviously they choose a career. And just like game of life, they got to choose if they were going to go to college or if they were going to start a career right away. And then they began to make choices for them, sell that buy and budgets. And so by making those choices, And making those budgets.
[00:07:33] My son and his friends really began to understand what I meant about how important it was to make wise choices, whether it's the job you choose. And does it, is it going to provide you with the income to pay for the lifestyle you dream of or. Some of the things that you thought you wanted, some of the fancier cars or apartments or houses, [00:08:00] they really understood the true cost of that relative to how much they were going to be.
[00:08:05] And that one class, I really didn't intend it to be any more than that, but it was so impactful and eyeopening to those six. The demand and other opportunities has come up. And so that was in 2014 and I've been doing it ever since my daughter. It's funny. I always say that if my daughter was born first beyond personal finance wouldn't exist because my daughter is a natural saber.
[00:08:33] We actually have the opposite problem with her. I try to, I got to force her to spend money. And so the lessons are completely different with her and she, it's almost trying to teach her that money. Doesn't need to be hoarded. Money is a tool to provide you with a current life and a future life. [00:09:00] That you would like to have and enjoy money is meant to be you.
[00:09:05] And it's definitely not the lesson that I taught my son. And that's really, we do talk about it and in my beyond personal finance curriculum, but it is, um, it had, she been first, we'd have a different conversation today beyond personal finance. Is written for teenagers. And the reason that I did that is because I am, I want to use real dollars and real choices.
[00:09:36] I so often we tend to talk down to our kids and we are like, okay, pretend you have a lemonade stand. How much do you need for cups and water and sugar? And that's all. For younger kids, but teenagers need to see in my curriculum, I have four real cars. And, you know, I say, which one of these would you [00:10:00] pick?
[00:10:00] And then I make, and then I have them look at their numbers and can they put a D can they pay cash or do they have to get a loan? And then they calculate things. So that's why my curriculum is written. We're teenagers so that we can handle some deeper discussions on compound interest and insurance deductible, but my writing and the things that I put out to my followers is really geared to anyone on a parenting journey.
[00:10:29] And just like you that early, I could not agree more than the earlier you start teaching these lessons, not just about money, but it just about adulting. Better it'll be because there's so many things to get them ready for. And so often we have parents wait until they almost look like adults to understand, oh wow.
[00:10:53] They, they are going to be adults someday. And by then, it's just too late there. They've got so many activities [00:11:00] that got so much going on at school. They've got friends, so many other voices in their ears that you really got to start young in order to get them on that path of understanding. And
[00:11:13] Eric: there it is.
[00:11:14] Charla came up with specific lessons catered to the characteristics of, for each child. She has both, her children are different in many ways, but she played into those characteristics in order to get her point across. Now seeing the Amano lessons that Charla came up with for her son and her son, friends, you could tell that she was truly motivated, but where would this motivation.
[00:11:40] And what kind of effect would it have on her? My
[00:11:43] Charla: mom did her best and she came from, uh, uh, a rural town farming town and never had much money. And so moved to a larger city. I met my father and they really had a [00:12:00] tumultuous relationship. I'm an only child. And my dad would often be without a job. And my mom was the breadwinner and the secretary, and she didn't make much money.
[00:12:13] And my dad didn't provide, I remember talking to my dad and just going, why don't you get a job? And he was, his pride would not allow him. He was, we lived in Midland, Texas, and that there was an oil industry there and just pride would not allow him to just go work a retail job. And so he wanted, he wanted to, he was a dreamer and he wanted those big dollars.
[00:12:38] And so our family separate financially aligned. And I just remember financial independence was not something my mom taught with her word that it was something that. I knew she struggled with, and I did not want that for myself. And I really have set out to create a [00:13:00] life where I was not put in that situation.
[00:13:04] Eric: There, it goes of motivation, started at a very early age. So for her team, she was well enough motivated to make sure that they did not go through that same situation. She got. So, so far knowing your teenager's state of financial literacy situation, then knowing the characteristics of your teenagers is other good point and having the motivation.
[00:13:27] What is your motivation for teaching teenagers? Now? I know what you're saying. Eric, what tools did she use in order to teach her teenagers about money? She must be using some type of special program or some special type of project planner since she's also.
[00:13:47] Yeah. So
[00:13:49] Charla: that first lesson was just a yellow, legal sheet of paper and just really teaching a week at a time. And since that time I learned so much from [00:14:00] those students in my subsequent students, that in 2019, I took it nationwide and sell this curriculum to, um, families want to be able to teach. Lessons, real adult choices with real adult dollars to have seen impact to their kids or a small group of their own.
[00:14:24] And I've got videotapes me teaching to use that in, but I still teach it live. Now I do it on zoom because of the pandemic. I there's just, I've learned so much just seeing things, financial principles through the eyes of my students, in the questions that they ask. And when these light bulb moments come on, I remember I had this.
[00:14:49] It's just like life. They first, they get a car, then they move into an apartment. Then they buy a house. And so on that lesson [00:15:00] where I taught them about buying a house, one of my students, you know, they, of course they're preparing their budget and there's a utility. And one of my students raised your hand and said, Hey, actually, we don't need utilities anymore because we have our, we bought our own house and I was like, huh, okay.
[00:15:18] Actually the utilities don't come with the house. And it's funny because that's nothing that I ever would have thought, but hearing their questions and understanding. False assumption really helped me develop this class to teach them where they're at, so that they can, by the time they get to the end of my house buying lesson, their eyes are wide open simply because of the down payment.
[00:15:53] I'm sorry how much? And I'm like, yeah, it's a lot. And we talk about how [00:16:00] long it takes to save that 20, 30, $40,000. And now they understand some of the things their parents and other wise people have been saying about how important it is to save money, because now they go, oh, I get it. And those light bulb.
[00:16:20] Or what makes all of my efforts as a small business owner?
[00:16:25] Eric: What was the biggest challenge you had to overcome
[00:16:28] Charla: on this journey? I think that the biggest challenge is that my competition is folks like Dave Ramsey and other big, big names that are out there teaching personal finance and just trying to convince.
[00:16:42] Families that I have a different way to teach personal finance. It's far more interactive and personal than the other curriculum on the marketplace. Just trying to get them to trust in doing something different and just really trusting [00:17:00] an unknown person rather than somebody that they've already heard of, or that has name writing.
[00:17:07] Eric: Yeah, I understand. I wouldn't look at it as for me. I wouldn't look at it as competition. I would look at it just as burger king to McDonald's and McDonald's to Wendy's is just a different type of teaching. And you have your own style of teaching, which I definite people will gravitate
[00:17:26] Charla: to. And I, what I like to say is I'm a big fan of Dave Ramsey.
[00:17:31] Certainly what he's got to say. And. Sound financial principles, but he's more like a glass of water in the desert where you really key we'll show you how to get out of the trouble you're in, but our teenagers are. And so they don't see his wisdom as a alive. They just, it just sounds just another old guy talking about money.[00:18:00]
[00:18:00] And so when my students get done with this class, whether they do it at home with their own families, or whether when they have a live class with me, when they're done with my 20 lessons, they start to make a lot more sense. 'cause they now go, oh, see what he means. This is why he says to buy a $5,000 car or any of the other lessons.
[00:18:27] It's really the minus the first step in trying to show the teenagers just how easy it is to get into financial trouble. And once they need, rather than lecture them, then they go. Yeah. But that won't happen to me. But once that happens to them, if experience is the best teacher, it's just that the experience when I learned in waiting.
[00:18:55] Tens of thousands of dollars versus if they learn it, when they're [00:19:00] teenagers and it's saved money, then hopefully when it's real money, by the time they're in their twenties, they're a lot more, why is
[00:19:07] Eric: the teenagers is what all parents would like. And as teenagers, like all teenagers do, they will have rebuttals.
[00:19:14] So what if they have a rebuttal saying, Hey mom, that I'm young. I have time. Don't worry about it. I have a lot of time to. And this is the time that you have that talk to let them know that Hey time is of the essence. And right now they are prime to take advantage of it. That's
[00:19:34] Charla: right. One of my main messages to my class and my students, and believe in more true, the younger they are is like time.
[00:19:43] It's the asset that you guys have more than the adults. Yes. You don't have very much money, but what you have, that's more powerful than money is time and help. And you guys can leverage. If you would get off the couch [00:20:00] and leverage your high energy and your free time and turn that into money and put that money away because your parents are basically financing your life.
[00:20:12] So you can put a lot of that money away and let it begin to grow so that it can work for you later in life. That is an asset that we as adult. We know, but we can't go back in time to take action on a lot of us learn it when we're in our thirties or forties. And by then the power of time, my son, again, when I certainly told him he's a numbers guy and always have been as a kid, he understood numbers.
[00:20:49] Could do all that. So I showed him that compound interest calculation. And if you put 5,000 away at this age, blah, blah, blah. And saw the numbers, but in his mind, he's [00:21:00] just, yeah, but I'm going to have so much that even if I don't put any away now I'll just put in double or triple lab when I'm in my twenties.
[00:21:07] And again, showing him, Hey, you actually won't have triple mat because you'll have, you're not going to make as much as you think. And everything's going to cost you more than you. And that's why my class makes them do a budget for 20 years of their lives so they can see how it will pan out. And the good news that they can't argue with me because of the choices that they made.
[00:21:30] It's oh, but you didn't have enough. On my end, I ended up retirement. They're 42 and I say, okay, you're halfway there. How much do you have? Here's how much you're going to need? Did you make it or not? And why not? And then we go through their choices because it's their choices that kept them from the goal.
[00:21:49] And so that is so powerful to help them understand how. So
[00:21:57] Eric: far, we went through the, when what and how, [00:22:00] but for some of you, you need to know exactly how to start. Well, Charla suggests that you use real world too, which I also agree with.
[00:22:09] Charla: All right. Money is a tool and, or an instrument, and you wouldn't just buy a book on how to play the piano.
[00:22:18] You wouldn't just lecture your kids. On how to play the piano. You would put a piano in front of your kid and let them play. And in the beginning it's going to be really bad and the same is true for money. So I would put money in the hands of the kid, let them practice, let them see how fast it goes, how long it takes the same percent.
[00:22:44] So often we know allowance, but we don't realize that if we are providing all the ones for our kid, what did I have to spend money on? They won't understand. So what I would do is I [00:23:00] would leave buying your kids. Want. To them with an allowance and you just on holidays and on their birthday and on school milestones, you can treat them to something special, but the rest of the time, Don't buy them snacks or candy or toys or any of that other stuff.
[00:23:24] Then let them figure out what they want. What's important to them and let them practice spending money. Let them buy something that is a waste because let a waste 30, 40, 50 bucks. Because if you don't let him practice and learn the feeling of regret, then when they're in, they're going to learn it when they're in their twenties and it's going to be a much more expensive lessons.
[00:23:50] So get money in the hands of the kids so that they can practice. And then also on the flip side of that, [00:24:00] kids should also be doing chores and then they should be working. So the kids who do chores. I do not believe money and chores should be tied together because then if they're like my daughter, she's such a saber, she thought, you know what?
[00:24:16] I don't need to clean the bathroom. I don't need the money. And then you got like a work strike. So I would require, have them understand about working and getting ready to work and have them have that. Self-confidence of doing a job. And then just as soon as they can have them earning money, whether it is things around the neighborhood, whether they dog walk or rake leaves or whatever, or then of course, when they're teenagers, they need a real job.
[00:24:50] With a real buyer and a real schedule so that they can learn some adulting principles, like how to manage all of those things, how to manage [00:25:00] coworkers and a boss and a schedule and all that. And then of course, they'll begin to see how hard it is to earn a dollar. It's a lot of work in for the little bit of money and that will help them understand and be grateful.
[00:25:15] The money that they do have.
[00:25:17] Eric: What's the best piece of advice you could give the parents out there?
[00:25:20] Charla: I would say that we talked about, we talked about time being short. And so that really, of course would be my best piece of advice is just to understand how little time to teach, speak into their lives that we have and to take advantage of that time.
[00:25:35] But I guess secondary would be that we all learn through experience. And when we rescue our kids, From these hard lessons, whether it's by providing them financially, all that they want. And so they don't have to learn how to save, or they don't have to learn how to make choices about if I spend this, I won't have enough for that.
[00:25:59] [00:26:00] Learning through experience is critical for our kids in these years. And so I would really have parents try to look for experiences, look for ways that their kids. Can it be experienced adversity? I didn't wake my kids up once my kids were a certain age. I don't wake them up for school and until I don't let them sleep.
[00:26:23] Cause that would be a bonus that I'll wake them up after they've missed the first 30 minutes and I'd say, Hey, you got to go. We got 10 minutes, you gotta leave. And they have to rush out of the house and they have to experience what it feels like to be late and walk into a situation. Rather than waking them up so that they're always on time, but he didn't college.
[00:26:44] No, one's going to be there to wake him up. And when they're in their early twenties, so learning that now allows my son. He's not late to his classes now because he learned how painful it is when you're late. So look for ways. While they're [00:27:00] young and you're right there to help them and guide them, look for ways for them to experience adversity so that it's not so painful and scary and lonely when they're doing it in their early.
[00:27:15] Eric: Sounds great as a good piece of advice, right there, always Charla. I want to thank you for coming on the show. Please let us know where the parents can reach you and possibly continue this conversation and what definitely you have going on in the near future.
[00:27:36] Charla: So my website is B and then beyond. P as in personal F and then finance class.com BPF class.com.
[00:27:49] And when you go to that website, you'll see a pop up, that'll ask you to subscribe and that's the best way to keep in contact with me and each one. I will put out [00:28:00] content on Wednesday mornings, where I talk through how to teach gratitude, how to change the language that you use to encourage them to save for the future.
[00:28:12] We talk about how to teach time and taking advantage of time and all those things. So BTS class.com is my website and there you'll see the curriculum. As well as be able to follow me. And then you'll see the upcoming classes. I usually have winter and spring semester where I teach and then I'll teach them, uh, at the start of summer and then I'll teach at the start of fall.
[00:28:38] So right now it's, we're taking. It's in December. So my winter classes are starting in first week of January. And you can find all that information on BPS class.com
[00:28:51] Eric: as always. I want to thank Charla for coming on the show and sharing so much. One of the main points I've definitely taken out of this discussion with [00:29:00] Charla is that as a parent, we need to take heed to which age we are going to start teaching on child about.
[00:29:07] The earlier than you have more time. If you choose closer to adulthood, then you have way less time, but then again, pick what is more suitable to you. If you feel they need to be at a more mature age by all means, go right ahead. And if you want to start from a much younger age, so it could be second nature to them by all means.
[00:29:27] Go ahead, but do what's best for you and your family? I would definitely tell you that. Do something don't miss the opportunity of changing your family from the foundation up. When it comes to family wealth, as always, as we close out the year, I would like you to share with other parents as you travel around and go meet other family members, let them know about the show.