85. Raising Money-Smart Kids with Veronica Karas

Certified financial planner and inspiring mom of two, Veronica Karas, joins me to share her expertise on teaching kids the fundamentals of financial literacy.  Drawing from her experiences, Veronica opens up about the importance of guiding the younger generation in understanding the value of money and making informed financial decisions. From budgeting basics to instilling positive financial values, this episode provides a treasure trove of insights for parents eager to nurture financially savvy children.

(02:43) Immigrant's Journey to America

(08:04) Journey to Financial Success

(15:02) Stress and Money

(18:57) Passing on Money Values to Kids

(23:29) Teaching Children About Family Budget

(30:47) Teaching Financial Responsibility to Children

(38:59) Scholarship Application Strategies and Success

(47:07) Teaching Kids About Expense Aware

Connect with Veronica:
WEBSITE: https://www.veronicakaras.com

CONTACT INFO:  veronica.karas@captrust.com

Instagram https://www.instagram.com/veronicakarascfp 

LinkedIn https://www.linkedin.com/in/veronicakarascfp/

PHONE NUMBER: (347) 445-42452

CTA: Book an initial call: https://www.veronicakaras.com/contact-veronica/

📺 Watch the episode on YouTube: https://www.youtube.com/playlist?list=PLOpw5ui4uxJHx0tLFVtpnfSkpObfc4d-K

You can find Katie at:
website: burntpancakes.com
YouTube: @burnt.pancakes
Instagram: @burntpancakeswithkatie
Email: katie@burntpancakes.com

🚽 Did you know Katie is also a Certified Potty Trainer? 🚽

☎️ Schedule a 1:1 chat today: Schedule Here
💻 Digital Potty Training Course HERE
📖 Potty Training E-Book HERE
🆓 FREE potty training resources HERE
Instagram: @itspottytime
Tiktok: @itspottytime_

Transcript

00:09 - Katie Fenske (Host)
Hello, hello, and welcome back to the Burnt Pancakes podcast, where we talk all things mom life. I'm your host, katie Fenske, and I'm here to remind moms that everyone burns their first pancake. Today we're talking about money. Now, if that absolutely freaked you out, don't worry, because talking about money freaks me out too. 

00:29
But what I've realized is that I don't think I'm teaching my kids anything about money. I want them to be financially literate, have a positive relationship about money and understand the value of it. They can't just spend whatever they have, or if they break a toy, it just doesn understand the value of it. They can't just spend whatever they have, or if they break a toy, it just doesn't get replaced right away. So I have a special guest on today, veronica Karras. She is a mom of two and a certified financial planner, and she's going to give us all the pointers on how to not only talk to our kids about money, but instill values, how to not only talk to our kids about money, but instill values how much money is worth and practical tips on how we can teach them financial responsibility. So please enjoy my momversation with Veronica. Veronica, welcome to the podcast. 

01:19 - Veronica Karas (Guest)
Katie, thank you so so much for having me. It's a pleasure to be here. 

01:22 - Katie Fenske (Host)
Katie, thank you so, so much for having me. It's a pleasure to be here. So this is a topic that I need help with. I have three kids and I really want them to be financially responsible, have like a good relationship with money, to not be scared of money and just like to understand the value of it. But I have no idea how to do it and so far what we've tried is not working. So why don't, before we jump into money, why don't you give me your background, introduce yourself, how many kids you have and how did you get into the world of finance? 

01:54 - Veronica Karas (Guest)
Yeah, absolutely so. Thank you so much for having me. So first, I have two kids and almost three year old He'll be three at the end of January and a nine-month-old. So it's been an exciting year. 

02:08 - Katie Fenske (Host)
Yes, you're busy, oh my gosh. 

02:11 - Veronica Karas (Guest)
I'm busy. I'm looking forward to a little bit older and also my nine-month-old could really start moving on his own, because he's like 90th percentile in size and my back is killing me for whatever that's worth. 

02:25 - Katie Fenske (Host)
Yeah, I was just thinking I was like I do sort of miss that arm workout that I used to get. I was looking at my arms and I'm like, oh remember when I had littles and I held them all the time. I'm like I actually got an arm workout. But yeah, that is a very hard age. 

02:38 - Veronica Karas (Guest)
So yes, yeah, I am in it. Um, it's a blast. I'm very fortunate to have a great support system. I know not everybody has that and I was raised by a single mom. I'll get into my background, but I was raised by a single mom, so total like a world of difference having a support system. I know that. I'm very blessed, but my background is so. I'm a refugee immigrant to the United States. 

03:02
I came with my family from Belarus in 1994. Okay, I was almost four when we came and I came with my mom and her parents. So, as I mentioned, my mom's a single mom and we kind of all live together. We came with two suitcases and $40 each and my mom didn't know what America had, so she packed pillows and pans when to fill those suitcases and like this tiny little envelope of photos from before I was four. So I grew up really poor. 

03:39
My mom worked three jobs. We all lived together. My mom worked three jobs, my grandmother took care of me and my grandfather, uh, also went to school. He got his master's and his phd in social work and um and then started working eventually. But my mom worked three jobs and kind of carried the family for a while. Um, and you know, my grandmother took care of me. My grandparents ran a mental institution in belarus before we came here, so if you want to know where all the really fun family dinners are, that would be there. And you know, at some point I started working when I was 14 years old, because I knew I had to pay for college. 

04:16
And at some point, you know, my grandfather asked me to look at all of his financial stuff that he had going on. He was able to bring, you know, a small amount of money let's call it $40,000, was his life savings, was eventually able to bring that over to the US, walked into a local bank and spoke to the only Russian speaking person there and who gave him horrible advice and basically took advantage of him from a financial perspective. And when I started working, a couple of years into that, when I was a junior in high school, he asked me to look at his financial stuff. He was like you've been doing taxes in the U S. Maybe you know something about this, cause I can't understand why my money keeps going down. I don't understand what these are. 

04:57
And so this person sold him nine annuities across the $40,000 worth of assets and they were terrible. There were good annuities out there. These were not them. They were like guaranteed 1% return with 3% fees, and he lost money all the way through. But of course, I didn't know that. I wasn't financially literate. So I took it to a social studies teacher at the time. I asked him to look at it and he was like look, I don't know how to tell you this. Like, look, I don't know how to tell you this, but I think your grandfather was financially taken advantage of and I started doing online research and looking up everything I possibly can and learning about annuities and then I decided that I wanted to be a lawyer who put bad financial advisors in jail, because I felt so strongly, for my grandfather was like a brilliant human. He just didn't know how the US financial system worked and he heard the word guaranteed and didn't understand anything else about it. 

05:47 - Katie Fenske (Host)
Right, and we're trusting people like as humans. We trust, yeah, exactly Someone's helping you, yeah. 

05:54 - Veronica Karas (Guest)
And so he is ever the optimist. And he said hey, you know, maybe instead of, you know, wanting to be angry at the world all the time and be an attorney in that regard, you might want to find a way you can help people, maybe avoid this or something else. So when I went to college, I didn't know what that career was. I didn't know what a financial advisor was, to be honest, or a certified financial planner. But I went to business school and got a business degree. So I was like that's got to be the right way to go. 

06:23
I interned for a life insurance company because that's who I knew sold annuity products I didn't know anything else in the world but I had figured that part out and to learn how they were sold and you know what makes somebody sell annuities and how all that works. When I was there, I learned about the concept of a fiduciary financial advisor, which is somebody who's legally obligated to do what's in your best interest, and learned that there's a subsect of the financial industry called registered investment advisors that by definition, are fiduciaries, and I was like that's my people, I'm going to find those people. 

07:01
I want people who are doing the right thing to prevent what's happening for my grandfather and I, joined in a registered investment advisor after the internship and spent, you know, five years at a small firm and then in 2015, actually, the Obama administration was looking to pass the fiduciary rule, which would mean anybody that was advising anybody with a retirement account had to give them advice that was in their best interest. There were a bunch of super large firms looking to help, looking for people to hire out of the registered investment advisor space who already had fiduciary experience to see if to like help them meet the rule. The rule never actually passed, but I took one of those jobs. It was a mistake. I only lasted like eight months because, spoiler alert, broker dealers don't actually want to do the right thing. They want to make it look like they're doing the right thing, and it's just so hard. 

07:57
It was a horrible environment for me. I actually got really sick working there just from ethical issues and stress. And then I met my now partners, which was like 10 years ago now and have and am now the principal and a partner here on my firm is Cap Trust and we are one of the largest fiduciaries in the United States and get to do help people make their dreams come true in a way that you know is doing the right thing for them and for their families, and so that's that's my story. That's my story and you know I did. I couldn't have told you at at 14 or 15 or 16 that I'd land here, but it's been quite the journey and I, you know I love it. I get to, it's true, I really do get to help save people from really bad financial advisors in just a positive way. That's not, you know, putting bad financial advisors in jail. 

08:55 - Katie Fenske (Host)
Right, right. I love how each little piece of your story led you to where you are. 

08:59 - Veronica Karas (Guest)
Yeah, that's really cool and it to be. You know, that's how most people. I think eventually get to where they're going. 

09:07 - Katie Fenske (Host)
Right. I think I've heard of fiduciaries a little bit. That is one that you have to do a lot of training and tests for right. 

09:16 - Veronica Karas (Guest)
Yeah, so I'm a. I'm a certified financial planner, so there's different. You could be a fiduciary with just one exam. It's a series 65. It's just how you evaluate investments. But that's not really what makes you a fiduciary. What makes you a fiduciary is how you think about how you give advice. So I'll give you a really simple example. 

09:35
Like in the investment world, there are mutual funds. Most people are somewhat familiar with mutual funds Often they pop up in people's retirement accounts as an example and mutual funds the same fund is issued in multiple classes and if you look at your investment statement, it will say something like XYZ Mutual Fund, class A or Class B or Class C or I or Z or six whatever. All of those vary based on how the person recommending them is being paid. In other words, you can buy the pure mutual fund, which is usually I shares or institutional or investor shares, and the advisor receives no compensation for putting that fund in your portfolio. So you are just buying the fund. The advisor is recommending the fund because they think it's a good fund. They're receiving nothing for putting it in your portfolio. They probably get paid by you in other ways, whether that's a flat fee or assets or manager or something else, and they just get paid for giving you good advice, right? So you would know that your advisor is sort of purely doing what's in your best interest. 

10:50
If you look at your statement and you see an I share, because then they're not receiving additional compensation All of the other share classes come with it fun bells and whistles for the advisor. So an A share usually has what's called a front load. So the advisor gets paid up front for putting dollars into the fund, got it? And the annual expenses on it are higher because they receive an annual commission for keeping dollars in the fund. Oh, heaping dollars in the fund, oh, interesting. 

11:29
And so that would lead you to the question of why are my dollars in this fund? Is it because you get compensated a lot for it or because you actually think it's a good fund, right? Or the best for me, right? And so the way I like to somebody like gave me this parallel one, so I think it's a good one. The best way to think about a fiduciary is like um, if you're buying a suit or you're buying a dress, you're buying anything. You're buying a suit, uh, somebody who is not a fiduciary can sell you the suit a fiduciary has to make sure it looks good on you too, like it's the best for you, Like you're the best suit on the planet, but if it's not the best for you and is in your best interest, that's what matters. 

12:13
So when I spent like that brief period of time, I spent working at a large broker house. One of the things that would happen and in the industry this is called soft dollars is mutual fund companies would go to the brokerage house every single week and they would say, hey, we're trying to get as many dollars as we can into this fund. X, Y, Z, class C. The advisor who raises the most dollars in your firm for this fund in the next week gets an all expenses paid trip for two weeks to Hawaii for a family of four. And it was like that exuberant and luxurious. The incentives were like $50,000 trips, $25,000 gift cards, and then it's. And then everyone would scatter and start calling clients and trying to raise money into these funds. 

13:09
They know nothing about them, they don't care, they're not even nobody asked a question. How is it performing? Who is managing it? What is it invested in? How risky is it? None of that is being yet. It's just. I'm trying to win this trip to Hawaii, and that is really the substantial, meaningful difference between working with a fiduciary and not working with a fiduciary, in that in a fiduciary, we don't have that In our world. We have something called a no golf ball rule, where we don't take even anything as small as a golf ball from a vendor because we don't even want the potential for anybody to like sniff out any semblance of a conflict of interest, whereas someone, a broker, day our house is getting like a fifty thousand dollar, all expenses paid, trip to like hawaii, wow, wow. That's really the big difference and it is. I think people um, obviously people don't know that it's not like people like publish that this is happening advertise happening. 

14:08
It's not, you know when you're signing up with someone they're like, by the way, you know that's not what's happening, but it's why it's so important to like work with a fiduciary. And the sad part about the industry is there's some regulation but there's not enough regulation around this. It actually doesn't. So most big wire houses or broker dealers have opened an entity that is a fiduciary and the advisor kind of has it, can call themselves a fiduciary because they're operating under the umbrella of whatever that entity is, but they can sort of switch the proverbial hat around and actually be sales and commission driven. 

14:50
And very seeing it says you want to look for a pure fiduciary, somebody who only gets paid by their clients for giving good advice that's it Like receives no compensation in any other way. 

15:02 - Katie Fenske (Host)
So interesting, also so stressful. Like just hearing the word retirement and like I instantly start stressing I don't know why I have this like relationship with money that I just freak out Like anytime my husband like wants to talk about money stuff, I'm always like, okay, I need to prepare first, cause it's even if it's like the littlest thing. How do I not put that off on my kids? Like I don't want them growing up freaking out about money, like I try not to. I don't know if this is good or not. I try not to talk to them about like we can't afford that or that's too much, cause I don't want them feeling that way. But I don't know if I'm teaching them we can afford anything. And now it's like they break a toy and they just go I can get a new one, mom, and I'm like, no, we actually can't, because you broke it and I'm not paying for another one. So how do you build like a positive relationship? 

15:50 - Veronica Karas (Guest)
I think it's definitely hard and it's a challenge and, by the way, like growing up poor and then like coming out of that, I have so much money, like there's money baggage related to it. It's so hard not to instill that on your kids and like I think a lot of it is like the language we have internally around money and not, you know, passing it on to our kids. 

16:10
Like I hear people say, like money doesn't grow on trees or I'm not made of money, like getting away from all of that and thinking about like whoa, what more like what, instead of like what not to do, more of like what to do, right. And that is like make kids aware of the exchange of time for money early on, I think is really, really important, right? So, like most people, work and put in time, fixed amount of time equals fixed amount of dollars. So I'll give you an example. I didn't learn this, of course, because financial literacy isn't taught in, uh in school my mom did a very, very good job actually of hiding how poor we were. 

16:52
I think I only like acknowledge it in retrospect as a parent, but she did an incredible job um making me feel like I, you know like had everything you needed, yeah, yeah and so, um you know, hindsight is sort of 2020 in that regard, but you know, like had everything you needed. 

17:05
Yeah, yeah and so, um, you know, hindsight is sort of 2020 in that regard, but you know, one of the things is, when I first started working, my first job was at a subway sandwich store and I made five dollars and 25 cents an hour and I very quickly figured out how expensive the movies were, because it was like a lot, and now it's even worse, but it was like nine dollars for a movie ticket. So, after taxes, my 525 an hour was like I don't know four bucks right. 

17:30 - Katie Fenske (Host)
It's like I have to work how many hours in the movies, yeah right and so, like I think, creating that early on. 

17:38 - Veronica Karas (Guest)
It's why I love like parents who institute like chore chart systems. You know my, I came up from the upbringing like you all. 

17:44
My contribution to you is we have a roof over your house you have to contribute like to the house yeah but I think there is some value in making some tasks that maybe are go above and beyond stuff, that are beyond, like we all live here so we all contribute to the house, some like pay tasks, right. So you know, my neighbors have a slightly older kids that you know will you know mow lawns locally, or for snow, you know shovel for snow, and I think that's really like good skill building things, um, dog walking, babysitting, those kind of like low-hanging fruit thing early, early on, and and that's when there are siblings in play, right. So you know, my son is only three, but an example I gave my husband recently is when he's a little older, maybe when he's like six or seven, we can say like if you do these things for your brother, cause it's not really his job to take care of his brother, but if he does those things for his brother, like folds his brother's clothes after the laundry, he would get a dollar as an example, like something relative, you know, relative to the work that's being asked I think is really good. But if you have stuff with money you're, it's really hard not to pass them on to your kids. I think that's true of any category of life. But I would say, like if you have a fear around money. That's actually very, very different. Like you know, I have some clients who don't like to talk about money and I call them like you're acting like you're allergic to this conversation and that's kind of like a funny way of saying it. But yeah, you don't want to pass it on to your kids. 

19:25
So, like, one of the things is figuring it out, figuring out what you're. What in money are you comfortable with? So are you comfortable just like counting money? Like that is they actually do teach you in school. Like are you sitting? Are you comfortable sitting there counting money? If you're not comfortable sitting there counting money, uh, which I've yet to encounter, actually most people will like count their pocket change or count their dollars. Start with teaching your kids that and making it with like what that buys in today's dollars, so like, start with lowest hanging things. 

19:58
So, like you know, even I will tell my son who's three. So his favorite, new favorite thing is he likes chocolate covered popcorn and he likes it only the chocolate covered popcorn that comes out of moose munch from Harry, milk chocolate, moose munch from Harry and David's. But he will just pick out the chocolate covered popcorn. You know he's almost three. But so I started telling him you, you know this moose munch which we bought at like tj maxx or whatever cost, 5.99 as an example. It's six dollars. If you start taking out your take, you're only using you know a third of it, which he doesn't understand. But I said, how much of the total are you eating? He's like, well, well, this much. I was like like that much costs $2. 

20:47 - Katie Fenske (Host)
Yeah, so they're starting to get the concept of it. 

20:49 - Veronica Karas (Guest)
Just just like really basic, that like things cost money. He doesn't understand it, he's three, he really doesn't but it's just building that foundation that, like everything around us costs money, right. And then I think you know I teach this concept when I teach money in elementary schools. I teach this concept of that. I have actually it's. You know, when you get a dollar, you get ten dollars. Whatever it is, find a way to save some, to share some and to spend some. 

21:25
And I have these little like glass jars. 

21:27
I have them at home too, where anytime, like hopefully, as my kids get older, they get money gifted to them, I want them to save some, to set aside some to spend and to share some, like give it away to people in need. 

21:42
So you know, like if you got $10, maybe you want to save $2, maybe you want to share $2 and then you want to spend $6. As an example, right, just coming up and like teaching the concepts that like money is limited, what are you going to do with these $10? And like kind of forcing those decisions, because kids will you know it's how you guide them that they're going to like start to think about the framing that you know it's not all for them, or it doesn't necessarily need to be for all for them and doesn't all need to be immediate. So, like the biggest struggle I think from what I've seen of like kids of my clients who grow up wealthy, I'll say, is this very sort of that mentality you mentioned, like we could just get a new thing. We could just get a new thing, whatever it is it breaks, I'm just gonna get a new thing. And if you start being like things are finite, like this, just no, we like we really really can't and like this is our budget and whatever the case may be. 

22:47
And even like when we go to the store now to get uh toys, uh like if we're a target or whatever shop, maybe like you can get one toy and it's less than five dollars, and I try to show him on the labels because he knows his numbers, like if the number in the beginning is less than the number five on the label, you can buy that toy. You know, just like very basic little things. He doesn't get it half the time but he's like I want this really giant thing. It's not. But it's not about that. It's about like kind of doing the same thing over and over again until one day he is. He's gonna be five or six years old and he'll be like what number do I need to look for on the label? You know we'll, we'll get there. Um, the other thing is I think most parents are really secretive about money with their children good or bad, by the way, like my mom was. 

23:37
She had. She didn't share how poor we were, which I understand. I think giving kids some level and not super, not as young as my kids are some level of insight into like the family budget as a whole. You don't have to tell them how much you make or how much you have in assets or anything else, but we spend, you know, money. Mommy and daddy have this. You know total amount coming in and you know we spend this amount per month on. You know we spend this amount per month on the house and we spend this amount on food. And you know when we go to the store. Do you remember when we were at the grocery store the grocery bill was $300. You know we have to take that out just like. 

24:27
So they're clued into a little bit how you're thinking about managing your family budget. You don't have to get like super specific. Even you can kind of just say, like you know, for for clothing, we have this much to spend this season. Is there anything you need? Like just so they start like that things are finite. I think there's a. The concept of unlimited money is hard to move away from and it's actually very hard for kids who get older, um, who grow up thinking that money is infinite and then they start making their own money and they have to make decisions within a finite amount of money. 

25:06 - Katie Fenske (Host)
It's actually a very hard transition yeah, I could totally see that, because my oldest it's like the minute he gets money he just has to spend it and like we'll just be out anywhere and he'll be like, oh, I, just, I want to buy something. I'm like we're at a pet store, you don't need to buy anything here, you know. But it's like that feeling of having to buy something. I'm like we're at a pet store, you don't need to buy anything here, you know. But it's like that feeling of having to buy. So like I try and like you don't need all of that, you can save some of your money. But he hasn't like really gotten that yet. But he keeps asking if he can get a bank account. So like, at what age do you think it's appropriate to have a kid open a bank account? 

25:42 - Veronica Karas (Guest)
immediately. I opened them for my kids when they were bored. I can't wait for my kid to ask that question. 

25:48 - Katie Fenske (Host)
Yes, you know you would still be going, I just don't know if I can like man, because now everything's like online and you need an email address, you need this. When I was a kid, I literally had that bank book that you took to the bank and they printed on there, so it was easier for me as a kid to keep track of everything. Now I'm like, wait, you would need an email and a password. And uh, and do I use my bank? Do I do a separate one? 

26:09 - Veronica Karas (Guest)
I don't even know how to start well, you could do it under your email and password. Open up a studio account for him and he doesn't have to go online. He could still have the physical in the bank presence so he could still go to an atm machine to keep track and you can have paper stuff. Just go for that one account to him. You're still the custodian on that account. But I think it's great for kids to see, especially now that savings rates are actually kind of attractive these days, to see you know compound interest and growth, like working for them over time and get interested in saving. 

26:45 - Katie Fenske (Host)
He did ask me about interest the other day and I was like where are you hearing this? And so I like explained like when your money is in an account, it like makes a little bit each month. He was probably thinking, oh, I'm gonna put my money in. I have to get him to the point to realize, like you put money in savings and you want to keep some of it there. You don't just want to. I think he just wants like a debit card and I'm like there has to be money in there to spend. We're trying to get into that. But again, like we're trying to figure out chores and allowance and like all of that, like I they do normal jobs around the house but don't really get paid Cause it's like clean up your toys, like that's just something you have to do. Make your bed, you have to do that. 

27:25 - Veronica Karas (Guest)
Yeah, yeah. So I actually got that strategy from a client he used to have like um, everyone in the house has like five things they're responsible for at whatever those are. So like you have your five things, your husband has his five things, you bring your kids have their five things, then for everything you do do that's not your thing you can make five dollars. So if your kid does one of your chores let's say it's your husband's chore to take out the trash, as an example and your oldest son does it that week he would get five dollars because he took something off your husband's plate. I like, and it like it's the going above and beyond thing. But like everyone's responsible to contributing to the house, you don't get paid just for contributing to the house, and this is how the real world works. A little bit too, you get paid for the above and beyond stuff. So if you want to take something off of my plate, you want to help your younger sibling with something on their plate, you can make extra money doing that. 

28:24 - Katie Fenske (Host)
I like that because that? Because I'm always torn between. They have to do chores, to be part of this house, but how do we also give them an allowance? Oh, I love that. 

28:31 - Veronica Karas (Guest)
Okay. 

28:32 - Katie Fenske (Host)
And it's. It's them like taking the initiative to do something too. Like, hey dad, cause the other day they did say, can we clean your car and get money? And it's like, yeah, like that would be very helpful for us, Then I don't have to do it. 

28:46 - Veronica Karas (Guest)
Yeah, that's exactly right. So those above and beyond things, and you can even have so my my client had a list of like everything that gets done. So they did it as a family meeting. Everybody picked their five, basically, and they broke it up. He had three kids, so they broke it up so that you know basically 25 things that need to get done in the house every single week. Each kid picked their five, age appropriate of course, and the parents kind of got whatever was left over because they were like whatever we're doing, all 25 right now anyway. So they weren't that picky about it. And then the rule was, if you do any of the other chores that aren't yours, you get. You know, for the younger kids it was like two dollars and as they got older, at different ages, you got different amounts so from what I remember, so, like uh, they're like 15 year olds would get five dollars for each additional thing that they did, or whatever we're gonna implement that. 

29:38 - Katie Fenske (Host)
I need something. We need to get get going I didn't make it up. 

29:42 - Veronica Karas (Guest)
I have to give full credit to somebody else, but I really liked it and I was like I have to remember this for when I have children. It was a while ago, but I was like I have to remember this for when I have children Cause it's good it did. You actually get some work off of your plate too. And they were like, look, if there are weeks where my kids decide not to do those extra things and just go back, then we do them, like whatever, right, right. 

30:06 - Katie Fenske (Host)
I think, too, I need to get better at like letting them helping them like find a goal. You know, like I, my kids don't really like I want to save money to get this thing. But I want them to have that feeling of like I'm earning money, I'm earning money and now I get to get it. I don't, I don't really know how to have that feeling of like I'm earning money, I'm earning money and now I get to get it. I don't, I don't really know how to start that. I don't know if it's. Someone did say, because my oldest son plays sports, and they said and it's very expensive, like the equipment and all this to have very expensive, but part of something he uses, so he feels more like invested in that sport and like I contributed something like that. 

30:53 - Veronica Karas (Guest)
Yeah, absolutely. And that goes hand in hand with, like eventually, when they go like go to college, you want to pay for some of it, but maybe not all of it, because you want them to have like a financial stake in it, right, and so, um, more expensive sports I would advise for that. But, like, maybe you know, for younger kids, um and I don't know if you're in the suburbs, I'm in the suburbs Every kid around here like saves to eventually get a car. And one of the great lessons you can start with is you know how much it really costs to own a car on an ongoing basis, like because you don't just buy the car and you're done. You need car insurance and gas money and you know if something goes wrong maintenance, right and just like talking about what it really looks like to own a car and like that could be the first like sort of life thing that they save towards. And then over time, it's like well, how much does it really cost to own an apartment or own a house? Right, and you kind of build on that, um, and the thing I always say is, like if you don't really know what you're saving for, you're saving for freedom. 

32:00
So I always say this to kids, typically high school age. I always say look, there will inevitably come a time where you want, you want something and or you are working in a job that you are miserable and you hate. You are working in a job that you are miserable and you hate. The main thing that saving and investing gives you is freedom to walk away from that if you have to, without impacting your lifestyle. Like I remember being stuck in a job I hated because I had to be there, because I hadn't adequately saved Granted, I was young, but I hadn't adequately saved for my life. I couldn't just walk away from it. And if you can start sooner with, like putting money away as soon as you make your first dollar, you're just creating moments of freedom in your life. 

32:48
Whatever that looks like for you Maybe it's walking away from a bad boss, maybe it's taking a trip you really want to take, maybe it's buying a car, maybe whatever those freedom things look like moving out. Whatever it is, if you don't know what you're saving for, you're saving for freedom, because that's really what it gives you. Is like permission to walk away from any situation or just like make a spontaneous decision to go travel to Europe or whatever it may be, without going out on credit or to racking up debt or making bad financial decisions down the line that could really negatively impact you. So that has always landed really well when I teach high school students in terms of just like, if you don't know what you're saving for, it's for freedom, and for adults, it's eventually we will all hopefully retire, yeah and that's all all. Retirement is sort of like ultimate freedom. You save enough to be able to not work anymore. Save and invest notes not be able to work anymore and the rest is semantics on how you do that. 

33:50 - Katie Fenske (Host)
Yeah, yeah, okay, going back to college really quick. What do you suggest is the best way for parents to start saving for college, like we opened our accounts with for our kids when they were babies? What's the best thing to do? 

34:17 - Veronica Karas (Guest)
plans depending on the state. Like some states have tax deductions, others don't. In the states that don't have tax deductions, you still want to fund a 529 because what you get is the tax-free growth. So that's a benefit because otherwise you would be saving on your own and then the growth becomes taxable. The important thing with when you open accounts for your kids on the 529 side or really any accounts is to get them invested as early on as possible. So a lot of people just accumulate. 

34:39
Cash. Problem is like college grows the cost. College on average has grown at about four percent a year 3.88, something like that. You need to be invested because cash does not typically keep pace with that right, so you need to be, and for your kids it should be pretty aggressively invested, honestly, because they've got pretty long time horizon, like if you start saving for when they're babies yeah, 18 years until college, even if the market goes up, like you know, up and down like 18 times in between then now you just need the money when they're 18 or even you know if you're you're gonna pay somewhat out of pocket or your kid is gonna pay out of pocket. You can leave the money in the 529 until the last year of college, last two years of college, you know um and then pay for it and that's a great thing to help your kids. Kind of balance it either, as you plan to pay for half or three quarters of it and you make them cover a quarter or half of it and like that way, they're committed to to doing it. 

35:37 - Katie Fenske (Host)
And what happens? Oh, go ahead, no, no, go ahead. What happens if, because we have three kids, let's say, like in the perfect world, number one doesn't use all of his, can you roll it over to the other kids and let's say number three doesn't use at all? What happens to it after that? 

35:57 - Veronica Karas (Guest)
So there's a couple of things. With Secure 2.0, which passed in 2022, you can actually have $35,000 that you have in a 529 plan can roll over to a Roth IRA for the same child who was the beneficiary of the 529 plan. So you do it over annual limits and the account has to have been open for 15 years. There's a bunch of perks but there are rules around it, but essentially $35,000 can roll to a Roth IRA. So actually your best course of action, if you can fully afford to pay for college and have some leftover, is to plan to have $35,000 leftover for each kid, because you can then fund Roth IRAs for them and that just keeps that's tax-free growth, basically for the rest of their lives. It's a home run, also a good reason to keep them aggressively kind of aggressively invested. For that reason, if you can absolutely transfer between kids, more importantly, you can actually leave the money behind in the in the 529 account and your kids can use it for their kids down the line. Like there is no time you have to withdraw the money from a 529 by it can. 

37:11
It's an evergreen account. So you know, once your third is done with college, if you leave the other two accounts open. You can move money back around with whoever's left, right, because you can move. You can move between kids an unlimited amount. Now let's say, at the end of it all, by the time your third is done with college, you have $50,000 left. Well, great, you can. You can split it up between your kids and then they'll respectively roll their balances to the rocks. Or if you don't want to do that, just leave them and when they have kids, it'll be the start of an education plan for their kids. 

37:46
Wow, actually really good legacy planning Actually very good. 

37:50 - Katie Fenske (Host)
Full scholarships for all three of them. 

37:54 - Veronica Karas (Guest)
Yes, college is expensive for three kids, especially when you have them close in age or anything like that. You end up with some overlap. 

38:00 - Katie Fenske (Host)
It's super expensive right now, like as the parent you start looking at like, gosh, that jc down the street seems like a great option now as opposed to going out of state and doing all that. But we're not quite there yet. But we're saying we're starting to save yeah, I mean. 

38:18 - Veronica Karas (Guest)
So I never got to pay, you know, I never. I knew nobody was paying for college for me, just circumstantially, and so for me I just I saved early on, um, and I went to a city school. 

38:31
I went to you know a city university of New York school and got some scholarships. That's. The other thing for anyone who's listening, by the way is there is an annual list. It used to be a physical book, but now I'm pretty sure it's online. If your kid's in high school, the guidance counselors will have it. That is a list of all the available scholarships in the United States and there is literally a scholarship for everything. Yeah, I have to tell you. So I got like. 

38:59
So I made it my summer before college. I made it my like job to write essays and apply for scholarships and I just thought about it as earning money, because any money somebody else was willing to pay as money I didn't have to pay, so money I didn't have to pay. So you know, I got like all like uh, first time American woman going to a business school in New York. You know it was like 250 bucks, but like that's $250. It's like everything else. And my first year of college is actually funny. When I went to um like the bursar's office at the college, they were like you had like 27 teeny tiny scholarships on your record. What is this? 

39:38 - Katie Fenske (Host)
I was like I did, I worked for yes yes, you know, I actually interviewed reapply and, yeah, I interviewed a man who that is now his like side gig is to help kids and parents go debt-free, and his son is about to graduate from college having not spent anything but like he'll send like daily here's another scholarship, here's another one. I'm like this is incredible, like there's yeah, yeah, it just takes like applying for him. You're right, it's like a little bit of a job, job yeah, yeah, and it's totally worth it. 

40:13
Totally, and I love that that you can tell your child like this could be. Your job in high school is to apply to these things. Yeah, yeah, oh, my gosh, so interesting. Now I do want to talk about. You have a book also. Um, yes, money matters. When did you write that and what made you write that when? 

40:33 - Veronica Karas (Guest)
did you write that and what made you write that? So it's actually a series of three books, so first one came out in 2019. That's the one that was sitting on my heart the longest. It's called Money Matters Everything you Should have Learned in School but Didn't, and it was like the thing I wish somebody, everything I wish. 

40:54
Somebody taught me before I graduated high school was basically what I tried to put into a book. I tried to do as best as I could because I really wanted to drive home the impact. I truly believe if everybody really understood what an 8% student loan does for the rest of your life, nobody would take student loans and I think the reason we have such a student loan crisis in this country is the lack of financial literacy. 

41:19
I know a lot of people talk about like predatory practices and all of that. Predatory practices and like what happened with my grandfather wouldn't work if the people had financial literacy education. It's the education component that's missing, and so, you know, now, thanks to CAPTRUS, we have like a nationwide financial literacy program and all these things that I'm just it's like a huge passion of mine just to break that on a generational basis. And, you know, not for nothing. There's huge amounts. This is big in California, not as big in New York, but there are huge amounts. There are many, many places that are rolling out mandatory financial literacy courses. Quality of those courses are questionable at the moment, but it's progress. It's something You've got to start somewhere right, and so that's been a huge project, but that's really what led me to write that one. And then the second book is Money Matters, merging Lives, merging Finances because I think related to not having financial literacy education. 

42:23
Money is also like one of the top reasons people get divorced, and so, other than being a certified financial planner, I'm also a certified divorce financial analyst. I help clients through to divorce on the financial side and it's ruinous. Like the worst thing you could do from a financial perspective is get divorced unless you have a really good prenup. And so I was trying to help really facilitate conversations about money early on in people's relationships, like even when you're it kind of that book kind of goes in phases, like when you're're dating questions you want to ask your partner about money so you get a good feel for their like money mindset, their habits. You know you don't want to be a super saver married, uh, to somebody who is a super super spender, who, like, cannot keep a dollar in their bank account because that's your recipe for yeah, or someone who has really different money values than you. 

43:20
So I'll give you an example I had a client who recently got divorced because they really wanted like a quaint lifestyle, like when they got married. Like they really wanted like a small house in the suburbs. They don't want anything crazy, they don't want a luxurious lifestyle. And they married somebody who wants like a penthouse apartment in the city, like big gala parties, you know, whatever, and like that's a money value disparity thing. Like is just, you know they couldn't make it work, which probably intuitively makes sense, but does it when you're falling in love? 

43:57 - Katie Fenske (Host)
you know you miss those things. 

44:00 - Veronica Karas (Guest)
Yeah, I overlooked that. And the third book, and not the last. I've got two more in my head and on my heart, but when my kids are older, the third one is Money Matters Avoid Getting Sandwiched Out of Retirement. I like to think that's my for the parents book. That's really like how you plan for your own retirement If you have to take care of aging parents, how you handle that and raising kids and how you save for them and pay for college and make sure you can still afford to retire. So I'm trying to come up with a series of like going through life. So the next one will be about retirement and the last one will probably be about legacy planning and all of that. But so awesome, I've got a little. I've got a little series in my head that will eventually come to life. It's just not a whole lot of time to write. 

44:52 - Katie Fenske (Host)
I can totally see why you got the kids. You got the job, yep, totally, oh my gosh. Well, thank you so much for sharing all this. This was so much to think about. I think my husband and I need to sit down and we need to come up with a good plan for teaching them this literacy, like it really is an important thing for them to understand. I feel like I was so overwhelmed that I just like didn't do anything. So now it's like oh, you gave me some very easy examples of like you can implement this tomorrow. 

45:18 - Veronica Karas (Guest)
Yeah, and I think whatever you're comfortable sharing with your kids, share them early on, especially as they get older. Like even decisions you have to make. Like I wish my parents included me a little bit in some decisions they made. Like it doesn't have to be big ones. But let's say I'm going to use a stereotypical example You're going to Disney and the Disney trip costs X, y and Z. 

45:38
I think it's actually okay to share with your older kids. Like how much that will cost, and you have to decide whether you're going to get the whatever the equivalent of the fast passes or whatever it's going to add x amount per day. Um, the trip already costs this. Is it better to get the fast passes or have a nicer dinner or go to lunch or whatever? Like find the little things you are making decisions about that you can teach your kids even at the grocery store. Like you're looking at milk versus organic milk. Like what are the decisions going through your mind? Of course you want the best for your family, but you know you only have X, y, z. Isn't it? Like just bringing some awareness, like price awareness, cost awareness, money what I'll call money awareness to children? I think is just a huge first step for a lot of people Right. 

46:29 - Katie Fenske (Host)
Because we want our kids to go off on their own and be okay, and this is one little facet of it. 

46:35 - Veronica Karas (Guest)
Yeah, and you people consciously or unconsciously make money decisions all day, every day, like whether you're going to, if you're going to, stop in and get Starbucks in the morning versus making your own coffee. Is is a financial decision. Maybe it's also an emotional or habitual one but it is also a financial decision. 

46:54
You know I hate that example because I feel like everyone's like just cut out Starbucks and you're going to be like wealthy, and that's not really the advice, by the way, but it is just awareness about where your money is going. Right, and I think if you start bringing your kids in on like the awareness of the expense of things, like you know, my um, my friend, has a teenage son and she actually taught, started teaching him how much the clothes, the outfit he was wearing every day costs, like this your t-shirt is x, your hoodie is x, your jeans are x. Your, you know, your, your sneakers cost this amount. Whatever your backpack is this and like you're walking out the door wearing 550. You know whatever it is like. 

47:40
And she did it more from a take care of your stuff perspective because her kid wasn't right. But it starts with that money awareness starts with that like. So why kids like throw their stuff around, they don't take care of their stuff has to do with the lack of awareness of like money and what it really costs. It's like if you start young, I think you can build up to it and she just started it later, but she's doing it. You know her kids like more aware. She's like just seeing it. She was like remember how you babysit or you mow the lawn or whatever. You get $10. You have to mow 55 lawns to pay for your outfit. 

48:17 - Katie Fenske (Host)
That's brilliant. Love that yeah. My son has a trumpet that the school loaned him and for about a week he couldn't find it. So we had to explain to him if you lose it we have to pay the school $350. And I'm hoping he's been more careful since we talked about that. But you're right. It says, oh, you'll have to do X amount of chores to pay for that. 

48:41 - Veronica Karas (Guest)
Yeah, it would make more sense to him. Yeah, just like I said, just money awareness. It's not about like instilling fear or anything. It's just like making them aware that like it's a very real thing that you have to make you make daily decisions about, because I think a lot of adults leave their kids out of the daily money decisions and if you just clue them in a little bit doesn't have to be a whole lot, but just a little bit slowly then they will be more confident when they have to make those decisions themselves. 

49:10 - Katie Fenske (Host)
That's awesome. Well, thank you so much. This was very eye-opening, got so many pointers and you're a wealth of knowledge. I love it. Well, thank you. 

49:20 - Veronica Karas (Guest)
I appreciate that. Thank you so much for having me. This has been a blast and if I can be helpful to anyone, just feel free to reach out to me anytime. 

49:26 - Katie Fenske (Host)
Yeah, can you share where we can find you? I'm going to put it in the show notes, but also you can tell us. 

49:31 - Veronica Karas (Guest)
Yes, the easiest way is VeronicaKariscom. You can easily email me from there. Or, if you want to email me, it's just Veronica at VeronicaKariscom. I try to keep it really, really simple and I really welcome like contacts email. I'm happy to help everyone, especially anyone in a tough situation or if you don't know if your advisor is a fiduciary, if you're on track for what you want to say for your kids, all of that. I'm happy to just be a second pair of eyes for what somebody is already doing. 

49:58 - Katie Fenske (Host)
Well, thank you for all that you're doing. 

50:01 - Veronica Karas (Guest)
My pleasure. Thank you so much for having me. 

50:06 - Katie Fenske (Host)
Wow, I got so many tips from this episode. I cannot wait to implement that chore responsibility allowance chart and help my kids learn more about spending, saving and sharing. So those were two of the biggest highlights that I think I could start tomorrow with my own kids. If you enjoyed this podcast, I would love it if you left me five stars and a review on Apple or a review on Spotify. Subscribe to my YouTube channel or just said hello to me over on social media at burntpancakeswithkatie. And until next week's conversation, I want to remind you that everyone burns their first pancake, so just keep flipping.