#047: Helping Kids Learn to Manage Their Money

We may forget we’re not born inherently knowing how to earn, spend, save, or give money. And may not even know how to even go about beginning to have these conversations with our kids.

Many parents expect their kids will learn how to properly manage their money at school. But the reality is most kids are not learning how to spend, save, invest, or donate their money at all let alone in a healthy way.

This is concerning given that a report by researchers at the University of Cambridge commissioned by the United Kingdom’s Money Advice Service revealed that kids’ money habits are formed by age 7. Age 7!

Additionally, a 2017 Parents, Kids, & Money Survey conducted by T. Rowe Price found that parents who discussed financial topics with their kids were more likely (61% vs 41%) to have kids who say they are smart about money.

Joining us on the show is Bill Dwight, CEO and founder of FamZoo, a private family banking system designed to help parents teach kids to earn, save, spend, and donate money wisely in a safe, friendly environment.

Bill joins us to share how parents can use a variety of tools to not only educate their children when it comes to money habits, he shares how parents can use technology to not only expose your children to real-life experience with money but to spark those crucial money conversations. 

About FamZoo
FamZoo isn’t just a convenient prepaid card for families. It’s a hands-on financial education for kids of all ages — preschool through college. Learn more here.

About The Show
To learn more about DebtWave Credit Counseling, visit our website or connect with us on Facebook, Twitter, Instagram, and LinkedIn.

To learn more about the San Diego Financial Literacy Center, visit our website or connect with us on Facebook and Twitter.

Transcript

Intro: 0:00

Welcome to Talk Wealth To Me, a safe space podcast, where we chat about anything and everything related to personal finance.

Felipe Arevalo: 0:19

The information contained in this podcast is for educational and entertainment purposes only. It does not constitute as accounting, legal tax or other professional advice.

Chase Peckham: 0:32

Hello and welcome to another edition of Talk Wealth To me. Today's guest is a engineer from the Silicon Valley and a father of five. And during his journey of parenthood, he learned that teaching personal finance to his children was not the easiest thing in the world. And I think most of us parents find that. So he did something about it and he created a product over many years called FamZoo. And it's basically, it's preparing kids for a financial jungle, which we all know surely is. So stay with us. This is a great episode. There you go. We'll give us a little bit of an idea of how this idea started and what made it come to fruition.

Bill Dwight: 1:19

Yeah, so it started for me. So my wife and I have raised five children and when the oldest two were in middle school, we started to realize, um, you know, Hey, they're not learning anything about personal finance. And so we were kind of casting about for some tools to help them, uh, you know, learn that money is a finite resource. Not, not tends to be, not terribly well understood in Palo Alto and, and, uh, other wealthy communities Sometimes that that money is, um, something that's finite and you need to learn how to manage and be responsible with. Uh, and so at the time there weren't really any products that were helpful in that endeavor in the sense that they weren't designed for kids. They weren't really designed with education in mind, they're really adult products. And so I started out by just running a bank in a spreadsheet. So getting them used to the idea that this is an account, this is how much you have to spend, and you can't spend more than what's in your account. And here's how you check your balance and basic things like that. So it really just started out as a spreadsheet that was the bank of dad. And, um, over time I've been in software, uh, since 1982, 84, roughly. Uh, and so I had the ability to kind of create a little website, cause I got a little tired of, you know, kids rushing into my office and say, dad, how much is in my account? Right? I mean, I love the kids dearly and all, but you know, really, uh, so, uh, I made a little website where they could sign in and see their balance. And then we started to add things to it, like, okay, what about compound interest? You know, let's encourage the kids to save now. Uh, this is bank of dad compound interest. Like, no, you can't bank at my bank. We pay some pretty outstanding compound interest and we deliver it every week because kids operate on a faster clock. And a penny at the end of the year is not going to be terribly motivating for anyone, let alone a kid not motivating. But if a kid sees that, Hey, you know, at the end of the week I earned 20 cents and then next week 22 cents and 25, you know, repetition is wonderful and operating on a faster timescale is wonderful as well. So I paid them an outrageous interest rate just to kind of send the message that, um, that a lot of people don't understand at all is that money can actually work for you if you keep your paws off of it. And, um, so basically the general idea behind what we were doing was create a bank where the parents are the bankers and they control the terms and they can kind of build whatever system or set of incentives and constraints that they think are important to match their particular family's values and the types of habits that are they're trying to encourage. And, um, you know, so it's a safe place to make lots of mistakes and make them at a time when those mistakes don't have huge, um, negative implications there, it's really all about learning and that's just a whole different ball game then. Um, uh, and I'm not trying to be pejorative, but different ball game from an adult product where it's like, okay, you're really going to get severely penalized if you make mistakes. And the point here is to experience those mistakes and learn from them.

Katie Utterback: 4:47

I want to ask you, you mentioned that it was important to you to make sure that that compound interest, that your kids were earning was substantial enough that they're recognizing it. Um, as an adult, you know, sometimes you look at your savings account and you're right, when it's only like a few pennies, it's like not very motivational to keep going at that savings rate. Right. You thought you were making a difference, right? How, what was your inspiration for doing that? And making sure that if the bank wasn't going to give your kids the interest rate that was going to spark that joy of saving, what was your inspiration like I'm going to do this, I'm going to become their banker and this is what we're going to do to get them to like saving?

Bill Dwight: 5:31

you know, that's a really good question. I don't think anyone's ever asked me that question after 13 years of this. Um, I'm not sure, you know, there is a book called the first national bank of dad, which by the way, is great for moms too, but a poorly named book in this day and age, um, where I didn't read it until after I had built the system, but, um, it's a fabulous book and I highly recommend it because the author is David Owen and my bookshelf. And, um, and, and so the, and he lays out sort of this notion of running your own little family bank. And at the time he ran it in Quicken, um, this is back in the day before the internet and so forth. Uh, and there was a personal finance software called Quicken. Now people think of mint, maybe it owns it now.

Chase Peckham: 6:22

Yeah. And so, um, who are, uh, partners of ours by the way. So shout out to, Intuit..

Bill Dwight: 6:27

There we go, shout out. Um, and so I suspect it was just me casting about, for ways to, um, think about how to motivate my kids, to save, knowing that whatever dad says is ridiculous and not listened to. So maybe, um, there's a phrase BS, walks and money talks. Um, so, uh, so I think, um, I was just thinking about, as I was doing this, like, you know, how can we operate in timeframes and amounts that are meaningful to kids? And so we've done that with a number of things we do. Uh, we do loans as well. So each of my kids got loans for their laptops and to pay back the loans, their wages were garnished. So their allowances were split between spending, saving, giving, and paying off that loan. Because you know, a lot of, a lot of parents say, gosh, don't give your kids loans. Right. And understand why they say that because they don't want the kid to feel like they can just purchase more than they can. But I actually wanted my kids to experience a loan so that they knew that, um, the money's not free, that it takes away from the money you could have spent on other stuff. And in some cases it has pretty hefty interest rates. Now I happened to be, I'm such a baby that I gave them zero interest loans, but that's just me. I, I'm sure more parents out there have, uh, more backbone than I had, but you can choose whether to charge them an interest rate or not. For me, I just wanted them to see like, Oh, okay, like 20% of my allowance suddenly disappeared. Now it's paying back for this thing that I got in the present, but I'm paying for in the future. So I wanted them to experience that as kids in a very simple way so that they weren't surprised by that concept when they got out in the real world.

Katie Utterback: 8:17

Well, you mentioned the multiple categories too. One of which is giving, how important was it for you when your kids are paying back the loan, for example, on the laptop, how important was it that they didn't just take all of that allowance and Oh, that goes toward the debt and they're not adding anything to savings.

Bill Dwight: 8:36

Yeah. Yeah. So they didn't get to choose. Now I see that with a, you know, I'm kind of kidding around. I think what's really interesting actually is to let your kids be involved and engaged in the decision about what percentages go to which bucket now in the, of a loan, the deal was upfront. If you get a loan it's coming out of your spending bucket. Um, so that was kind of the deal up front. However, let's go back to the, you know, when you're just setting up the buckets and a lot of parents will say, well, we know what should be the split, should it be 80 10, 10, you know, 50, 40 whatever. And, um, I kind of feel, that's a really great time to ask your kid, say, you know, kind of pose the question, okay, we're going to split between these buckets. And none of them can be zero. What do you think the amount should be? And I think that, um, kids and especially teens, they crave ownership and agency. And so, you know, as a general rule of thumb giving your, your kids, some agency over the decisions, I think is a really powerful and positive thing. It really makes them own it. I mean, it reminds me of when, uh, my, my daughter, uh, you know, she, she wanted to, uh, get a, a Neiman Marcus chiffon gown for her junior prom. And, um, she had a clothing budget that was an annual clothing budget, and this thing was gonna gas that whole thing. And so I could have said, no, but I said, you know, it's your call. Like if you buy that, you have nothing left. Right. And so I gave her my expert fatherly advice, which was summarily dismissed and she bought the gown. But the neat thing was I wasn't the bad guy. Like, um, she just had to deal with the fact that she had torched her clothing budget for the remainder of the year. And it wasn't a confrontational thing because she made the choice and then she dealt with the consequences and it's hard to scream at a set of numbers. Right. It's easy to scream at dad. Right. And so that was a really valuable kind of lesson to have before going to college. And then when she got to college, she was like, Dad none of these kids know what a budget is, you know, they were, she was like shocked. Um, and that's kind of a sad commentary. I mean, I think we should, you know, as long as the, kid's not, you know, purchasing beer and cigarettes, I think we should largely let them make mistakes with their budget. And in fact, I think allowance is a very charged term. Like my recommendation is called a budget. It could be a budget for anything. It could be a budget for your wants and entertainment, you know, but it's a budget and it's a constraint. And I think the key thing, you know, that I would encourage people to have a very visceral negative reaction to allowance, just relabel it, call it the budget. In fact, um, name it, a budget in whatever system you use. Like, by the way, you don't have to use our product. You could use a spreadsheet. We have a free spreadsheet on my blog that you can use, but call the entries like budget allocation, you know, to really drive home the point that not a freebie, um, is something it's a constraint you're living with it.

Chase Peckham: 11:57

How old were your kids when you decided that you were going to look into putting something like this together, right. Or did you just get so far that eventually you're like, dude, I I'm there. I'm just going to go that much further. How old were they when you were like, we need a better way of keeping track of this?

Bill Dwight: 12:13

Well, the oldest kids were in middle school. Okay. The youngest kid was just a thought, not even a thought yet. So our youngest just graduated from high school. And, um, so this was quite some time ago. And, um, the interesting thing is that the youngest grew up his entire life on the system. And so that was nice. And, uh, like I said, the older kids were in middle school, which, and, and this, and, and initially we did not have prepaid cards with the product. So I think the, the, the product really became infinitely better when we introduced prepaid cards, which was over six years ago, maybe seven. Cause I know we're on the second renewal cycle for some of our first families and it's a three year renewal, um, on the card cards are issued for three years. And so, um, uh, th the, the neat thing about the cards is that even more agency for the kid, right. Cause they go out and they make the purchase with the original product. It was just sort of like a ledgering system where the parent would make the purchase on the child's behalf and then go back and debit the account, you know, uh, subtract from the account. And so with the card, it's all neat because, um, a, the kids are really, uh, feel grown up. They've got a card with their name on it, and, um, it's got a purpose and so forth and they can spend, and, and, um, obviously online spending is big thing these days, uh, and they can use it in store, so forth. Uh, and so that's just a real sense of ownership. And then for the parent, it's, you know, there's a reason the company's called fam zoo is short for my family as a zoo. So they don't have a lot of time to be like manually entering things into a ledger. Right. So the neat thing about the card is it automates all of that. And furthermore, uh, a really neat capability is getting text messages that go both to the parents and the child when the card is used, because that prompts a lot of great discussions. Um, not the least of which is, Hey, I don't recognize this transaction. There is fraud out there, and it's a sad reality, and it's only escalating. And so educating the kids about keeping their eye on transactions, uh, is, is a great personal finance habit and something very important to learn early and then how to take care of card numbers, pins, but there can be fraud, uh, you know, through no fault of theirs. And then there's, and then there's the fact that, um, bad actors out there, uh, online companies, trick people into signing up for things really. I mean, frankly, and those alerts help suss that out and have that conversation. So, so some people say, gosh, you know, why would I want to automate, uh, all the finances for the kids? I want to have conversations well with them. Well, the interesting thing is sometimes you end up having more conversations cause you've introduced automation and you're kind of having these sort of real time discussions. And you're forcing these conversations earlier than you, uh, might've had, or might've even not even been aware of that was going on. So

Felipe Arevalo: 15:13

it's funny that you mentioned fraud. My six year old has now to the point where he messes with the iPad and he's on there and he accidentally rented a movie on Amazon prime and it was like$3, whatever the rental for you. And I saw it come through and I asked my wife did you rent this. I didn't recognize it. So then I went to him and he's like, Oh, I'm sorry. You found out how'd you find out so fast. I was like, you have to keep an eye on things. And I noticed, and he's like, I'm so sorry I did it on accident. And, but he was just amazed that I one found out, I dunno how he thought he was there with it.

Bill Dwight: 15:53

I think that's a really good point, which is we have to remind parents to, to be, to have grace in these situations, right? Like kids, you know, there, this is all new for them. Right. And, and, and it's very easy for them to get tricked into signing up for stuff. I mean, signing up for Amazon prime happens all the time and, um, and it's just like, it's okay. You know, you kind of want to create this world where the child feels comfortable saying, yeah, dad or mom, I, I did sign up for that. I feel badly. Um, and you're like, that's okay. Here's, here's what we do about it. And, and here's how we make sure we avoid that problem in the future rather than, um, uh, and, and so, um, you know, I have a whole blog post on the unauthorized purchase scenario. Right. And, um, you know, usually when, when you kind of, um, cause most kids like my kids would, would not come forward as quickly as yours did. Um, so one thing that, one thing that you want to do is kind of say, Oh, by the way, I'm going to be contacting the company. And they'll be able to tell me exactly like who made the purchase and so forth. And, um, suddenly memories are jogged immediately when you, uh, when you put on the dad or mom, detective hat. And, uh, and then just be, you know, sort of graceful about it, especially if it's a first time offense as it were. And, um, anyway, I think those are really valuable conversations to have. And ideally, you know, so some people say, gosh, isn't that helicopter parenting. If you're turning on alerts and things like that and spying on your kid, well, first of all, tell your kid that alerts are on. You don't want to, you know, so that'll hand off a lot of the baskets to begin with. So it's like, Hey, every time you can use this card, here's your card. They're like, awesome. Every time you use it, we're both going to get a text message, wink, wink. Um, and then, um, you know, that way you kinda know, and in real time, and you can't get into too difficulty. But my point was that I don't think that's helicopter parenting. I think that that's modeling for kids. Hey, we're transparent about finances in our family and you should feel comfortable talking to me about problems or issues as they arise. And my hope is if they get that comfort level with their parents and their family, they will have that comfort level with their spouses or partners, um, as, as young adults. And I think that's personally, I think that's healthy, obviously alerts are optional, you can decide, but that's kind of how I view it.

Chase Peckham: 18:22

That's really interesting. You say that. I would say that that's just parenting a helicopter parenting is making decisions for your children or rescuing them from making bad decisions. Right. When you're in reality, you're giving them the opportunity to be more adult than anything, just like we go to a bank and we're going to get, we're going to get an email that we spent. My wife for instance, is going to get an email that I went and spent money somewhere. So I guess f elt l ike.

Bill Dwight: 18:49

Chase, I think your wife should keep a very sharp eye on you. But, um, you know, one, one thing that I have certainly learned, uh, and, and one thing that I think is really a hallmark of our system is we have lots of knobs and dials because families are very different and they have different, um, contexts. And to some, what I think is, uh, just good parenting to others is, uh, something that, you know, strikes a different chord because of their experience. And so what I think is really important, uh, if you're a provider in this area is to allow families to kind of tune the system so that it can match their, their values. And, um, you know, another, another area, you know, cause it's funny because when I first started this company, you know, some people would tell me, Oh, so you built a product for rich kids, right? Cause they suddenly made this assumption of allowance, automated allowance. And you know, I was kind of worried that that's maybe, maybe that's what it was going to be, but, but the reality is that personal finance is applicable to every socioeconomic level and everyone in the country. And uh, as long as we make it flexible enough where people can, uh, a get money onto the cards, if they don't have bank accounts. So make it very accessible. There's some products that require you to have a bank account, to load a, that's not the case. You can load our cards with cash. For example, if you don't have a bank account and for some people, they run their family on fancy cards. Now, um, we do have very relatively low limits. Like ultimately you want to get to a checking account that doesn't have a limit, like our cards have a$5,000 maximum balance and they have a maximum of 2,500 transfer per day. Um, which is more than adequate for most kids, of course, but some families run their entire, um, you know, uh, budgeting system. They basically have an electronic envelope system with the different cards. So then I have a clothing card and a, uh, food and groceries card and so forth. And, um, and that's fine as long as they can abide by those limits. But the neat thing is there's, you can load from direct deposit. You can load from cash, you can load from your digital wallet, uh, and, and your, and your bank account. And, um, it's, it's really been a, um, a satisfying project for me because I handle most of the customer support and we're, we're well over 10,000 families house. So it's a little busy. Um, but the neat thing is during my day, I talked to people from everywhere and, um, I tell you, the Palo Alto bubble gets pretty, uh, annoying. So it's really nice to be able to spend my days outside of the Palo Alto bubble and, and be able to really, um, engage with, with families all across the U S and in every kind of different situations.

Chase Peckham: 21:46

So at what age, when you went from this system, what age did your children go get their own bank accounts and set up their own?

Bill Dwight: 21:54

Uh, the older ones were, uh, uh, using my system when, before we had cards. So I got them checking accounts and credit cards actually, when they went to college, when they went off to college, the next three all use the cards all the way through college, and they got a checking accounts and their own credit cards when they got their first, uh, steady job or in one case, uh, we have one in, uh, in the S in the service. So, um, you know, it's a government job, uh, but what we did, the cards I found were really nice in college because we have these, um, features I had to, uh, sorry, I got distracted for a moment. A customer was calling, so I put them on hold. Um, so, um, you know, we have these features for request making money requests, where the child can make a money request. And, uh, the parent gets a text message and they can either approve, uh, partially approve or deny, which is a common outcome. Um, and they can make reimbursement requests. So we put all these little workflows in the feature, in the product that, that really speak to how families interact over money. And that's, that's, that's something I think we'll see come to more, uh, uh, typical products and adult products to kind of acknowledge that, you know, in most families, there's a lot of money kind of moving around, right.

Bill Dwight: 23:27

Even with adult, with adult kids. And I think products are going to evolve to kind of embrace that. So in any event, we, we added a set of features that were really nice for, you know, dealing with college expenses, you know, so I get, you know, I would give the kids a little stipend, uh, in college and I could automate that, um, you know, for additional spending cause, um, you know, eating dorm food gets old pretty quick or that kind of stuff.

Chase Peckham: 23:50

Yeah. But in that, so in that case, you could then let's say, if you wanted to, and you wanted to really teach them basically adult finances, you could give them if they were going to, let's say, pay for their own, uh, their tuition, you could put the money in their bank and they could physically go either physically or electronically pay their own tuition if you wanted to get them a responsibility of timing.

Bill Dwight: 24:14

That is correct. Yeah. And chase that, that's a, um, another points out, another favorite, um, uh, trick I have or whatever, which is, I like to have the kids, even if I'm going to be paying for some things, I like to have them pay for it and then request a reimbursement. And, um, the reason it's need is on two levels. One is sort of awareness of what stuff costs, right. Because they're physically paying for it either online or in person. And they're just sort of seeing those prices. Oh, wow. That Axe deodorant that is expensive. Yeah. Well, yeah. Well that's a whole other ball game. Um, and, and so just that everyday items cost money, the other is it's a reimbursement, so they have to have funds in their account. So they're basically thinking, Oh, I need to maintain like a minimum balance. Basically, even though we don't have any minimum balance requirements, they're just there, they're being forced to not live at zero all the time. Uh, and, and so that's an important muscle to develop as well. Um, by the way, all of the cards have their own routing and account numbers. So, uh, as the kids got summer jobs, when they were teenagers and so forth, they could have those paychecks directly deposited to the card. And that's a neat thing as well. You just took away my last, my next question. So now, now what, okay. Let's talk about what the cards don't get you. Um, you know, so prepaid cards are a wonderful instrument. Uh, as long as you check out all the fees and everything, like our cards don't have any fees for declines. So, uh, the, the, the punishment for a decline is the embarrassment, that's it. Right. And, um, and so that's a new feature. Now you can't build a credit score, so you're not going to get any sort of credit worthiness or credit history out of our prepaid cards. And that's important to understand. So some parents ask, you know, Bill, what do you recommend in that case? And what I like is like a hybrid model where you put some fixed spending on a credit card, you know, maybe, uh, that that's predictable, maybe your Netflix bill or whatever, something that's simple to pay off and you pay that off, you know, regularly, you're never surprised. And then you put all your discretionary spending on a prepaid card, uh, and that way, you know, you have a natural constraint on spending. So I really liked that that sort of hybrid model, you just definitely want to be clear.

Chase Peckham: 26:35

You can't build a credit history with the debit card either. So I mean, that's, that's a common misconception that we run into in our presentations and our workshops all the time,

Felipe Arevalo: 26:46

all the time. It's like, why don't you put your Netflix on there? Cause you, you know, it's not going to be a huge expense payment.

Chase Peckham: 26:54

or your cell phone bill, something that you're going to pay every single month, one way or the other kill two birds with one stone.

Bill Dwight: 27:00

Absolutely. And, and, um, you know, I personally, I use credit cards and, and, um, you know, as long as you've got that muscle to pay them off, pay them off every, every month in full, um, there, there can be a wonderful tool. And so I think that it's neat to introduce your kids to that. And you can avoid all that risk by ha by really sequestering the, um, the discretionary spending onto, you know, an instrument where you can't go over and then taking some recurring, well known bill or bills and putting it on the credit side. Um, you know, that's a, that's a good balance, of course, you know, your mileage may vary with, with, uh, with, with the child and their experiences. So, you know, use your discretion, but that's a neat way to approach.

Chase Peckham: 27:47

Did you, by chance make your children authorized users on, uh, you're using your wife's maybe one or two credit cards?

Bill Dwight: 27:54

Uh, we, we did not do that. Um, I was a co-signer in their cards. Um, there are pros and cons to all those things and I don't profess to be an expert at it. Uh, I'm just saying what w w what I did in this case now for the, the three subsequent children, you know, they had paying jobs by the time they opened up their, you know, they had regular full time jobs. So at the time they signed up for their credit cards and stuff. So I did, did not need to be a co-signer

Chase Peckham: 28:21

and that's, and that's an interesting thing. I mean, and again, it's personal preference to parents. We get those questions all the time. How do I, my kids seem to be starting late and getting their credit, and, you know, how do you build that up? And you can do that is simply, you can start that process by getting them a little footprint by just making them that doesn't mean you have to give them the card. You're just putting their name as an authorized user. That doesn't mean they get to go spend freely. Um, but you can't do that even if you didn't have a job, but the idea of learning to have a credit card in your name, even if it's a student card at an early age, it gives you those, that ability to learn how this product is used. And it can be a huge financial tool by the time they graduate. And they're going into their first jobs that they are going to be far ahead of most kids.

Bill Dwight: 29:06

Yeah. And, and, you know, they, they find out as soon as they want to get that first apartment that, you know, what a credit check is all about. Right. So that's really, when they get that first wake up call, they're like, what? Right. Anyway, I can't just move in.

Chase Peckham: 29:19

Did you find some of your kids were much more apt to use it on a regular basis than, than others? I mean, did you see clear financial personalities early on?

Bill Dwight: 29:29

Oh yeah. Our kids, um, uh, I believe that my wife and I raised them all, but they all seem radically different. Um, we have an incredibly diverse set of five, and I don't think they'd be offended that I say that we definitely did not raise robots. Um, despite my interest in science and robotics,

Chase Peckham: 29:51

it's just interesting that you brought them up pretty much all the same way, giving them the same tools and yet their personalities still come out. Oh yeah. Cause.

Bill Dwight: 30:00

my kids all found different ways to reject what I told them. They were very clever. The kids, uh, my, my kids have taught me, uh, more than I've taught them. So I'm an infinitely more empathetic person And after being a father and now a grandfather. So, um, uh, I am really enjoying the grandfather's stage because, um, uh, there's no downside. It's all upside.

Katie Utterback: 30:31

I want to ask you about the, the personality side. Um, we talk on the show and in our blog too, about the different needs and wants that people have and their preferences for life. How do you talk about that with your kids? Especially as they start to notice, like, you know, like why does Jack live in an apartment and we live in a house or this, you know

Bill Dwight: 30:56

yeah. That comes up a lot in Palo Alto in particular. Why is Jack going to a birthday party on a private Island in a helicopter? And why do you, why do you have a Honda civic Dad? Well, my answer is because I don't care about cars. Um, and the point is, um, people value different things and, and who am I to tell them what is, uh, valuable and meaningful to them. But the key thing is that that I'm buying something because it has meaning to me, or brings joy to some, to me or my family, and that I'm concentrating, you know, my purchases on, on what makes sense for me, as opposed to what makes sense for Jack and his helicopter and his private Island. And, um, and, and so, you know, that's, that tends to be how I approach that. Uh, you know, I spent, you know, I'm comfortable spending a majority of my resources on some things, and then I don't spend diddly on others. Um, you might notice my clothing. I'm not exactly a closed hound, for example. So, um, you know, free t-shirts from software companies are pretty much what I spend my days in

Katie Utterback: 32:17

I think that's a lot of people in Palo Alto.

Bill Dwight: 32:20

you'd be surprised I don't happen to like cars. So I, you know, I, um, I don't, I don't spend much on the, to me, a car is very utilitarian, but one of my sons is totally into cars, you know, and, um, and that's great. And they may choose to that. They want to put their, uh, extra towards some really cool car technology, because they're just, that's something that really interests them. And I think that's okay, even though I could give a hoot, uh, and I'm sure some of the things I spend on there, like, Ugh, dad face, fall. Um, so you know, that, that's how I, I, I just want them to, um, be, be making purchases in a mindful way that makes sense for them and not being swayed by how others, uh, are, are, uh, deciding how to make purchases. And also to realize that you really know nothing about the economic situation. I mean, I'm saying it a little strong, but that person that's taken that helicopter, they might be in debt up to their eyeballs and you don't necessarily know, um, that, that makes sense for them. Right. And, um, and so that's another thing is like, Hey, you've got to attenuate things to your personal financial situation. And, um, remember we've got this emergency fund bucket, you know, buy emergency card that you need to, to, to fund first. Uh, that was one thing that I kind of introduced when the kids became teenagers is what, okay, one essential bucket here is your emergency card, and that's gonna come into play when you get that first a ticket for parking ticket. Um, you know, when you, uh, when you roll into that, none of these things actually happened. But when you roll into that, uh, that Jaguar that you didn't see behind you in the Starbucks parking lot, and the guy jumps out and goes crazy town because you dented this gold plated thing. Um, but yeah, it's to take it easy. It's like a 16 year old daughter, you know, and I say, daughter, I do only have one daughter, so I can't hide that one. Um, but, uh, you know, there's going to be like little emergencies that you didn't account for. So, so having that bucket set up and so forth, um, you know, those are the kinds of, uh, uh, things that we, we discussed when it comes to spending and how to allocate your funds.

Katie Utterback: 34:40

So you gradually add in more buckets, like the emergency savings as your kids progress through this program and learn more.

Bill Dwight: 34:47

Yeah. And this kind of happened gradually over time, as you know. So, um, so I think I'll probably be a much better grandfather than a father, um, now that I've learned, but, um, you know, these are things that I try to share with our community. So, so maybe they can put those in place for, um, you know, all their kids are up front or whatever. I think an emergency bucket is, uh, a brilliant thing to put in place from the get, go. Even little kids have emergencies. I mean, uh, you know, my, my boys all played hockey, so there were a couple of pucks that went through the garage door windows a couple of times, and that's a great time. So it's basically say, well, that's what your emergency funds is for. Um, you know, I don't think that's overly harsh or whatever. I think it really kind of makes a tangible, Oh, okay. I need this unanticipated, um, bucket for stuff that I responsibility.

Chase Peckham: 35:35

I mean, these are real world decisions you're going to have to make, right. Is it worth slapping that puck in the backyard next to the window, that post, right.

Bill Dwight: 35:45

I guess that's what my emergency funds for that. I mean, that's, I think the real benefit that you get out of not just using money, but learning that money constantly, like anything else in this world is making educated decisions. And, and whether those decisions work out for you, maybe, you know, not all the time, but you made the best educated decision you can make at the time you went for it and you learned from it one way or the other. And I think that's what you've taught your kids at an early age, is going to go far beyond their, their, their ability to use money. It's, it's, they're going to make much more educated and thought out decisions for everything they do. Yeah. I mean, and a lot of it's just exposing them to these ideas, so it feels natural. So for example, you know, my hope is always during that first HR meeting where they're like, okay, do you want to take part of your paycheck out to go into, um, you know, your, your 401k? They're like, well, of course I do. I've been splitting my, you know, allowance since I was five, like who doesn't do that? That's the, that's the reaction I want them to have. They're just like really like hoops, like someone doesn't do that. Um, you know, you can really set the table with these, with these simple, simple habits, um, and, and plant the seed that, Oh, okay. That's, you know, that's a natural thing to do. Um, and so that's, that's really the goal of any of these systems that parents set up. And again, I want to emphasize, you don't have to have some fancy pants product to do it. I mean, you could do this with paper and pencil. Um, just not as easy, more laborious

Katie Utterback: 37:18

I have to ask you too. How important was it for you to make a digital product? Cause it seems like a lot of people in personal finance will say, especially if you're trying to learn how to manage your finances, it's important to use cash so that you can see once that money's gone, it's gone. And you can kind of see where you have a lot of that money to go. Um, but like you said, we're living in an online world and kids are accidentally buying prime stuff on prime all the time. Right. So was that a conscious choice to help parents teach kids how to manage their money in a digital world?

Bill Dwight: 37:54

Yeah. Katie, I'm glad you bring that up because I think that, um, uh, I, I personally think we're headed to an increasingly digital world, a cashless society and, and um, I want my kids to, to feel comfortable with, uh, you know, a digital world and understand that it's not magic. And, um, so I have kind of two thoughts around that. One is I'm skating to where the puck's going to be. I want my kids to be skilled in handling, um, you know, digital forms of payment because that's the world they're going to be living in the other is that I fundamentally feel like kids are often smarter than parents. So parents think, ah, they can't, they won't get it. You know, they won't get this card thing. I'm like, what are you talking about? They're, they're the same kid. Who's like, reconfiguring your iPad. They're going to totally get it. You know, stop it. They get things really fast. What they need is explanation and experience. And you will find that they will get it in like three days. Is that too long to wait for you, mr. Parent, three days, come on. And furthermore, even if they don't have this digital product, they're going to see you using a card. And what I encourage you to do, even if you do go to the cat, cause there's nothing wrong with going to cash route. But, um, I think it kind of, it runs its course pretty darn quickly. Uh, and it makes it hard to implement things like interest and so forth, which really ended up getting clumsy with, with cash. Um, but, uh, you know, even so, and regardless of whether you're using cash or a debit card with your child, explain what happens when you run your credit card, you know, just talk through like, Hey, what do you think? You know, I just, I just ran the car. Do you think I just paid for that? Or when do I pay for that and all that and just they'll get they'll they understand if you take the time to explain and after, um, you know, several times and they start, when they start saying, dad, I don't want to hear how credit works again, then you're fine. But if they're still looking at you with a blank, look, keep telling the stupid story

Chase Peckham: 39:58

a hundred percent. So where's the best place. If people want to give this a shot, like fam zoo.com, is that the best place or find you on it?

Bill Dwight: 40:10

Yeah. Yeah. The nice thing is if you Google fam zoo, you're just going to find me because nobody has that ridiculous of a name.

Chase Peckham: 40:18

It was the easiest thing. I think I've ever looked up on a URL.

Bill Dwight: 40:22

Just remember my family is a zoo.

Chase Peckham: 40:25

I love it. I absolutely love it. Well, bill, thank you so much for being with us today. It was, it was a blast. I love talking children and finance. That's, that's what we do here. So

Bill Dwight: 40:35

thank you all for having me. I really appreciate it.

Chase Peckham: 40:38

If are, if these generation of kids can grow up fine economically and financially savvy, we're going to be a much better country and world, I believe.

Bill Dwight: 40:46

Yeah, I think so. If, if I, if I may mention one parting tip that has nothing to do with my product, um, I really encourage kids of teenagers to look into a Roth IRAs and to consider starting a, uh, what's um, Dan Cadillac, a personal finance writer from way, way back. Uh, when I read many, many years ago, calls a family 401k. And, um, basically what I did for each of my teens is as soon as they got a W2 paying job, uh, I liked to play it safe. Um, I, they opened up, I opened up Roth IRAs with them and, um, you know, I offered them a match, um, you know, up to their limit. And so I'm not a, a lawyer, I'm not an accountant. I encourage you to research it. And, uh, I think it's one of the smartest things you can do because, um, it's just a trifecta of things. Um, they have to work to qualify, works a good thing, nothing better than working for someone who doesn't give a darn about you. It's a good, it's a good education. Uh, and, uh, it's a tax advantage account and you get an excuse to talk about investing every year with your kid because, um, you know, you're going to do that. You hopefully you going to do this on a annual basis until they're off, fully on their own and you got to deploy the funds somewhere. And, um, and I encourage you to look at low cost index funds, uh, as the way to deploy that. So, um, it's really a trifecta of, you know, working, taking advantage of a tax advantage account thinking longterm, you know, basically that even though, Hey, you're, you're not going to be getting at this, um, until you're an old person like me, I don't tell them about the, the ability to withdraw funds for certain under certain circumstances and, you know, an opportunity to talk about, uh, you know, low cost, uh, uh, investing. And, uh, so that's, that's my, uh, parting tip. I think it's fantastic.

Chase Peckham: 42:52

Absolutely. And not only that, but the kids need to learn that that's, that vehicle is never going away. So they're starting at a very early age. They're going to really start something,

Bill Dwight: 43:01

I certainly hope not well and kids, um, you know, it's important because we're increasingly responsible for our own, um, wellbeing in retirement. And so if you get a start as a teenager, it's unbelievable, uh, you know, the boosts that you get, if you start early and you are doing your kids a huge service to introduce them to not only start them on their, their longterm investment journey, but, uh, just to introduce all these concepts to that question.

Chase Peckham: 43:33

Well, thank you very much for joining us today. We really thank you guys.