Merging Into Life: How to Teach Kids About Money

[00:04:13] Jasmine Paul: Yeah, so I loved working. I wanted to work as soon as I was allowed to. Work was like, that was just like a way of freedom. Like that was independence.

[00:04:26] Sabrina Pierotti: In your business, you talk a lot about the pivotal moment that happened for you in college that really kind of catapulted you into the amazing career that you have today. So, I want to hear a little bit more about that. What exactly happened in college, and how did you get yourself out of it?

[00:04:40] Jasmine Paul: Yeah, so I went to school, ended up going to school on a 3½-year, tuition-only scholarship. So, I had to figure out a way to fund housing, didn’t have the funds to pay all these extra bills and ended up sleeping in my car and on friends’ couches for about 60 days. And I’ll never forget one of my really good friends in college, she was like, you’re sleeping on the floor of this empty bedroom of this house that we’re renting. Like, why don’t you just stay here? Just talk to the landlord. And I was like you’re right.

[00:05:13] Sabrina Pierotti: So it’s safe to say that that experience kind of propels you into what you do today, which is specifically talking about finances and financial independence targeted towards the youth, the young people where they don’t teach this in schools. Is it safe to say that that experience really shaped your career moving forward?

[00:05:34] Jasmine Paul: A 100 percent, yes. I, there are young people that are having conversations around money in their households, but there are such a larger population that are not. And I don’t want them to fall into the same mistakes that I’ve made that other adults have made. And so, when I was planning on opening a business, I originally thought young adults, young professionals, 25 to 45, but then I realized after serving different people and working with that age group that so many people kept saying, I wish I learned about money as a kid. It’s like people from all types of demographics, socioeconomic backgrounds, from different parts of the world. They’re like, I wish learned this as a kid. And so, I’m like, OK, let’s maybe start at the source. Let’s go to the root. And that’s where The Wealth Playground was created.

[00:06:25] Sabrina Pierotti: For all the parents that are listening to this, what does early enough actually look like when talking to your kids about finances?

[00:06:34] Jasmine Paul: Yeah, so research shows that kids can learn as early as the age of 5, and they have their financial habits set by 13. So, right now, there are about 30 states that have mandated personal finance in schools that high school students have to take a financial literacy course. It’s not all 50 states in the United States and then across the world there are just different financial, personal financial standards.

[00:07:01] Sabrina Pierotti: As the child gets older up until that 13, which is a shocking age that you said that the financial habits are actually set. How do those financial conversations transition? I imagine like parents aren’t talking to their kids about Roth IRAs at age 8. What does that conversation look like as they get older?

[00:07:17] Jasmine Paul: So, it depends on the child, of course, depends on family, and then also depends on the parents’ financial knowledge themselves. I would say for your 3- to 5-year-olds, that’s going to be the coin identification, understanding what bills are, what type of currency, what that is, and it evolves into the saving, investing, generosity. What does that look like in your family? You can, of course, have the physical savings jar so they can see the different buckets of saving, spending, investing, giving and showing that the importance of whenever you do have income, whether that’s through birthday money, allowance, holiday money, whatever it is, that you don’t just spend it all in one place.

[00:08:05] Sabrina Pierotti: Absolutely. Now you work with a lot of Gen Alpha and Gen Z. And they grew up in an era where you can just tap your phone and have money just come out of a magical credit card in your phone. They don’t have the physical cash. How has that changed the mindset around money for these younger generations?

[00:08:24] Jasmine Paul: It’s definitely different. I think that it’s been a bit of a challenge for some young people, because there is this idea that it is kind of infinite. There are so many gimmicks that are around or traps that are around that can really impact a young person’s financial future, whether it’s the buy-now, pay-later applications, whether it is taking out a loan through a financial technology application. It’s really critical that young people have financial education, but also financial understanding and being able to comprehend what they’re being sold.

[00:09:05] Sabrina Pierotti: Now, for parents, before we get into the nitty gritty and all the details of what it actually looks like in practice to teach young kids about money, for parents who just didn’t grow up with a very strong financial role model, or who came from households where money was like really tight all the time, how do they start to break that own cycle for themselves in the benefit for their own kids?

[00:09:27] Jasmine Paul: I always say that, if we have breath in our bodies, and we are here on earth, then we have an opportunity to transform. Now, it might take some time. It might take some external people to come in, whether that’s a behavioral financial therapist, whether that a financial advisor, certified financial planner. But if you don’t have that information, like as I shared in the beginning, asking for help is very, very important. There are several nonprofits that will help with financial education, as well as if you are registered to a credit union, you have an account at a credit union or even a financial institution, there is free financial education available.

[00:10:13] Sabrina Pierotti: Now, I want to dive into the changes that we really would love to see for this new generation coming up and how they handle money. And so, I want to talk about an allowance because, usually, as kids, that’s the first entry into money, honestly, is getting an allowance from your parents. What are your thoughts on allowances?

[00:10:31] Jasmine Paul: I again go back to what works for families. Some families share that chores are chores, and there’s no need for an allowance, because this is their child’s responsibility. And I definitely understand that. I do think that having a young person understand the importance of earning some type of income, and maybe it’s not through the standard chore that you have within the household. Maybe it’s for an extra duty, maybe it is for a homework assignment or grades, whatever it is, I do think that that young person being able to receive a reward after working at something, I think it’s a great tool to utilize. I’ve seen now allowances very different from when I was growing up. I’ve seen that parents have a very significant amount of money that they’re giving in allowance, but as you are giving the money, the earned income, I would say that is a really great way to establish the saving, the spending, the investing, share what are the goals? What do you want to save up for? What is a lot of money to you? What are you going to do with this extra money? Where are you going to put the money? Is it going to stay in the jars or the buckets? Is it going to go to a financial institution? Are you going to go and buy something? But just really having that dialog on what is the next step once the allowance has been given, I think is important.

[00:12:00] Sabrina Pierotti: Now on the other side of allowance, what’s your thought process on children working for their money and does that have additional benefits, pros and cons to a child who just gets an allowance from their parents?

[00:12:13] Jasmine Paul: I do think there is power in a young person understanding the responsibility of showing up to a place that is not their home, having the responsibility of clocking in and clocking out. If there is some type of customer-service-facing role that they’re having to interface with people. I think these are just life skills that a young person can utilize for the rest of their lives. There is so much value in a young person having to show up to work on time, if they have a uniform that they wear, showing up in the right uniform, being able to have people who are in positions of authority that are outside of the parents, outside of a teacher, outside a coach who they have to answer to, who they might have to resolve conflict with. These are all going to benefit that young person in the long run. And so, I do think that a young person should have an opportunity, whether it’s through earned income, through employment, or through volunteer work, but having them have some type of outside interaction outside of the home, where they can interact with other people that maybe they don’t agree with, maybe they have different value sets, they do, these are all things that are going to shape them for their future and also for their financial future as well. Being able to be exposed to people who maybe did have a better financial education than them, or maybe they did make better financial decisions, and they can have those opportunities to talk with them. I do think that is very crucial for a young person’s development.

[00:13:48] Sabrina Pierotti: You just added a whole other layer that I didn’t even consider. It’s just like really learning how to work with different personality types, report to somebody besides your mom and your dad. Like those are benefits outside of money benefits that if you ask your child to get a job when they’re teenagers, that can benefit them for the rest of their lives in the most formable years of their life.

[00:14:11] Jasmine Paul: Absolutely. And those are going to impact your financial decisions, right? Like, how you work well with others is going to impact your income. How well you can resolve conflict is also going to affect your promotion status or how well you can work with others. Like those are all things that are going to impact your money. So much of financial education is the behavior, your behavior around money, your thought process. It’s so much more than just opening a bank account, opening a brokerage, investing every month. How you behave around money and how you behave around tools that make money are also going to impact those financial decisions.

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[00:15:17] Sabrina Pierotti: These are just innocent conversations that mom and dad are having that the child might be innocently picking up on that is impacting their future money with their potential partner in the future. What are some of those dynamics that parents really, like the big ones that parents need to be aware of?

[00:15:41] Jasmine Paul: Absolutely, so typically, in relationships, there’s always a saver and always a spender. Sometimes, you get two savers, sometimes you get two spenders, but usually there’s one saver, and then one spender. And so, I think the most important thing whenever I’ve worked with couples and families in the past is recognizing that it’s a team. Now, regardless of what the roles are within that team, that you are a team, so a team makes the decisions on money. There might be someone who is maybe better at financial planning or better at executing the budget. That is totally fine, but as the young person is growing up, they should be seeing healthy money conversations within the household. I always share when there is kind of like a more dominant role of the personal finances and maybe the other person is like kind of clueless about what’s going on. I always share like, well, I see marriage as a family. Kind of like a company and you wouldn’t have like the CFO or even a CEO kind of making all decisions like they have a team of supporters that help them shape the decisions that they make and as you are making decisions with your family just recognizing that It’s more than one person, you need two heads, you need multiple people to kind of make the decision. Now, maybe there’s one person that ultimately makes the decision, and that’s fine, but there’s value in collaboration and there’s value in people just understanding what’s going on. And I think when you incorporate a young person in that decision-making, it’s something that they will always remember.

[00:17:31] Sabrina Pierotti: Now, you’ve talked a lot in your work about the importance of letting kids fail in a safe environment at home. What does that actually look like in practice? And how do you set that up so that the lesson lands without it being discouraging?

[00:17:44] Jasmine Paul: Yeah, well, I think it depends on what failure looks like in the household, right? Not everything is going to go our way. Life happens, and sometimes, we can have all of the preparation in the world, and it just doesn’t go our way. I think that it’s critical for young people to understand that decisions that they make mistakes will happen and that’s OK. Making a decision like they wanted to buy maybe some type of toy, and then the toy ends up breaking three weeks later. That was a decision, and they couldn’t help that the toy wasn’t crafted in a way that was going to sustain a long time. And so they made a decision, and now they no longer have that money in their bucket and that’s OK. I think that young people should have just the ability to fail without the shame that maybe they might get outside of the home, right?

[00:18:51] Sabrina Pierotti: I’m sure there’s people listening, they’re are like, oh this is such great info, but my kids are just in that rebel area, where like everything that comes out of my mouth they defend, they don’t believe, whatever the case may be. And you talk so much, Jasmine, about the importance of building a village around your kids when it comes to financial education. So, for parents whose kids just won’t listen to them. They’re in that phase. What does having another supportive village surrounding those kids look like, so that hopefully, this great information can stick?

[00:19:22] Jasmine Paul: Absolutely. I was that rebel child, so nothing my parents could say was right. And I will say, for young people, having mentors, having coaches, having teachers that really care about them are really important. If there’s an adult that has been a positive role model and a positive influence on that child’s life, I would say continue to foster that connection, and that relationship. And they’re like if they’re, hey I’ve been trying to get them to save more, I’ve been trying to get them to maybe open up an account, and we can invest the money, but they don’t want to. Maybe that that person can have that conversation with them. But that having that village is crucial. I think that every young person should have an opportunity to have a village. It could be an auntie, an uncle, it’s just somebody, somebody else that is going to be a positive role model that can really, that cares about that child, that cares about their development and cares about the decisions that they make in the future. And so, there’s always the Big Brothers Big Sisters program. There are other mentorship programs. I know for me, I’ve been a part of investing girls.

[00:20:37] Sabrina Pierotti: All right, now we are headed into our mailbag segment. And this is an exciting segment where listeners of the podcast and AAA members have a chance to ask their questions. So, their question is: My kids are in middle school, and I thought it would be a good idea to introduce an allowance for the chores they do, like keeping bedrooms clean, washing and putting away their own laundry and helping to set the table at dinner. But as I thought about it, I’m not sure what the best approach is. What should they use the money for? And how much money is appropriate? Would love some advice here. So, this really peeked into what we talked about earlier, especially like how much is like an accurate allowance?

[00:21:18] Jasmine Paul: Right, yeah. So, thank you for that question. I think that’s a really solid question. So, there’s several ways you can implement the allowance. So, there are apps like BusyKid, there are the Greenlight apps as well, where you can track different chores. And then also just a regular old just poster board that you can put out in the home and lay out like what those responsibilities are. I think when it comes to the amount, it depends on what your salary is and what you feel comfortable lending your child or giving your child. I’ve seen allowances range from $5 all the way to like $150. I think the $150 might be a little bit extreme, but again, depends on what works with your budget. And then, also being realistic of what makes sense. Washing the dishes, is that worth $20? Or is it washing the dishes, keeping the room clean, doing all these other tasks? And that is kind of like what you get for the allowance. I do think that being able to roll everything together and establishing the responsibilities that way is a little bit more helpful than, OK, they did the dishes, but they didn’t keep the room clean. I think, if the goal is that we want to establish some type of order and structure, there’s also an element of discipline in the allowance as well, and that, hey, everything kind of has to be given if you want to get full reward of this allowance is important. But again, setting what that number is is definitely going to be based on your budget. But I would say anywhere between $5 to about $35. But I have heard the market rate has changed. So, also utilize other parents to ask as well as what works for your budget.

[00:23:14] Sabrina Pierotti: Thank you for sharing your knowledge, your wisdom. I know that this is going to resonate with a lot of people.

[00:23:18] Jasmine Paul: Yes, thank you so much for the opportunity to share. And I just want listeners to understand the importance that personal finances, personal, what works for one family might not work for you and that is OK. And also note that you can change the narrative. You literally can change the narrative of your household.

[00:23:39] Sabrina Pierotti: Where can people find you if they want to get in touch?

[00:23:41] Jasmine Paul: Yeah, so they can head over to thewealthplayground.com. We have a newsletter that we share every two weeks that has financial-friendly activities for families as well as for young people. We also have a summer reading challenge, where they can get all personal finance books, a list of all personal financial books for young between kindergarten through eighth grade.

[00:24:06] Sabrina Pierotti: That’s awesome. So cool. Thank you so much, Jasmine.

[00:24:10] Jasmine Paul: Thank you so much. I appreciate it, Sabrina.

[00:24:14] Sabrina Pierotti: What I love about this conversation is that it reminds us that teaching kids about money isn’t just a single conversation. It’s made up of the opportunities you come across every day. Whether you start with the spend, save, give jars, an honest conversation about wants versus needs, or simply being mindful of the words you use around money, every step counts. And if you didn’t grow up with a strong financial role model yourself, that’s OK. This is not about being perfect. It’s about being willing to learn alongside your kids, build that village around them, and slowly change the narrative your family carries forward. A big thank you to Jasmine Paul for being so open about her journey and for the practical tools she’s bringing to families everywhere. We’ll link to her work in the show notes so you can explore more there. Until next time, thanks for tuning in to Merging Into Life.

The views and opinions expressed in this podcast do not constitute financial advice and are not necessarily the views of AAA Northeast, AAA, and/or its affiliates.