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Experts explain the best ways to improve your financial literacy

 May 30, 2023 at 2:16 PM PDT

S1: It's time for Kpbs Midday Edition. On today's show , what you and your Kids Need to Know About money. I'm Jade Hindman here with conversations that keep you informed , inspired and make you think. From investments to cutting your tax burden. We talked to a financial planner on what to do with money.

S2: The real tax planning is about shrinking the number on which you pay tax by putting money into accounts that you should be funding anyway , like your retirement or a health savings account , other things like that.

S1: Plus , how do you teach your child about money and at what age do you start ? That and more on Midday Edition. Let's face it , personal finances are tough from knowing what investments to make to simply making a budget with what you have now. It's not easy , sometimes not even fun to develop a better understanding of your own money. If you can get past the jargon. However , there are plenty of ways to increase your own financial literacy and make some solid plans for your own life. Joining me now with more is Paul Lim , a financial planner with the Wealth Consulting Group , as well as a member of the San Diego Financial Literacy Center's Advisory Board. Paul , welcome. Welcome to you.

S2: Thank you. Thank you for having me back.


S2: And I can completely understand why they feel a little overwhelmed with new laws being passed all the time by new Congresses. It can feel like it's harder than ever to learn the rules of the game , so to speak. But I think that everyone , no matter which generation they are part of , should have an understanding of some basic principles. Basics of income , taxation and time. Value of money , I think would be the two big ones that come out to mind.


S2: So , for example , popular culture would have you believe that the goal is to get a giant income tax refund at the end of the year so you can dance around in a tax software commercial. But really that's counterproductive because it represents money on which you could have earned a return or used to pay down debt. It's probably because there is too much money sent to the IRS per check. And that's not really any different than getting change for $100 bill. The real tax planning is about shrinking the number on which you pay tax by putting money into accounts that you should be funding anyway , like your retirement or health savings account , other things like that. When you're a business owner , these things get much more advanced as far as explaining time value of money. I say pretend like you have access to a time machine and this time machine can transport money from the future to today. And the APR is the cost of operating that time machine. If you send money to the future , the API that you receive on your savings is what the machine will pay you for sending that money forward into the future. Now , most people would be kind of reflexively averse to taking on any sort of debt , but if we realize that inflation is going to erode the value of the currency over time anyway , the net cost of that might not seem so bad. As long as you're going to do something productive with that money when you get it. And if the interest rate is less than inflation , you know , it must be crazy not to take it because you're going to be paying back the lender in future diluted dollars. But those lessons would be completely non-obvious to someone who doesn't understand those concepts.

S1: Another thing to consider is investment , and it is key to growing your personal wealth. But a lot of people really get lost when trying to understand how a Roth IRA works. How do you make that topic more approachable and easy to understand ? Sure.

S2: One of the easiest ways to simplify taxes for people is to use visual aids. And when it comes to explaining the differences between various types of accounts like traditional IRA or Roth IRA , assigning colors to them is a real easy way to get the basics differentiated between those types of accounts. So as an example , I'll tell you that there are things called red money , which would be like traditional IRA , traditional 401 K , and you imagine it's like a piggy bank. And when you add money to a red account , you receive a tax deduction as a result of funding it. In other words , you shrink the number on which you pay income tax. But when the money comes out in your retirement , you're going to pay income tax at that point in time. The Roth IRA is like the mirror image of that example , and I'll show it as green money. So it's like a green piggy bank. When you fund a Roth IRA , you do not receive a tax deduction for funding it. But in exchange , when that money comes out in the future , you pay no income tax. At the end , you can see there's pros and cons to each and they have different purposes , whether it's for tax planning or for tax free income later. But assigning a visual to every kind of financial account that's out there and being able to compare and contrast the differences gives people a very visually appealing model that they can use as a framework for understanding where all their different monies are.

S1: There's a lot to learn , it sounds like , and a lot of strategy that goes into creating wealth. How does someone have the time to do that , you think ? When they are when they've they've pushed their skill sets to the limit.

S2: In a situation like that , I will tell you that I would wonder about that person's lifestyle in the event that it takes them several jobs in order to make just their housing payment. You know , there's a way to kind of gauge whether or not the lifestyle you have is reasonable. And again , if we go back to our business owner mindset and framework , we realize that our lifestyle is what we need in order to maintain our happiness , to go back every single week to do the work that we do. And generally , if you're spending more than a third of your income on housing , it's no wonder that someone's struggling in a situation like that. The ratios are just not going to work in a situation like that. And so that person may have to just take on roommates or run into some other arrangement where they're not expending that much of their earning power on just that one expense category alone. There's just not a lot that can be done when those ratios are too out of sync. And in that instance , if someone really was struggling and working three different jobs to make that payment , I'd tell them that their house poor , your your housing is taking too much of your earnings.

S1: And I think also a lot of people have a hard time seeing ten years into their financial future.

S2: The very next step that you have where you just do your very best in order to really just take it , take each day , one one day at a time. And I would say to people that if you're going to adopt an attitude that you prioritize believing in things that are useful and not necessarily true. So , for example , proliferation of high speed Internet and smartphones , it's made it easier than ever to find data points to corroborate any assumption you might have or belief about the world. But it's not productive to reinforce a belief if doing so will result in bad behavior , bad results , things like that. So one of the things that I'll mention to people is that the two letter self-starter mantra we say , if it is to be , it is up to me. And if you want to get someone to really take action towards their goals , you kind of tell them No one's coming to save you. If you want to make something happen in your life , you have to do it with your own hard work and effort. And then when you receive results later on , you'll feel like you own them because you earned it. And it doesn't matter whether or not it's true or not. Even if there is someone who's coming to your rescue , just pretend like there's not. So that that way you'll still achieve your goal no matter what happens. So I tell people that I would think very hard about taking on beliefs and habits that are productive , non necessarily truthful because you can find anything to basically support any belief you'd have about the world these days and just believe in some topics that will help you to achieve things because they're helpful to you. Not necessarily because someone says they're true or false.

S1: You're listening to Kpbs Midday Edition , and we're talking about financial literacy with Paul Lim , a financial planner with the Wealth Consulting Group , as well as a member of the San Diego Financial Literacy Center Advisory Board. Okay. So , Paul , look , you hear it all the time. Younger generations talk about how tough it is now to build wealth versus how it was easier in the past.

S2: And yes , you can point to the post-World War two baby boomer type generation and note that the United States could absolutely afford to spoil that particular group of individuals with various monetary policies , but none of the individuals themselves were complicit in that act. It's an unintended consequence that came as a result of not having foresight for the future. And while there are plenty of ways to reinforce that belief , it's not useful to me right now , even if that is true , because it is simultaneously true that there are new opportunities and new ways to leverage skills that the baby boomer generation simply had no access to whatsoever. So it's not about life being fair. It's more about just doing that which is within your control , learning things at an accelerated pace , that you have the wealth of human knowledge within your pocket , in essence , and taking steps and making a deliberate decision. And to want to advance your life , no matter the circumstances. I don't know that I'd complain about whether or not the river is flowing in the correct direction. It's just about whether or not you're willing to swim. I think that it's just more about not dwelling too much on those aspects of the past , no matter how cogent or true they might be , and just dealing with that which is available to you at the moment.

S1: And you also encourage people to understand what their worth is as an employee.

S2: Incentives will change and people who are supervising you should begin to notice that kind of thing over time. If you act as though you are an owner and you have participation in the success or failure of the business , it will ultimately result in good things in the future. If you completely divorce yourself from the results of the business and the experience of the customers and things like that , your employer will also detach themselves from your personal success as well too. It's really also about viewing your inventory of skills and trying to pare as many of them as possible in a comprehensive package so that you have somewhat of a monopoly on your particular skill set and learning how to monetize that , learning to articulate your value and being able to express that verbally , to not be afraid to ask for things in exchange for more effort and more results to the business. It's absolutely a skill that is not taught at school. It's not very encouraged , but you kind of have to make a deal with your employer and let them know that you're more than willing to do additional duties beyond those of your stated responsibilities. And an intelligent boss will see that an employee who's at capacity and is willing to take on more roles and responsibilities should outgrow their current position to be moved up somewhere else. You know , ultimately , we're only rewarded to the extent that we serve others , and there's just no shortcut to that kind of a thing. But you have to be willing to show that you are able and and voluntarily taking on those additional responsibilities so that your boss will see that there is value in paying you more to do certain things. Absolutely.

S1: Absolutely. The art of negotiations is is absolutely important these days , though. I think a lot of people are running up against a an economy that many feel might be shrinking right now. And so employers might feel like their budgets just won't allow for more pay.

S2: And remember not to take things too personally because you are not paid what you are worth. You are paid what the job is worth. So if you are stuck in a role that is not giving you the kind of monetary compensation that you need , you need to kind of dig down and see what other skills you can bring to the company that are just not being utilized. Demonstrate that , document it , show that you are not being worked to your full potential , actually deliver the results. And then it would be in the business owners selfish interest in order to promote you and get more work and quality labor that you're willing to expend as a result of that. It's a great question and there's no real simple solution to it , but it's going to be something that you have to work on in addition to your regular job in order to strategize about how it is that you can demonstrate and then also deliver the value that you can provide.

S1: Paul You have a lot of great advice.

S2: I think that you should really try to find as many people who can explain things in short , cogent , visual ways , because analogies are a great way to explain new concepts. And if you find that there is somebody who can explain complicated things in a way that resonates with you and then inspires you to take action , that's going to be very valuable to you because it's just one thing to read you the Wikipedia definition of something. It's another to bring the material to life and to actually make the person feel compelled to take action. This is what separates excellent college professors from just ones that are there to do the job and the complete expansion of high speed Internet has made a lot of these influencers in the content that's available these days quite abundant.

S1: I've been speaking with Paul Lim , a financial planner based here in San Diego. Paul , thank you so much for chatting with us.

S2: Thank you , Jake.

S1: We'd love to hear your thoughts about financial planning and literacy. Give us a call. (619) 452-0228. You can leave a message or email us at midday at Coming up , we shift the conversation to the value of teaching kids how to make money , teaching.

S3: Them that and reinforcing that through realistic kind of experiences. That's where the rubber meets the road and it really helps them become more proficient at this.

S1: You're listening to Kpbs Midday Edition. Welcome back. You're listening to Kpbs Midday Edition. I'm Jade Hindman. In our last segment , we explored some of the best ways to increase your own financial literacy. And that can be hard enough for adults. But how many kids can you point to who know how interest rates work ? We hear often that children should be given a more comprehensive financial education earlier on to better prepare them for their future. Our next guest has made that his mission. Greg Merced is a certified financial planner and CEO of Busy Kid , which helps parents explain financial concepts to kids. Greg , welcome to Midday Edition.

S3: Hey , thank you for having me.

S4: I'm excited.

S1: All right. I'm excited to dig into this conversation. I don't know about you , but as I think back to my elementary school years , we learned about many things , but financial literacy was not one of them. And yet it's something we all need to be competent in.

S3: It should have been. And is it changing ? Yeah , I think it is a little bit. There are a number of states that are trying to mandate financial literacy or personal finance into the curriculum these days. I think there's some , you know , challenges to that. And I don't know that that's going to make a ton of progress. But , you know , it's something's better than nothing , that's for sure. But I think we're we're making strides. But really what has to happen , I think , is the parents need to be the ones that kind of take charge here because they're the ones with the money. And the real lessons in life when it comes to money are learned by doing this stuff , not necessarily studying it. Now you have to study , but the real lesson is when the rubber hits the road is when you're actually doing stuff with the money and you say.

S1: The younger kids are when they start learning about financial literacy , the better. So what's the thinking behind that ? Absolutely.

S3: The thinking is very simple. Honestly , the thought here is practice makes perfect , right ? If you're going to play the piano , you're going to get better on an instrument. You're going to get proficient in a sport. You start early and you practice , practice , practice. It's the same thing with money. If you ask me , you literally need to get them started early. Learning two basic things. The first is how do you get money , right ? By earning it. And so once you earn the money , then you go into number two , which is how do you manage it ? So that earning and managing money is very fundamental to getting them lined up , to practice , practice , practice. And if they can do that , it works like they'll get it and they'll make better decisions throughout their lifetime. I know I'm going on and on here , but I have I have six kids and five have left the nest and all five of those who have left , as have they have more than $10,000 saved up before they left. I think that's amazing. And it's not because I'm paying them $200 to wash the car , I can tell you that much. So if they learn early , it really sticks.

S1: You also focus a lot on interest rates.

S3: If you think about it. And these are very kind of cryptic terms for kids , especially a hillock or an arm or a , you know , credit card interest rate. All of these things are kind of nebulous to them , but they all have to do with interest. And so if you can teach them kind of what it means and how it's better to earn it than to pay it , I think that that is a big game changer as well. And so explaining these very basic things to them in a very basic way can let them have that light bulb go on for them so that they can understand it and do just that , earn the interest and not pay the interest over time.


S3: I love talking about investing in kids because they actually get excited about it pretty easily. And I like to say , if if if kids want to start to learn how to invest , let them invest in something they find to be kind of cool or they have interest in. If your kid every time , you know , you're driving down the freeway and they see a Tesla thinks that that is cool. Oh , I love how that car looks or whatever. And the fact that it's electric , I don't know , whatever. That's something. Maybe that's what they should do is start getting involved in that stock of that company and then all of a sudden they can understand not only they think the car is cool , but they can also start understanding , you know , appreciation in the stock. Price or when it goes down. Why did it go down ? Why did it go up ? If they have if if the company spins off a dividend , what is that like ? That's an amazing thing for a kid to learn and all of a sudden , wow , I got a dividend , I got money from that company I invested in , and I didn't even have to do anything for it. Like , that's a pretty amazing phenomenon for a kid to learn early in life. And let me tell you , if they learned that early in life , that changes everything , especially when they start thinking about , you know , participate in their 401. When they get their first job and all that kind of stuff , it starts to snowball. And then you have a kid who really has a great future ahead of them when it comes to , you know , speaking financially.

S1: I mean , and you said you have six children , five of which have left the nest with $10,000 in savings.

S3: When I say savings , I mean money saved up and also money invested. And and they absolutely kind of got that right. And now , you know , the boys get together and they're talking about , you know , who's doing better with their stocks. I love it. Like that is the kind of thing that I think and frankly , you know , when you have a little house full of of kids , competition is a good thing right there. They're kind of talking about things and wanting to do better than their brother or their sister. Like , that's that's a great thing. If you ask me to get a kids involved in early in the game and they're going to get some hard lessons , too , right ? They're going to have some dogs. So they're going to have some stocks that don't really perform like they had hoped. That's a good lesson to learn , too , and I believe that's a good lesson to learn earlier in life as opposed to later if you're going to lose , you know , five bucks on a stock , that's a lot better than losing , you know , $5,000 on a stock. So once again , it goes back to earlier , the better. Let's let them practice , let that let them get some experience. And all of a sudden , they're going to be much more savvy than maybe we used to be.

S1: And , you know , these concepts of financial literacy , to your point , you know , they're difficult for many adults to grasp. Yeah , perhaps because we all needed to start learning about them much earlier , as you said.

S3: And I think these are these are these are difficult concepts. And and they take time. They take some time like we've all had perhaps the experience of buyer's remorse. Right ? You buy something , you save up or something you really wanted and you buy it finally. And then you're like , That wasn't as great as I thought it was. Or darn , I wish I would.

S4: Have all the. Time.

S3: Time. A lot of different car or whatever , right ? That's only something you could learn as a matter of time and experience. And so , you know , it's a hard lesson to learn , but I think just the experience is the difference maker.

S1: You've been listening to Midday Edition on Kpbs , and I'm talking with Greg Mercer , a certified financial planner and CEO of Busy Kid. Okay. So walk me through it.

S3: Now I think you can teach a kid the very , very most fundamentals of money and maybe you do want to use a dollar bill and a $5 bill and a quarter , that's great. They can learn that in about ten minutes. After that , I think you should throw all that old school stuff away , take the piggy bank and the envelopes and all that stuff , throw it out the window and use technology because kids get technology. They're good at it and it speaks to them. So let them use it. You know , there's a lot of things they use technology for that probably are a money and a time waster. Let's use something. Let's use technology for a good reason. And so let them use technology. And I believe , you know , we've created this little ecosystem with busy kids , but like , this is literally what you need to do is teach them that money comes from somewhere , right ? The old proverbial money doesn't grow on trees. Well , no , it doesn't. So where does it come from ? Well , it comes from doing stuff. And so I believe it's a good idea to give kids chores to do and pay them. Now , I know there are some people who think they don't like chores and paying them and all that. Okay , fine. Then use something to where you give them some money on a regular basis. If they kind of , you know , meet the expectations of your home life , that's great. But they got to get the money first. And once they get it , then it's a matter of , I think , teaching them these three major categories , saving and investing , sharing , which is like giving philanthropy , right ? Making sure they know the world is bigger than just them and then spending. And typically they spend with a card or their phone. And so let them use technology to not only earn the money , but manage the money in those three big buckets.

S1: What age do you. Start this process.

S3: Oh , think you can start at five years old ? I mean , really , it's something that you start them early and often and they get it. And really back to that other point , that is the reality of what I just talked about earning and then saving and investing and then sharing and spending. That is what we do as adults. I mean , we go to work , we earn some money , and then with that money , we usually save and invest , usually like , you know , 401 or something like that. We share with church or charity or something we care about we think is important. And then we spend the rest , right ? And we do it with once again cards and phones. So that is exactly what we do when we're adults. So why wouldn't we want to teach them exactly that when they're kids ? Get them used to the reality of life. And I think that's it.


S3: I think you turned the tables on them so the next time they want something really bad. Okay. I think this is a perfect opportunity to say , Hey , I think that's awesome that you want that scooter or that dress or that whatever and knock yourself out. Imagine all the money you can make by cleaning our house , washing our dog or doing all these things like that would be wonderful. Once you earn the money , you can go out and you can go buy it , you know , with your own card. Now , that's an amazing thing , right ? So turn the table on them and let their excitement for whatever they want , change the way they think about money. And so I think that's a great one. And when it comes to investing , again , let them invest in something that they think is cool or that they have interest in. Don't force them to go invest in some company or fund that they just have zero interest in because it's not going to be you know , it's not going to be something that they stay with.



S3: Know what the fallacy of all this is ? Parents and adults or , you know , they agree that kids should learn this stuff. But what they don't realize is that most kids actually want to learn about this stuff. They see some of their , you know , in social media , you know , the celebrities , they seem to have all this money and all this stuff. And kids gravitate to that for for good or for bad , but they gravitate to it. And so it's really something that they want to learn about. And if you make it something that is , you know , pretty interesting and you use technology and you reinforce reality , they like it and they get they get used to it and they actually get good at it. But you have to set the stage like that. You need to teach them that this stuff is just not something that you're good at right out of the gate. You know , sometimes they see these , you know , celebrities that have all this money and they're 20 years old or whatever. Like , that's usually not how it works , right ? For the rest of us. You got to you get a really kind of work for it and be smart. And so teaching them that and reinforcing that through realistic kind of experiences , that's where the rubber meets the road and it really helps them become more proficient at this.

S1: I'm speaking with Greg Morissette. He's a financial planner and the CEO of Busy Kid , which helps teach financial concepts to children and their parents. Stay with us. We'll be right back with more after the break. Still ahead , more tips on teaching kids how to be financially savvy.

S3: If you can do it fairly consistently , you're going to make a big difference in your kid's life. And especially if you're in that circumstance. You want to try to do the things they're going to break them out of that situation that they're in.

S1: Kpbs Midday Edition is back after the break. You're listening to Midday Edition on Kpbs. I'm Jade Hindman. This hour on Midday Edition , we're tackling the tricky subject of financial literacy and more importantly , how to guarantee your kids can understand these topics at a young age. Joining us is Greg Morrissette , a financial planner and CEO of Busy Kid. So , Greg , you know , as a parent , you can really only teach your child what you know.

S3: So there's a lot of parents that feel very insecure when it comes to like , you know , money matters in their home and in their life. Right. And so I think the best thing a parent can do is just be completely honest with their kid and say , listen , I stink at this or I'm not that great at this. Let's do this together. And I think the best way they can do that is once they once they've level set things like , Hey , I want to learn along with you , then you all of a sudden don't have to be like the know it. All right ? You can just say , listen , we're in this together. I want to learn and you want to learn. Great , Let's do this together. And I think it all starts with a with a parent talking to their kid in a very transparent way about what it cost to run their household. This is so easy. Okay. Next time you're sitting on the couch with your kid , maybe you're watching Netflix or just , you know , loafing around and ding your your phone. You know , email comes in and it's the electric bill. Great. This is a perfect opportunity for you to say , hey , come over here. I want to just show you I just got this bill. It's our electric bill. And and we live in Phoenix and it's August and it's $550. Right. Oh , my goodness. And you just share that with your kid. Even better , let them help you pay it. Right ? This is what you do. You push this button , boom , boom , boom. And 550 bucks is gone. Just like that. Like that is such an easy thing to do. It takes one minute and you can do it with so many different things. You can do it with your not only your electric bill , but maybe your insurance or maybe it's it's a repair for the car that you have to pay for or , you know , like , you know , food , all that stuff. Let them help you make a online pickup for your groceries next time. Right. And you know , you're just tapping on yogurt and tapping on milk and eggs and whatever. And next thing you know , it costs $87 or $187. And that's going to blow your kid's mind , too. If you can just let them kind of experience that. I think that's how you make some big headway in a family , even though you're not like super great at it yourself.


S3: Debt. That debt , if you look at it over the landscape , you know , national debt is at an all time high , $32 trillion. We don't even know how many zeros that is. We got consumer debt all time high , student loans. Oh , my goodness. So I think just not having good education , not having good experience with money and getting proficient or good at it , I think is what happens is you get sucked into the this kind of spiral of debt and then , boy , is that hard to get out of. So if you can teach a kid earlier in life how to make better financial decisions , they're not only going to have more money just laying around , but they're going to use that money to hopefully stay out of debt. And and if you can teach them that whole concept of , hey , let's let's earn interest and not pay it , that's a really good important thing to do. And I think , once again , this is not that hard. I mean , next time you're in a the checkout stand or maybe maybe you're buying something online , just have your kid say , hey , come over here. I want to just show you something and pull out two cards. Right ? One could be a credit card and one could be a debit card. And they and just say , hey , do you know what the difference is between these two ? And they'll be like , Yeah , I don't know. They look pretty much the same. Well , yeah , but let me tell you this one right here. If we make this purchase online right now , it's going to suck it out of my bank account right away. Boom , 50 bucks is gone. And this credit card , you know , they kind of tally it up and they send me a bill at the end of the month. And if I don't pay the whole enchilada , then I'm going to have to pay , you know , a penalty. And that's called interest. Oh , my goodness. Seriously ? Yeah. So why would you ever want to use that card ? Boom. It's pretty easy conversation at that point to happen. Boy , you just open them up to a big , huge learning. That will hopefully keep them out of that whole death spiral of debt for the rest of their lives.

S4: What about.

S1: You know , the the the family who has debt , who has no credit or bad credit , who doesn't have money to invest , who's paycheck to paycheck and or maybe even on public assistance. Their financial situation is very different. And they and so are their resources. So how are you able to pass on financial literacy when you're in that situation ? Yeah.


S3: So I think another I think this is another good reason why you should be transparent with your kids. And I know that's going to be tough , right ? It's going to be hard to to kind of just say , listen , we're up to debt to our eyeballs and that's why we're not going to go out to dinner. That's why we're not that's why we're not doing some of these things because we're trying to get out of it. We're trying to make our family more self sufficient when it comes to money. These are the reasons why we're making these decisions. I think it goes back to being transparent with them. And I don't I think it's also a good reason to say , listen , guys , we're we're having a hard time making ends meet and maybe we should talk about doing some side hustles to help the family. Right ? Maybe Johnny could go and see if he can mow the lawn for the neighbor down the street or walk their dog or or , you know , babysit or whatever. I think I think once again , I think transparency is better. Kids are pretty understanding of a lot of things. And I think finance is another thing that they're pretty understanding of. So if you can be pretty straightforward with them and say , listen , this is where we're at , I think they'll be on board to help out Now , maybe they won't , but I think for the most part , I think kids will do what they can and they'll be understanding. When you say , you know , I guess that's why we're not going to Disneyland or whatever , This is a good thing to do. So more transparency , more clarity is better for the family.

S1: And I think that a lot of parents tend to go the other way with that. Totally. You know , the.

S4: Thought is that.

S1: Yeah , that you want to shield your children and that getting them involved to that level may in some ways rob them of their childhood or stress them out.


S3: That's reality , honestly. Some of that some of that stress is probably good for , you know , a lot of kids are , you know , living in some la la land that's really going to come crashing down 1 in 1 day or that big bubble over them is going to pop. So I don't know that you're doing any favors for them being like super shielding and oh , your childhood is just , you know , there's there's no concept of money and everything just happens. Like I think it's a disservice , frankly , to do that to a kid. I think that they're better off , even though , believe me , I've done it myself. I've indulged right. I've done something for the kids that I probably shouldn't have. Right. And we all get that. It's an emotional thing and it happens and it's coming out of love. And , you know , I get it. But if you can be , I would say , fairly consistent with reality check , then your kid's going to be much better off. And the odd the occasional splurge or indulging them is okay. I mean you gotta you love them , right ? But but I would say the more you can teach them about the realities of life and the life that is coming their direction , inevitably the better off they're going to be.

S1: Kids are smart and they quickly pick up on what the adults around them do. So what's one of the biggest mistakes you think that parents make when it comes to spending habits and their children ? Okay.

S3: So I think one of the biggest mistakes is just handing them money. Okay. And I've done it , believe me. You know , hey , I want to go to the movies. Okay. Go ahead. Well , I need I need money to go to the movies. And what do you do ? You pull out your pocket , you know , 20 bucks or you hand him your card or it's just like , oh , no , don't do that. I think that's a big problem if you if you just kind of hand them over money on a regular basis , they're going to that's going to be detrimental for a couple of reasons. Number one , they're going to start expecting it. And that's a big problem because if they start expecting it and become entitled , you got a big problem on your hands because then they're going to be living in your basement until they're 28. And who wants that , Right. So don't.

S4: Do it. It's common.

S1: These days.


S3: Yeah. Like I said , I've done it before , so but and it's so much easier in the moment , like I'm giving. But if you say , you know what , What are you talking about ? I gave you I gave you lots of stuff. To do this week. You could earn the money to go to the movies If you just do your chores every day , all of a sudden you're not only teaching , you're not being you know , you're not being a jerk. You're being realistic. Right ? If I didn't go to work for three weeks , I wouldn't have any money to spend. Right ? So , you know , you could always tell them that , like , what do you what do you think ? Why do you think I go to work every day ? I got to get the money so that we can do all this stuff and pay all the bills. So this is really important. If you just say , listen , you expectations , you could have earned this money if you would have done your chores. And so , you know , I wish you could go to the movies , but , you know , sorry. And it's hard to say that , right , for the first couple of times. But if that becomes the kind of expectation that that goes on in your house , it gets easier because they know the rules of the road and they're not going to come ask you again because they know what the answer is going to be. So what I would say is be fairly consistent. We don't have to be perfect at this because none of us are going to be perfect. We're going to lose our minds and give them $20 once in a blue moon to go do something or it's spring break or , you know , it's the holidays and , you know , we're just feeling the love. I get it. I totally get that. And that's okay. But for the most part , if you're fairly consistent with this stuff , they'll get it and that'll be a good thing for them in the long run.


S3: You know , it's a free resource. You can go get some videos , start learning that way. But I think at the end of the day , like you said , I mean , it really comes down to practical life learning lessons where you're doing stuff right and you don't need a ton of money to do that if you , you know , and there's a lot of people in a very , you know , tough economic circumstances that they themselves are probably making decisions that , you know , could probably be different and , you know , coming up with an extra 10 to $20 a month to teach your kids these fundamental things like , you know , do whatever it takes to to do that. You don't have to do it with big dollars , but you do need to do it with some dollars. And if you can do it , like I said even fairly consistently , you're going to make a big difference in your kid's life. And especially if you're in that circumstance , you want to try to do the things that are going to break that cycle or break them out of that situation that they're in. So , boy , just scrimp and scrape and try to do everything you can to to help your kids.

S4: You know.

S1: Money isn't everything , though.

S3: And I think there's a good balance between just spending time with your kids and and spending money on your kids or , you know , so you definitely , definitely have to keep that all in perspective. And and I think time is the most important thing. And , you know , it's very kind of cliche probably , but they grow up fast. You only get them for a little bit and you got to really make the most of the time that you have. But at the end of the day , they're going to be making financial decisions every single day of their life. And so you might as well start them early , get them practicing so they can leave your nest and never come back. Except the visit.

S1: I've been speaking with Greg Merced , a certified financial planner and CEO of Busy Kid. Greg , thanks so much for talking with us today.

S4: Thanks , Jade.

S3: Good to be with you.

S1: We'd love to hear your thoughts on today's show. Give us a call at (619) 452-0228. Leave a message or you can email us at midday at And if you ever miss a midday show , you can find it on all podcast platforms. I'm Jade Hindman. Thanks for listening.

Stacks of $100 bills are seen in this undated photo.
Alexander Nguyen
Stacks of $100 bills are seen in this undated photo.

Personal finances are tough. From knowing what investments to make, to simply making a budget with what you have now, it’s not easy to develop a better understanding of your own money.

If you can get past the jargon, however, there are plenty of ways to increase your own financial literacy and make some solid plans for your own future.


Paul Lim, a financial planner and member of the San Diego Financial Literacy Center’s advisory board.

Gregg Murset, certified financial planner and CEO of BusyKid.