What Your CPA Wants You to Know
A podcast for entrepreneurs! We are a husband and wife team running our CPA firm together. We know just how difficult it can be to take your business dream to a reality. Our mission for this podcast is to guide, empower, and educate entrepreneurs in an easy-to-understand way! We want business owners to have the information that they need when they need it, AND without the hefty accounting invoices from a CPA! Follow along for practical advice, tips, and tricks from a CPA who knows what it is like to run a business, and strategies to keep your business thriving from an MBA! We will also show you how to run a business while keeping your family and sanity intact along the way!
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What Your CPA Wants You to Know
81. Teaching Kids About Finances: Practical Advice for Parents
Ever wondered how to equip your kids with the skills to manage money wisely? In this episode, we share things we do with our kids to teach them about money!
We discuss how guiding your children to save for big-ticket items, like their first car, can instill lasting lessons in planning and patience.
We share practical tips and strategies for integrating financial education into your parenting. This is one topic we love to talk about, come join in on the conversation with us!
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And in the future, when they're big enough, we do hire someone to mow the yard, and I would probably be willing to pay them to do that instead. If they want to do that, welcome to what your CPA Wants you To Know.
Speaker 2:Tax and accounting help can be expensive, so we've created this podcast to help guide you through it all and make you feel like you have a CPA in your back pocket.
Speaker 1:I'm Carson Sands.
Speaker 2:And I'm Taryn Sands.
Speaker 1:I'm a CPA with over 10 years of experience helping people start and grow their businesses.
Speaker 2:And I'm an MBA with a specialization in marketing and entrepreneurship. Taxes suck and we want to make sure you don't pay more than your fair share.
Speaker 1:We're here to share everything your CPA wants you to know in a fun and easy to understand way. Let's get started.
Speaker 2:Let's do it Today. We have a little bit of a different episode for you we are going to be talking about Today. We have a little bit of a different episode for you. We are going to be talking about finances with your kids. So I guess this is a little bit of a parenting episode plus finances. So a little bit different.
Speaker 1:Yes, we are parenting experts. We have three children and all three are still alive.
Speaker 2:We do keep our kids alive together, among the other things like running this business and this podcast, which it's been a crazy summer. So this is the first time we've sat down in a while to podcast and I actually was messing up all of the technology. So we are back at it and the kids start school very soon, so we're excited to get the ball rolling again and feel like we have some sort of schedule the ball rolling again and feel like we have some sort of schedule.
Speaker 1:If you are missing us every other week because we're only posting every other week episodes now, then you know we're sorry for that. We know that most people are like I need accounting at least once a week.
Speaker 2:Definitely.
Speaker 1:But I'm sorry to hear, and some people might say that it's still two episodes too many per month. So I guess you know it depends on who you are.
Speaker 2:Such an exciting topic, I know, but it has been really nice for us to take a little bit of a break and go down to two episodes. So, if you didn't notice yet, we are just doing a bi-weekly episode now and I don't know that we will go back to weekly, but if we do, it'll definitely probably be during tax season, whenever people actually want to listen to tax and accounting advice.
Speaker 1:Well, and most of the episodes we have are still applicable. Tax laws do change, but a lot of them are general information, and so we had so many things. We wanted to get out there as quickly as possible to help as many people as possible, especially once we stopped taking new clients. And then now we feel like there's a great deal of information out there. The biggest things we wanted to cover we've covered, but there's still a lot of other interesting things and helpful things that we can talk about, so we'll still be coming at you every other week.
Speaker 2:Absolutely so. Today's podcast episode the idea came from something I shared on my personal Instagram page about us helping the kids save for their cars, so that sparked so many conversations. I was like we should definitely talk about this on the podcast. We'll answer all the questions I got and just explain what we do. Now our kids are still pretty young we have a nine, six and five-year-old, so we still have a lot of time before they're making this big purchase.
Speaker 2:But our thought here is that we're teaching them to slowly save up for something that they really want, so that instant gratification that everyone likes.
Speaker 2:We are teaching them that if you have a big financial expense, you need to slowly plan and save for it, not just make these crazy decisions on a whim. So for that reason, this episode is going to be all about money management for kids and the things that we're doing. That, I feel like, helps teach them about money management, because it is so important and, unfortunately, is one of those things that's just overlooked a lot. When you're parenting and I get that there are so many things to focus on, but, coming from two different households that just didn't really focus on money management and teaching us we had a lot to learn when we got married and we made a lot of big mistakes. So I think that is one of the reasons that we're so passionate about teaching our kids about money and obviously we're in finance, so that is very important in our household. But hopefully today we share a few things that you can implement with your kids that are relatively easy I know you don't have a lot of time, but will make a big impact also.
Speaker 1:Yes, we did make some mistakes, and you know. I think that that just goes to show that, even though I'm a CPA and you know I should be an expert on money, personal finance is different. Be an expert on money, personal finance is different. And Dave Ramsey likes to say that personal finance is only 10% math and it's 90% emotional. I guess, yeah, and it's true. I mean, or it can be, it can be 90% math as long as you force yourself to make it be that. But if you don't really focus on it, then you'll let your emotions get control and tell you what you think is a good idea at the time and it might not be.
Speaker 2:Yeah, exactly, and I think that's happened to every single person listening, and us included. So we've really, since we got married 11 years ago, we have just turned things around completely. We took our personal finances very seriously and we did get into Dave Ramsey and his teachings just to help us get in that right frame of mind. If you've listened to our personal finance episodes, you've definitely heard us talk about Dave Ramsey and his teachings just to like help us get in that right frame of mind. If you've listened to our personal finance episodes, you've definitely heard us talk about Dave Ramsey. So another thing that he also talks about is kids' personal finance. So we have been talking about this for years, like what we want to do with the kids, what are some things that we will start including in just our habits so that we can teach them all of these things. And one of the things we've been talking about doing for years is setting them up a car fund for each of them, and we finally did that last year, and so we're going to talk a little bit about which account we set up, how we do it, how they put money into that and all of that on this episode. So last year we set that account up for each kid through Ally, and Ally is an online savings account and there's a lot of reasons that we picked this account. So if you'll explain what that is and how an online savings account works, then you'll see why we chose this account works. Then you'll see why we chose this account.
Speaker 2:Are you ready to feel confident with your personal finances?
Speaker 2:Have you planned your retirement savings or looked into life insurance for you and your family?
Speaker 2:We meet with clients all the time to talk about their financial goals and their personal finances, and we kept getting the same questions over and over again. For that reason, we compiled everything that we want you to know into a workbook. In the personal finance workbook, we help you focus on your short and long-term financial goals and create a plan to stick to them. We walk you through the advice that we give on budgeting paying down debt, building up your savings for those unexpected events, calculating what you should be saving for monthly retirement based on your goals, getting life insurance to protect your family, and you get one month of email support from us and monthly financial templates to help you use and track your progress all year long. This workbook is priced at $37, which is so much cheaper than sitting down with your CPA, and it has everything we want you to know in there. If you're interested in checking it out and ready to meet your financial goals, check the show notes for the link to purchase.
Speaker 1:So we had actually been meaning to set up an Ally Savings Account for a while and we had one at our normal bank making 0.05% interest.
Speaker 1:And while I don't think a savings account is your best vehicle for all of your investing because even at 4.5%, which is what we're getting now, that's not going to get you where you want to go for retirement you might as well be making 4.5%, so you're at least keeping up with inflation instead of basically losing money every year on your savings account. But it was kind of a hassle, or it seemed like it, so we didn't do. It Turns out wasn't really much of a hassle at all, not at all of a hassle at all, not at all. But this car fund idea was what pushed us over the edge. Finally, because Ally has a savings account with multiple buckets, which is just it's still one savings account, so it's not as if each child has a separate savings account from us. It's just our main savings account at Ally, but there's buckets within that that you can earmark for medical expenses, for certain other types of savings that are important to you, and we also made a bucket for each of the kids car fund.
Speaker 2:And what's great about this is it only takes a few minutes to set up. Like you said, it's just one account, so I don't know why we put it off. It was so quick to do this. And then you have all of these buckets, which before we had our emergency fund just in our general savings, which is just like this one sum of money, and I had this like spreadsheet basically saying oh well, this is kind of like for medical and this portion of it is for our taxes that we have to pay coming up, that type of thing. So with Ally we're able to move all of our savings into that one account and then create the buckets. What's cool about that for the kids is they can see, like it specifically says, sailor's Car Fund, slate's Car Fund, scotty's Car Fund, and they love getting on the app and looking at how much money that they've put into it.
Speaker 1:And it seems like so much money to them because they've never actually had that much money. So yeah, and it is growing, it's becoming a nice little fund for them, and it will continue to grow until they're 16. So that'll be great.
Speaker 2:Yeah, I think right now our oldest has about 2000. Is that right?
Speaker 1:Yes, right around there.
Speaker 2:Okay, so we've just got started, so that's actually some really great progress for her, and it does seem like a lot of money, but she definitely has time. The next thing that came up was this question, over and over again when I posted about this, was where are they getting the money to put into their account and do we pay them for like chores, like so where's this money coming from?
Speaker 1:They just sell drugs a little bit on the side. Nothing hardcore, you know, just a little here and there.
Speaker 2:Oh my gosh, the dad jokes never end, ever. Okay, our kids don't sell drugs, but what happens is we kind of thought about this for a little bit as our kids were getting older and we were making them pitch in more around the house, so just putting their plates up, putting their laundry up, just doing things as we ask. As you know, kids and chores sometimes are difficult, but we made the decision that we didn't want them being paid for daily chores. So, to answer that question, we do not give them like an allowance, so that's not where this money is coming from right now. We might do some sort of allowance, something in the future, as they're spending money more, just so they can budget, but right now they're not getting paid for chores, so they are doing everybody has specific chores that they do and we're slowly building on that but we feel like in our family we want everyone to pitch in without being paid for it.
Speaker 1:And that applies to just the daily everyday things that people have to do when you're an adult. We're trying to train children to become adults one day, responsible adults that pick up their house and know people aren't going to pay me, as an adult, to clean my own room or to do the dishes, and so our attitude is kind of you eat here and you ate the food that we bought, actually, and so doing dishes, no, we're not going to pay you for that. Most of the time we do the dishes, or we're not going to pay you to wipe off the table or clean your own room or make your own bed.
Speaker 1:There are jobs that we do that we feel like you know maybe they're not part of the normal everyday thing. Like we're going to clean out the flower beds and you know they could go play and that's fine, they don't have to help us. But flower beds and you know they could go play and that's fine, they don't have to help us. But we're like, hey, if you help us pull weeds, then you know we'll give you $10 or something. There's times when we do stuff like that and in the future, when they're big enough, you know, we do hire someone to mow the yard, and I would probably be willing to pay them to do that instead, if they want to do that.
Speaker 2:Yes, this will change for us in the future. We kind of have an idea of certain tasks that we'll ask them like hey, if you want to take this over, then we will pay you weekly or monthly whatever for that. But as of right now, we just don't want to reward them for doing things that they have to do. Everybody has to do them, they're not fun. But we just tell them, like we don't get paid for chores, and neither do you. Obviously, that is just a personal preference. It's not like professional advice, that's just our preference. So that's how we're standing with chores.
Speaker 2:So where does this money come from? The money that they're putting in now is mainly from birthdays or holidays, things like that. So my kids have a lot of grandparents and great grandparents. So for their birthday, like, my dad gave our oldest a hundred dollars and she could either spend that or choose to save it. And now every single time we're asking them hey, do you want to put that in your car fund? So that's where those are coming from. The big, bigger ones are just birthdays and Christmases. But I know like for Valentine's Day they all got a $20 bill from my grandma and we asked them do you want to put it in your fund or do you want to spend it? So we're just kind of working on the save and spend part of that too and honestly, that part has been going really well.
Speaker 1:Right. If we felt like they were never choosing to save, we might step in and even have to force their hand a few times, but we haven't had to do that. Almost all of it they want. You know the big amounts that they get. They want to put it in there because here's part of the reason we match it. If they put it in their car fund now, it's there forever, but we match it.
Speaker 2:Yes, that is. The second step to all of this is that we are matching anything that they save, so that helps in a lot of ways. Obviously, if we wanted to make it happen, we could purchase cars for our children, but we want to teach them about saving for money and we want them to have pride in this big purchase, so we want them to have some skin in the game. And I actually had a lot of people message me saying that their parents did this and that they really respected their car. They felt like such, like so much pride in that and they took care of it, like all of these things that you just don't get if someone just hands you over something.
Speaker 2:So, yes, we could buy them the car, but there's so many reasons we're not. So matching does a few things it helps them out, because we all know how expensive cars are right now and just ridiculous but also it helps us save for the car as well. So at first, when we were thinking about matching, I kind of was like why are we matching it now? Why don't we just match it whenever we go? So if they have $10,000, you know we'll give 10,000 whenever we buy the car. And Carson was like no, we need to start slowly saving too. So this is just a way for us to slowly save for three cars that we'll be buying in just four short years.
Speaker 1:Yeah, and you can look at old companies for an example of why it's better to do it this way. Because you know they used to have pensions or what they called deferred compensation plans, and it's just something that they don't put any money in. But when you retire, the company has to pay you out for the rest of your life as part of your retirement, but nobody ever saved any money for it, and it's unbelievable how many of the times these companies went bankrupt because of this and all the people that were retired were screwed over. Anyway, it's just a lesson that if major corporations can't do it, you probably can't either.
Speaker 1:But what does work is a 401k plan which is what they all do now where the employee contributes some and then the company matches it right then. So the money's already there. They don't have to come up with it later. That's what you should do as well Go ahead and put it in there, and even if you know you'll have the money down the road, imagine how much less it will sting to put in $100 today, maybe $100 on Christmas, instead of trying to let them save up $15,000, and then you have to come up with another $15,000 to match it when they're $16,000,. That's going to sting a little bit.
Speaker 2:For sure. I think you're completely right, because we've already put in $1,000 to her car fund and I haven't really thought that much about it. It does kind of suck. She got $300 and we have to turn around and spend $300 again whenever it's like, oh, we've already spent money for Christmas or her birthday or whatever. But slowly doing that is such a blessing for not just the kid to learn all of these great things, but also for you. So we highly recommend doing this. It is super easy to set up and the kids have been doing so well with it.
Speaker 1:So, and just in case anyone's like, this sounds really sad because we're like stealing all their birthday money or their Christmas money. You know they first we buy them everything they need, not even for their birthday or Christmas, and then we buy them everything they want pretty much or their grandparents and parents do, um, and great grandparents for they pretty much, or their grandparents and parents do, and great grandparents they pretty much get everything they want as presents and so there's not really a whole lot more that they even want by the time they get the money. And so it kind of makes sense for them to say, no, I'll take double the money and put it towards my car down the road, but we do still have them. If they get $100 in cash, we might, might have them out of all the different money they get from parents and grandparents. Hold back that so that they could go shopping for their birthday and anything they didn't get for their birthday they can pick up at that time.
Speaker 2:Yeah, absolutely, and that's another thing that I've been sharing. That we've been doing on my Instagram is that we have been making them pay for certain things and, yeah, some people may comment saying that it's sad, but the vast majority of people think that that helps so much, like we do. So. For example, sailor had a couple hundred dollars like in her piggy bank and she was wanting to do all of these things. But all summer we've traveled, we've done all of these experiences, we've taken them to the water park, we've spent a lot of money and I just told her hey, if you want to do that, this costs $50. Well, of course, to a kid, $50 is a lot of money. So a couple of times she said yes, and then she feels really bad about spending that. Not that she feels guilty for spending, but it didn't feel like it was worth the $50 to her in the end.
Speaker 1:Which, as a parent, makes you go. Oh so you're happy to spend my money on this, but you don't want to spend your own money, so you didn't really want to do it that badly.
Speaker 2:Exactly so. I think that they've learned so many good lessons. We've just started that in the last year or two and our oldest we've had those conversations now a few times. So one time it was to go to a carnival and I was like we're not going to do that. We've been doing all of these things.
Speaker 2:That's just not in the budget for this week, and so she ended up paying for it, and then she was sad afterwards that she didn't have the money and I'm like that's such a good thing to talk about right now. And then there's been a couple instances where she chose not to use her money, and one of those is like getting your nails done Our youngest. I told her how much it costs and I said you can join me and pay for your own nails, or you can just paint your nails at home for free, but if you want to get your nails done with me, you do need to bring your own money. And one of them chose to pay for it and one of them chose to stay home. So I think these little built in lessons have been really helpful, as they're starting to understand the concept of money.
Speaker 2:I agree to understand the concept of money, I agree. The last thing I did want to touch on because this came up a lot was that as they get older and we're getting closer to that deadline of purchasing the car there definitely is going to be some more money that needs to be earned. And what are we going to do as they get older if we're not going to give them, like an allowance or anything for chores, and I think we're just going to encourage our kids to get creative with ways to make money? So either, like Carson had mentioned, mowing lawns or babysitting? My daughter has a gymnastic instructor who is going to be a senior this year, I believe, and she gives private lessons to the little girls in her class and she makes extra money.
Speaker 1:Has been for like two years, right? Oh yeah, she's been doing it for years.
Speaker 2:And it's a really great way for her to make extra money and it works around her schedule. So I think that that's another lesson that they'll be having in the future that they need to come up with some ways to make money. Not necessarily go get a job at, like, the mall or something, because that won't make them much money yes, but also because they are so busy with sports and stuff they are going to get have to get creative on ways they can make money between their schedule. So babysitting, mowing lawns, giving lessons, that type of thing.
Speaker 1:So and we think they'll be able to make more money even than most teenagers do at these things, because we're going to help them set. Y'all know we love business. We're going to help them set up their businesses the right way. I mean, um, we have so many, just babysitters, for example. We gave that as an example and they are awesome babysitters. Kids love them and I think they could make more money because they don't ever know it's like how much do you charge? They don't know. They want us to make it up.
Speaker 1:And I was like pay me whatever you want and I'm like well, maybe that actually is a good strategy, because we probably end up paying them more than they would ask for, because I feel like guilty about it, but we're going to help them come up with a book of.
Speaker 1:You know, these are the times I'm available during this fall semester. Um, this is what I do. Here's my CPR certification. This is what I charge hourly. If there's multiple kids, it's a different rate, all of these things. Um, if you get back later than you told me, I'm going to charge you a penalty, just like daycares do, because we might not call it a penalty, but you know'm saying and same thing for mowing yards. Um, you know, if, if any of them want to do that, you know, I'll even buy the mower so they can go do it and we'll have to pay back slowly oh yeah, yeah, if it's my mower, you know, then hey, they have to learn so they could buy their own mower and it's gonna, uh, they'll get more money that way.
Speaker 2:So yeah, that's what we plan to do for the future. I think that having some lessons with running a business helps in so many things. Running finances, even if it's just a simple babysitter's club, we've talked with the kids about this a lot and given them hey, you could do this. Or if we see a client's doing really well with something, we're like, hey, what about this? When you get a little bit older, you could do this. So we've had a lot of conversations about the future and ways that they can make more money to put in this car fund as we approach that time. So that's just a little bit of the things that we're doing with our kids and finances.
Speaker 2:And this was such an interesting conversation in my DMs on Instagram so I thought this would also be a really great podcast episode. So if you agree and you love this episode, or you listen to our podcast and have not yet done a review for our podcast it only takes like 60 seconds If you would please do that today, we would so appreciate it. That is what keeps our podcast going. Do that today, we would so appreciate it. That is what keeps our podcast going and we love to read those reviews.
Speaker 1:Yes, but please do five stars only. If you didn't like us, then you know, just keep it to yourself, just like your mom told you.
Speaker 2:if you don't have anything nice to say, don't say anything at all Until next time. Thank you so much for listening to.
Speaker 1:What your CPA Wants you To.
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Speaker 1:You To Know Podcast. This podcast is intended to provide accounting and tax information for educational purposes only. All tax situations are unique and should be handled with the assistance of a tax professional.