Slow and Steady Wins the Race: Lessons in Financial Planning

About the Guest(s):

Kerrie Beene is a Certified Financial Planner™ and the Chief Investment Officer at Rooted Planning Group. With years of experience in the financial industry, Kerrie is dedicated to helping individuals achieve their long-term financial goals through strategic planning and disciplined investing. She is known for her expertise in investment management and her ability to guide clients towards financial success. Kerrie's passion for educating others about personal finance has made her a sought-after speaker and advisor in the field.

Episode Summary:

In this episode, Kerrie Beene, a Certified Financial Planner™ and Chief Investment Officer at Rooted Planning Group, shares the timeless wisdom of the fable "The Tortoise and the Hare" and how it applies to our financial lives. She emphasizes the importance of consistency, avoiding impulsive behavior, the power of compounding, and the virtue of patience in achieving long-term financial success. Kerrie highlights the parallels between the fable and investing, encouraging listeners to adopt a slow and steady approach to their financial goals.

Key Takeaways:

  • Consistency wins the race: Just as the tortoise consistently plods along the course, investors who consistently contribute to their portfolios or retirement accounts tend to achieve better long-term results than those who try to time the market or chase short-term gains.

  • Avoiding impulsive behavior: The hare's impulsive decision to take a nap during the race serves as a cautionary tale against impulsive investment decisions driven by emotions such as fear and greed. Investors should avoid chasing hot stocks or market trends and instead focus on a long-term strategy.

  • The power of compounding: Similar to the tortoise's slow but steady progress, compounded growth can have a significant impact on investment returns over time. Understanding and harnessing the power of compounding interest can lead to substantial financial gains.

  • Patience pays off: The fable of the tortoise and hare emphasizes the virtues of patience and discipline. Successful financial planning requires individuals to exercise patience in pursuing their goals and adhere to saving and investing strategies. Historically, the stock market has delivered positive returns over the long term, and embracing a long-term perspective can help investors benefit from the power of compounding.

Notable Quotes:

  1. "Slow and steady wins the race." - Kerrie Beene

  2. "Consistency and discipline are key to achieving long-term financial success." - Kerrie Beene

  3. "Avoid impulsive investment decisions driven by fear or greed." - Kerrie Beene

  4. "Understanding the power of compounding interest is crucial for maximizing investment returns." - Kerrie Beene

  5. "Patience and perseverance are essential for successful financial planning." - Kerrie Beene

Resources:

Conclusion:

In this insightful episode, Kerrie Beene reminds us of the timeless wisdom found in the fable of "The Tortoise and the Hare" and how it relates to our financial lives. By emphasizing the importance of consistency, avoiding impulsive behavior, harnessing the power of compounding, and practicing patience, Kerrie provides valuable guidance for achieving long-term financial success. Tune in to the full episode to gain a deeper understanding of these principles and learn how to apply them to your own financial journey.

Understanding Your Tax Return: A Line-by-Line Guide

About the Guest(s):

  • Kerrie Beene: Certified Financial Planner™ at Rooted Planning Group.

  • Kate Welker: Certified Financial Planner™ at Rooted Planning Group.

Episode Summary:

In this episode, Kerrie and Kate dive into the details of the 1040 tax return form. They discuss each line item and explain what it means for taxpayers. From reporting income to deductions and credits, Kerrie and Kate provide valuable insights into how the tax return can tell a story about an individual's financial situation. They also touch on topics such as capital gains, itemized deductions, and the standard deduction. Whether you're a tax expert or just starting to understand your tax return, this episode offers helpful information and tips for optimizing your tax situation.

Key Takeaways:

  • The total amount from Form W-2, Box 1 represents taxable wages and includes deductions such as retirement plan contributions and health insurance premiums.

  • Interest and dividends are reported on lines 2 and 3 of the 1040 tax return and can come from various sources such as bank accounts, savings bonds, and investments.

  • Lines 4, 5, and 6 cover retirement income, including distributions from IRAs, pensions, and annuities. It's important to understand the tax implications of these distributions and consider withholding taxes if necessary.

  • Line 7 deals with capital gains and losses, which occur when selling assets such as stocks or mutual funds. Long-term capital gains are taxed at a lower rate than ordinary income.

  • Line 8 includes other income from Schedule 1, which can encompass various sources such as business income, unemployment benefits, alimony, and gambling winnings.

  • The decision to take the standard deduction or itemize deductions depends on individual circumstances. The standard deduction is often the more beneficial option for many taxpayers.

  • The qualified business income deduction can provide tax benefits for business owners, allowing them to deduct a portion of their income.

Notable Quotes:

  • "Your tax return tells a story. It can provide valuable insights into your financial situation and help you make informed decisions for the future." - Kerrie Beene

  • "Understanding the different tax rates and how they apply to your income can help you optimize your tax situation and potentially save money." - Kate Welker

Resources:

Don't miss this informative episode where Kerrie Beene and Kate Welker break down the 1040 tax form and provide valuable insights into optimizing your tax situation. Listen now for expert advice and tips on understanding your tax return. Stay tuned for more enlightening content from Rooted Planning Group.

Understanding the Tax Bucket Strategy for Retirement Planning

About the Guest(s):

Kerrie Beene is a certified financial planner and the chief investment officer at Rooted Planning Group. With years of experience in the financial planning industry, Kerrie is well-versed in helping clients navigate the complexities of taxes, investments, and retirement planning. She is dedicated to educating individuals on the tax bucket strategy and providing them with the tools and knowledge to make informed financial decisions.

Episode Summary:

In this episode, Kerrie Beene discusses the tax bucket strategy and its importance in retirement planning. She explains the concept of dividing money into three different tax buckets: tax deferred, tax free, and after tax. The tax deferred bucket includes accounts like 401(k)s and traditional IRAs, where contributions are made with pre-tax money and taxes are paid upon withdrawal. The tax free bucket includes Roth accounts and health savings accounts, where contributions are made with after-tax money and withdrawals are tax-free. The after tax bucket includes checking, savings, and investment accounts that are funded with after-tax money and may be subject to capital gains tax. Kerrie emphasizes the need for flexibility in retirement planning due to the uncertainty of future tax laws. By understanding and utilizing the tax bucket strategy, individuals can have more control over their tax situation in retirement.

Key Takeaways:

  • The tax bucket strategy involves dividing money into three different tax buckets: tax deferred, tax free, and after tax.

  • Tax deferred accounts, such as 401(k)s and traditional IRAs, allow contributions to be made with pre-tax money and taxes to be paid upon withdrawal.

  • Tax free accounts, like Roth accounts and health savings accounts, require contributions to be made with after-tax money, but withdrawals are tax-free.

  • After tax accounts include checking, savings, and investment accounts that are funded with after-tax money and may be subject to capital gains tax.

  • Planning for retirement should involve a combination of these tax buckets to provide flexibility and control over future tax situations.

Notable Quotes:

  1. "The goal is to have some control over your tax situation in retirement."

  2. "While it could be better, it could also be worse. So we can plan for the unknown by thinking about different buckets of money that'll provide you with a little bit more flexibility."

  3. "The tax deferred bucket or the tax me later bucket... has your 401(k), your traditional IRA, 403(b)s."

  4. "The tax free bucket or the tax me never bucket... includes things such as Roth accounts and health savings accounts."

  5. "The taxable bucket or the tax me now bucket... includes things such as checking, savings, and investment accounts."

Resources:

To learn more about the tax bucket strategy and how it can impact your retirement planning, listen to the full episode. Stay tuned for more insightful discussions on taxes, investments, and financial planning from Rooted Planning Group.

Spring Cleaning Your Finances

About the Guest(s):

Amy Irvine is the CEO and founder of Rooted Planning Group. With years of experience in the financial planning industry, Amy is dedicated to helping individuals and families achieve their financial goals. She is known for her expertise in tax planning, retirement planning, and estate planning. Amy is passionate about educating her clients and providing them with the tools and resources they need to make informed financial decisions.

Episode Summary:

In this episode, Amy Irvine, CEO and founder of Rooted Planning Group, shares valuable insights on organizing and decluttering your finances. With tax season in full swing, Amy provides guidance on how long to keep tax returns and supporting documents. She also discusses the importance of maintaining healthcare documents, legal documents, and other essential paperwork. Amy emphasizes the significance of securely storing important documents and suggests creating a system to easily access them when needed. Whether you're a small business owner, a homeowner, or a student, Amy offers practical advice on managing and preserving important financial records.

Don't miss out on valuable insights and empowering financial advice! Subscribe to "Money Roots" today to embark on a journey of financial growth and empowerment. Join host Amy Irvine as she simplifies personal finance, making it accessible to everyone, from beginners to seasoned experts. By subscribing, you'll stay up-to-date with each episode, gaining access to practical tips, inspiring stories, and expert insights that will help you take control of your financial future. Whether you're looking to budget smarter, invest wisely, or secure your retirement, "Money Roots" has something for everyone. Subscribe now and start nurturing your financial well-being!

If you have any questions that you would like answered on the show, feel free to email us at info@rootedpg.com

Or visit us at www.rootedpg.com/podcasts for full show notes and links!

Key Takeaways:

  • It is recommended to keep state and federal tax returns and supporting documents for about three years. However, if you forgot to report income or have certain deductions, you may need to keep them for a longer period.

  • Healthcare documents, such as Medicare notices and records related to Medicaid applications, should be kept for specific durations to support your healthcare needs.

  • Legal documents, including Social Security cards, birth certificates, passports, and estate planning documents, should be stored securely. Copies of important documents should be accessible to trusted individuals, especially healthcare proxies and power of attorney documents.

  • Debt and asset-related documents, such as investment account statements and loan documents, should be retained for specific periods. Keeping track of cost basis for investments and maintaining records of home office expenses are crucial for tax purposes.

  • Property-related documents, such as deeds, settlement statements, and insurance policies, should be kept permanently. Additionally, maintaining records of completed coursework and employment contracts is essential.

Notable Quotes:

  1. "If you think you forgot income to report, then if it's more than 25% of your gross income, you want to keep six years." - Amy Irvine

  2. "If you have estate planning documents, such as a will, a trust, a power of attorney, a healthcare proxy, a living will, any beneficiary designation, store those originals." - Amy Irvine

  3. "If you're a small business owner, you want to keep a copy of your federal Ein number. This is something you should keep permanently in a secure location." - Amy Irvine

  4. "If you have any home improvements, keep receipts or a ledger that documents those because you may be able to adjust up your cost basis of your property if you ever sell the property in the future." - Amy Irvine

  5. "If you're currently employed, keep any contract signed, including non-solicit, non-compete agreements." - Amy Irvine

Resources:

This episode is brought to you by Rooted Planning Group. Rooted Planning Group is a fee-only financial planning firm that specializes in working with women in their 30s and 40s who want to take control of their finances and plan for the future. Whether you're just starting out or you're looking to make a big change, Rooted Planning Group can help.

Visit www.rootedpg.com to learn more.

Saving for College and Other Priorities: Insights from a Parent

As parents, we often find ourselves juggling multiple financial goals, from saving for our children's education to providing them with vehicles and ensuring our own long-term financial security. In this article, we will explore the insights and experiences of a parent who has successfully navigated these competing priorities.

In this episode, Becky Eason interviews Kerrie Beene, a parent who has successfully saved for her children's education while managing other financial priorities. Kerrie shares her experience of opening a 529 savings account for her children when they were young and consistently contributing to it over the years. She also discusses how she encouraged family members to contribute to the 529 as gifts for birthdays and holidays. Kerrie's daughter was able to graduate from college a year early, saving on tuition and room and board expenses. Kerrie also talks about how her children's different interests and circumstances have influenced their financial goals, such as saving for a vehicle. She emphasizes the importance of starting to save early and automating contributions to make it easier.

Key Takeaways

  • Starting early and automating savings can make a significant difference in achieving financial goals for your children.

  • Encouraging family members to contribute to a 529 plan can provide a boost to college savings.

  • Taking advantage of opportunities for dual enrollment and summer classes can help students graduate early and save on tuition.

  • Balancing the financial support for different children can be challenging, but it's important to consider each child's unique needs and circumstances.

Notable Quotes:

  • "If you can start saving money when they're young, just knowing who knows what your kid may like or what the future holds, you just never know." - Kerrie Beene

  • "Teaching your kids, if they do work, to maybe save a little and then from the parent perspective, saving what you can and automating it so you don't have to be thinking about it all the time." - Kerrie Beene

About the Guest(s):

  • Kerrie Beene is a parent of two children, one in college and one in high school. She has firsthand experience in saving for her children's education and managing competing financial priorities.

  • Becky Eason is a financial planner at Rooted Planning Group. With a background in finance and a passion for helping clients navigate their financial goals, Becky brings a wealth of knowledge and expertise to her role. She has experience working with clients at various stages of life, from early career professionals to those in retirement. Becky understands the challenges of balancing competing goals and priorities and is dedicated to helping her clients create a financial plan that aligns with their unique circumstances and aspirations.

RESOURCES:

Listen to the full episode to gain valuable insights on how to navigate competing goals and priorities in your financial journey. Stay tuned for more episodes of the Money Roots podcast for expert advice and guidance on personal finance.

Navigating Competing Goals and Priorities in Personal Finances

About the Guest(s):

Becky Eason is a financial planner at Rooted Planning Group. With a background in finance and a passion for helping clients navigate their financial goals, Becky brings a wealth of knowledge and expertise to her role. She has experience working with clients at various stages of life, from early career professionals to those in retirement. Becky understands the challenges of balancing competing goals and priorities and is dedicated to helping her clients create a financial plan that aligns with their unique circumstances and aspirations.

Episode Summary:

In this episode of the Money Roots podcast, Becky Eason, a financial planner at Rooted Planning Group, discusses the challenges of balancing competing goals and priorities, particularly for individuals in the early stages of their careers. Becky shares her personal experiences and provides practical advice on how to navigate financial decisions when faced with everyday expenses, short-term goals, and long-term goals. She emphasizes the importance of creating a budget, prioritizing goals, and openly communicating with partners about financial aspirations. Becky also highlights the significance of saving for retirement and offers insights on how to allocate resources effectively to achieve multiple goals simultaneously.

Key Takeaways:

  • Balancing competing goals and priorities is a common challenge faced by individuals at various stages of life, including early career professionals.

  • Creating a budget is essential to determine available cash flow and identify excess or shortfall of funds.

  • Short-term goals, such as travel or vehicle replacements, can be achieved by saving a little each month and prioritizing based on personal preferences and financial circumstances.

  • Long-term goals, like retirement or saving for children's education, should not be neglected, and it is advisable to save at least the amount of the employer match in retirement accounts.

  • Open communication with partners about financial goals is crucial to ensure alignment and avoid potential tension or misunderstandings.

Notable Quotes:

  • "Money is a very limited resource, so every day you have to make decisions on how you're going to spend it." - Becky Eason

  • "Saving for retirement is important, and at the very least, make sure you save the amount of your employer match." - Becky Eason

  • "Writing down your goals and regularly reviewing them helps you stay true to what you want for yourself and your family." - Becky Eason

Resources:

Listen to the full episode to gain valuable insights on how to navigate competing goals and priorities in your financial journey. Stay tuned for more episodes of the Money Roots podcast for expert advice and guidance on personal finance.

Navigating Competing Goals: Tips for Managing Finances in 2024

How to Manage Competing Goals: Insights from Rooted Planning Group

About the Guest(s):

Becky Eason is a long-term team member of Rooted Planning Group. With her extensive experience in financial planning, Becky has helped numerous clients navigate competing goals and make informed decisions about their finances. She specializes in providing guidance on interest rates, credit card debt, and finding ways to save money while achieving financial goals.

Episode Summary:

In this episode, Amy Irvine and Becky Eason discuss the challenges and successes clients are facing in the first quarter of 2024. They focus on the topic of competing goals, particularly in relation to interest rates and credit card debt. The conversation explores strategies for managing debt, prioritizing goals, and finding ways to save money. Becky shares her insights on topics such as health insurance options, meal planning, and shopping for bargains. Listeners will gain valuable tips and advice on how to navigate competing goals and make informed financial decisions.

Key Takeaways:

  • Managing credit card debt: It is important to have a handle on your cash flow and excess funds before making extra payments on credit cards. Without sufficient cash flow, paying down one credit card may result in another card's balance increasing.

  • Balancing debt and investments: When faced with high-interest credit card debt, it may be more beneficial to invest extra funds rather than paying down the debt. Comparing the potential returns on investments to the interest rates on debt can help inform this decision.

  • Emergency funds: It is crucial to maintain an emergency fund to avoid relying on credit cards in case of unexpected expenses. While paying down debt is important, depleting emergency funds can lead to further financial stress.

  • Health insurance options: Exploring different health insurance plans can help save money, especially when there are specific medical needs. Programs like Child Health Plus in New York State can provide better coverage and lower deductibles for children with specialized medical requirements.

  • Saving on groceries: Meal planning, shopping for bargains, and looking for buy-one-get-one deals can help save money on groceries. Being mindful of prices, opting for healthier options, and freezing bulk purchases can also contribute to savings.

Don't miss out on valuable insights and empowering financial advice! Subscribe to "Money Roots" today to embark on a journey of financial growth and empowerment. Join host Amy Irvine as she simplifies personal finance, making it accessible to everyone, from beginners to seasoned experts. By subscribing, you'll stay up-to-date with each episode, gaining access to practical tips, inspiring stories, and expert insights that will help you take control of your financial future. Whether you're looking to budget smarter, invest wisely, or secure your retirement, "Money Roots" has something for everyone. Subscribe now and start nurturing your financial well-being!

If you have any questions that you would like answered on the show, feel free to email us at info@rootedpg.com

Or visit us at www.rootedpg.com/podcasts for full show notes and links!

Prioritize and Focus

One of the first steps in managing competing goals is to prioritize and focus on one goal at a time. Becky suggests going through your list of goals and asking yourself, "If there's only one thing that I could achieve, what would that be?" By identifying your top priority, you can allocate your resources and energy towards that goal, making it more attainable. Once you've achieved that goal, you can move on to the next one.

Becky emphasizes the importance of setting realistic expectations and not putting too much pressure on yourself. It's easy to get overwhelmed when you have multiple goals competing for your attention. By breaking them down and focusing on one at a time, you can make steady progress and avoid feeling discouraged.

Saving on Expenses

One of the challenges many people face when managing competing goals is finding ways to save money. Rising grocery prices, for example, can put a strain on your budget. Becky suggests several strategies to help you save on expenses and free up more money for your goals.

Meal planning is a simple yet effective way to reduce waste and save money on groceries. By planning your meals in advance and using up items you already have, you can avoid unnecessary trips to the store and make the most of what you already have in your pantry. Additionally, Becky recommends looking for deals and discounts at stores like Aldi's and Save-A-Lot. By being mindful of prices and taking advantage of sales, you can stretch your grocery budget further.

Another area where you can potentially save money is health insurance. Becky shares her personal experience of comparing employer-sponsored plans with a New York state plan for her daughter. By carefully considering the coverage and costs, she was able to find a plan that offered better overall coverage and saved her money in the long run. It's important to explore different options and find the best fit for your specific needs.

You're Not Alone

Lastly, it's essential to remember that you're not alone in facing competing goals. It's easy to feel isolated or like you're the only one struggling to balance different priorities. However, many people are going through similar challenges. Talking to others and sharing your experiences can provide valuable insights and support.

Becky encourages individuals to reach out to their peers and have open conversations about their financial goals and challenges. By doing so, you may discover that others are facing similar situations and can offer advice or share strategies that have worked for them. Knowing that you're not alone can provide a sense of relief and motivation to keep pushing forward.

In conclusion, managing competing goals requires prioritization, resourcefulness, and a supportive community. By focusing on one goal at a time, finding ways to save on expenses, and seeking support from others, you can make progress towards your financial objectives. Remember, it's a journey, and setbacks are normal. Stay committed, stay flexible, and keep working towards your goals.

This episode is brought to you by Rooted Planning Group. Rooted Planning Group is a fee-only financial planning firm that specializes in working with women in their 30s and 40s who want to take control of their finances and plan for the future. Whether you're just starting out or you're looking to make a big change, Rooted Planning Group can help.

Visit www.rootedpg.com to learn more.

Under One Roof: A Guide to Multigenerational Living and Care

About the Guest(s):

Emily Graham is a co-author of the book "Under One Roof: Creating Harmony for Multigenerational Living." She has a decade of experience working in home health, palliative, and hospice care. Emily's expertise in the field, combined with her personal experience of caring for her family members, has shaped her understanding of the challenges and benefits of multigenerational living. She brings a unique perspective to the topic and offers practical advice for families considering this living arrangement.

Episode Summary:

In this episode of Money Roots, Amy Irvine interviews Emily Graham, co-author of the book "Under One Roof: Creating Harmony for Multigenerational Living." The book explores the concept of multigenerational living and provides guidance on how families can navigate the challenges and benefits of living together under one roof. Emily shares her personal experience of caring for her family members and discusses the importance of planning and communication in creating a harmonious living arrangement. The episode highlights the need for creative solutions to support aging parents and explores the idea of sharing wealth and resources within the family. Whether it's through remodeling, building separate living spaces, or considering alternative living arrangements, the book offers practical advice and real-life examples to help families make informed decisions about multigenerational living.

Key Takeaways:

  • Multigenerational living is not a new concept and has been practiced in many cultures around the world. It offers a way for families to support each other and share resources.

  • The book "Under One Roof" provides a comprehensive guide to multigenerational living, covering topics such as remodeling, creating separate living spaces, and navigating the challenges that may arise.

  • Separate kitchens and entrances are important considerations when planning for multigenerational living, as they allow for privacy and independence within the shared living space.

  • The book emphasizes the importance of open communication and setting clear expectations to avoid conflicts and ensure a harmonious living arrangement.

  • Multigenerational living can be a solution for families looking to prevent their aging parents from moving into nursing homes, but it also offers opportunities for wealth sharing and collaborative projects within the family.

Notable Quotes:

  • "Planning helps decrease a stressful crisis in someone's life, and that's what I want to impart in my career." - Emily Graham

  • "This is a return to how people have lived all around the world. Many cultures live this way." - Emily Graham

Resources:

Don't miss out on valuable insights and empowering financial advice! Subscribe to "Money Roots" today to embark on a journey of financial growth and empowerment. Join host Amy Irvine as she simplifies personal finance, making it accessible to everyone, from beginners to seasoned experts. By subscribing, you'll stay up-to-date with each episode, gaining access to practical tips, inspiring stories, and expert insights that will help you take control of your financial future. Whether you're looking to budget smarter, invest wisely, or secure your retirement, "Money Roots" has something for everyone. Subscribe now and start nurturing your financial well-being!

If you have any questions that you would like answered on the show, feel free to email us at info@rootedpg.com

Or visit us at www.rootedpg.com/podcasts for full show notes and links!

This episode is brought to you by Rooted Planning Group. Rooted Planning Group is a fee-only financial planning firm that specializes in working with women in their 30s and 40s who want to take control of their finances and plan for the future. Whether you're just starting out or you're looking to make a big change, Rooted Planning Group can help.

Visit www.rootedpg.com to learn more.

From Anxiety to Action: Transforming Your Money Conversations

Navigating Money and Relationships: Insights from a Licensed Clinical Social Worker

About the Guest(s):

Sheila Nissim is a licensed clinical social worker with extensive experience in psychotherapy. She works with individuals of all ages, helping them navigate various emotional and relational issues. Sheila has a particular interest in the intersection of money and relationships, and she helps clients explore their beliefs, anxieties, and experiences related to money. Through her work, she aims to empower individuals to develop a healthier and more positive relationship with money.

Episode Summary:

In this episode of Money Roots, host Kate Welker is joined by Sheila Nissim, a licensed clinical social worker, to discuss the complex relationship between money and relationships. They delve into the psychological aspects of money and how our upbringing and experiences shape our beliefs and behaviors around finances. The conversation highlights the importance of open communication, understanding each other's perspectives, and finding common ground when it comes to managing money as a couple. Sheila emphasizes the need for patience, compassion, and self-reflection in order to navigate the challenges that arise in money-related discussions.

Key Takeaways:

  • Money is a loaded topic that can evoke various emotions and anxieties in individuals. Understanding our own money stories and beliefs is crucial for developing a healthier relationship with money.

  • Each person in a relationship may have different experiences and perspectives when it comes to money. It is important to acknowledge and respect these differences, and engage in open and non-judgmental communication.

  • Combining finances in a relationship can be a significant step. Couples should have conversations about their expectations, fears, and goals related to money. Starting with small steps and gradually building trust and understanding can help navigate this process.

  • Autonomy and individual financial independence can coexist with shared finances. Couples can consider designating separate accounts for personal expenses while maintaining joint accounts for shared expenses.

  • Patience, compassion, and self-reflection are essential in money-related discussions. It is important to create a safe space for open dialogue, take breaks when needed, and approach the conversation with a willingness to understand and compromise.

Notable Quotes:

  • "Understanding what's so upsetting about money is important. It's not only about the money itself; it symbolizes deeper emotions and needs." - Sheila Nissim

  • "Having separate accounts doesn't mean hiding money; it can be about autonomy and individual needs within a shared financial framework." - Sheila Nissim

To listen to the full episode and gain valuable insights into navigating money and relationships, tune in to the Money Roots podcast. Stay tuned for more engaging discussions on personal finance and emotional well-being.

This episode is brought to you by Rooted Planning Group. Rooted Planning Group is a fee-only financial planning firm that specializes in working with women in their 30s and 40s who want to take control of their finances and plan for the future. Whether you're just starting out or you're looking to make a big change, Rooted Planning Group can help.

Visit www.rootedpg.com to learn more.

Teaching Children Money Skills: A Guide for Parents

In this episode, financial planner Kate Welker discusses the importance of teaching children about money and shares her own experiences and strategies for instilling good money management skills. She emphasizes the value of open communication about finances, introducing children to tangible money, allowing them to make reasonable mistakes, and gradually introducing them to digital payment systems. Kate also highlights the significance of savings accounts and the lessons they teach about budgeting and interest. Tune in for practical tips on raising financially responsible children.

As parents, one of the most important life skills we can teach our children is how to manage money. Money is not an intuitive skill, and it takes time and experience to develop good money management habits. In this episode, we will explore the importance of teaching children about money and share practical tips for instilling good money skills in them.

Key Takeaways

  • Teaching children about money is an essential life skill that will benefit them in the long run.

  • Start conversations about money from a young age to help children develop an understanding of its value and how it is used.

  • Use tangible money, such as coins and dollars, to help children grasp the concept of exchange and the value of money.

  • Allow children to make reasonable mistakes with money, as it helps them learn valuable lessons about budgeting and decision-making.

  • Introduce bank accounts and debit cards to older children to teach them about saving, spending, and managing their own finances.

Starting Conversations about Money

One of the best ways to teach children about money is to start conversations about it from a young age. Money is often seen as a taboo subject, but it is important to expose children to these conversations so they can develop an understanding of how money works and its role in their lives.

Growing up, I was fortunate to have parents who openly discussed money with me. They would talk about household expenses, such as the cost of repairs or groceries, and involve me in discussions about budgeting and financial decisions. These conversations helped me develop a sense of awareness about money and its value.

In my own family, I have continued this tradition by having conversations with my children about money. We discuss the cost of household expenses, such as internet or streaming services, and I explain to them why we make certain financial decisions. By involving them in these discussions, they gain a better understanding of how money is managed and the importance of making informed choices.

Using Tangible Money

In today's digital age, it is easy for children to lose touch with the concept of money as a tangible object. With the prevalence of credit cards and digital payment systems, children may not fully grasp the value of money and the exchange that takes place when making a purchase.

To help children understand the concept of exchange and the value of money, it is important to use tangible money, such as coins and dollars. When making purchases, let your children hand over the money and experience the transaction firsthand. This helps them develop a sense of responsibility and understand that money is exchanged for goods or services.

Additionally, encourage children to save their own money and see it grow over time. Opening a bank account for them and explaining the concept of interest can be a great way to teach them about saving and the benefits of long-term financial planning. Seeing their savings increase and setting goals for their money can be exciting and motivating for children.

Allowing Reasonable Mistakes

Making mistakes is a natural part of learning, and the same applies to money management. Allowing children to make reasonable mistakes with money can be a valuable learning experience for them. It teaches them about the consequences of their financial decisions and helps them develop better money management skills.

For example, if your child wants to buy a toy or a video game, let them make the purchase with their own money. If they later realize that they didn't really want or need the item, it can be a lesson in buyer's remorse and the importance of thoughtful spending. These small mistakes can help children understand the value of their money and make better decisions in the future.

It is important, however, to provide guidance and support to prevent children from making significant financial mistakes. As they get older and have more responsibility, such as a part-time job or an allowance, encourage them to budget their money and make informed choices. Teach them about the importance of saving, budgeting, and avoiding unnecessary debt.

Introducing Bank Accounts and Debit Cards

As children grow older and become more independent, it is important to introduce them to the world of banking and financial management. Opening a bank account for them and providing them with a debit card can be a great way to teach them about saving, spending, and managing their own finances.

Having a bank account allows children to see their money grow and understand the concept of interest. It also teaches them about the responsibilities that come with managing their own finances, such as tracking their balance, avoiding overdraft fees, and protecting their card and personal information.

Recently, I introduced my own children to the world of debit cards. While I initially had reservations about the convenience of digital payments, I realized that it is essential for them to learn how to manage their finances in a digital world. We discussed terms like deposits, transfers, and available balance, and they now have a better understanding of how to use their debit cards responsibly.

Conclusion

Teaching children about money is an important responsibility for parents. By starting conversations about money, using tangible money, allowing reasonable mistakes, and introducing bank accounts and debit cards, we can help our children develop essential money management skills.

Remember, every child is different, and it is important to tailor your approach to their individual needs and abilities. By instilling good money habits from a young age, we can set our children up for a lifetime of financial success.

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This episode is brought to you by Rooted Planning Group. Rooted Planning Group is a fee-only financial planning firm that specializes in working with women in their 30s and 40s who want to take control of their finances and plan for the future. Whether you're just starting out or you're looking to make a big change, Rooted Planning Group can help.

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