How do you raise financially capable kids without putting your own future at risk? In this episode, we walk through practical ways to teach money habits at every stage, from young kids to adult children, while keeping your retirement and financial goals on track.
Episode Transcript
Intro/Closing: 00:03
Welcome to the Real Talk Retirement Show, where we explore the financial side of retirement and beyond. Whether you’re currently retired or planning for the future, we offer real, relatable conversations about money and personal finances. Most importantly, we dive into all these topics using Real Talk. Now, let’s get real about your money and your retirement.
Brian Graff: 00:28
Welcome everyone to another episode of the Real Talk Retirement Show. We are Brian Graff and Tracy Burke from Conrad Siegel with you as always. And this month, Tracy, we have an important topic to discuss, as we usually do. This month, we are going to talk about how to raise financially capable children without perhaps sacrificing our own financial futures. And as we dive into this, you know, it’s not always about simply dollars and cents, though. It’s really more about developing good financial habits early in life and how we can help children, you know, whether kids of our own or perhaps our grandchildren to have financial success later in life. So, Tracy, this feels like the perfect time for you to tell us one of your stories to get the conversation kick-started.
Tracy Burke: 01:16
Are you are you up for it? I think I might be. So this story is about Emily. Um, so when Emily was six years old, her grandmother gave her two glass jars. One of those was labeled spending, and the other was labeled grow. Uh, so anytime that Emily received money, whether that was, you know, cash for the birthday, money for doing chores around the house, uh, random $5 bill that she found on the street from or you know, given to uh to her by grandpa, she had to split it between those those jars and make some decisions. So at first those decisions were pretty simple. The spin jar meant, well, she could get candy and toys, right? Uh, and then the growth jar, you know, meant uh probably not something too exciting, right? But over time, something really powerful happened in this story about Emily. And she started watching that grow jar fill up. And she started to understand maybe about how waiting and that delayed gratification sometimes gave her options, and waiting gave her choices to make, right? So, fast forward 20 years later, Emily graduated college, debt-free, had an emergency fund put into place, uh, had even money for a down payment or first home, all before she turned 28. Nice. Go, Emily, right? Yeah. So now to be clear, that didn’t come through saving into that jar, right? Uh, with all those things. Some of those are pretty big ticket items. So saving for college, emergency fund, and even a home down payment. That didn’t come through saving in the jar, but the money habits that she learned early on that led to her making better decisions about money.
Brian Graff: 03:00
Yeah, all about all about habits. So thanks, Tracy, for that. And you know, in today’s episode, we’re really going to try and break it down into different age groups. So we’ll start with focusing on on younger kids like like Emily, then we’ll move into that uh teenage age range and and young adults and end up with some thoughts for those that are perhaps in the sandwich generation, those that have children of their own, but may also be helping their own parents during their later years in life. And you know, this topic, as a warning, as many do can stir emotions and really perhaps you’ll hear some things that ring true within your own family situation.
Brian Graff: 03:38
So let’s start with talking about younger children. So, you know, financial education with kids uh between the ages of let’s say five and twelve years old uh doesn’t usually start with investing apps or you know, stock market conversations. It really starts with with visibility. Kids need to see money, kids need to touch money, they need to feel it in their hands. Now, if you’re a germaphobe like me, make sure to keep that bottle of Purel near the piggy bank. Uh, but but anyway, back to my point. Um, you know, that’s why physical systems, those jars or envelopes you talked about earlier, Tracy, are so powerful early on. Uh now in today’s digital world and with the disappearance of physical currency, this can be more difficult than ever.
Tracy Burke: 04:23
Yeah. And and and relating this, you know, we talked about Emily and the two-jar approach. Um, something that I think we’ve we’ve spent a little time on talking in previous podcasts, or we do certainly in our every uh sword day lives, is we talk about the three bucket concept. Um, and again, we’ve used this um, you know, with talking with with clients, but I’ve I’ve also used this with the the my three kids as they’ve grown up. And it’s a variation of that story of Emily with the spend and grow jars. Uh, but when my kids receive money for chores, we required them to use three three buckets, uh a spend and a save, which is really the two that we talked about with Emily. But then the third one is a giving, uh, sort of a giving bucket, so to speak. Now, these weren’t physical jars, you know, um at that point. But when kids divide money up this way, I think, you know, can teach them three lifelong principles. Um, one of those being that money is is not uh you know finite, right? It’s not um, you know, uh it’s it does, you know, it does run out at some point, so it’s not everlasting. So um, you know, there is only a certain amount that can end up in those areas. Uh the second point I think it can sort of talk is that you shouldn’t be spending all of it. Now, this is tough. Um, you know, I have a 14-year-old son who the money he makes um, you know, by by doing a couple things here and there at home, and he also umpires little league baseball. He wants he’s he wants to spend that money before you know he makes it. But you know, it that that’s of of course, you know, spending it um is is you you just can’t spend all of it. And then the the third component at sort of the third uh bucket, so to speak, that we we added to the conversation, that giving bucket, you know, you can use money to to do good and to help others, right? So I you know, I think the other thing with with younger kids, it’s important to let them make mistakes as well, right? Uh if they blow all their money on something silly and then regret it later later, maybe that’s okay, right? Um, that maybe that lesson, maybe it’ll cost them 12 bucks at age eight, but could cost them $12,000 at age 28 if they didn’t sort of learn some of those lessons.
Brian Graff: 06:45
Absolutely. Yeah. So those allowances can definitely be helpful, especially if tied to like real life responsibilities for your kids. And not because kids are simply paid to exist, uh, but because they’re learning how to contribute in life and to be accountable to really important life skills. Uh, another key practice with this younger age group is to talk through everyday purchases with them. So, for example, when you’re at the grocery store, if you’re lucky enough to get them to come with you, um, you know, explain why you’re choosing one item over another. Uh, or when you pay a utility bill, like the water bill, for example, uh, show it to them and explain that those, you know, 20-minute showers they’re taking, uh, those aren’t free, right? So make it uh mean something to them and really work with them on those different um issues. And you know, as kids do get a little older, and you know, for the the tech savvy families, there are a few platforms like Greenlight or Busy Kid uh that can introduce budgeting tools with some parental oversight. Uh, but remember, really try not to rely solely on those tools to teach those values. Make sure that you’re guiding your children and perhaps your grandchildren along the way and really have those meaningful conversations with them. That’ll go a long way.
Tracy Burke: 08:03
Yeah, and and those resources you just mentioned, Brian, are good. And another quick resource is that I like is a book called The Opposite of Spoiled by by a gentleman named Ron Lieber. And some folks I know watch this on the YouTube uh video and I’m holding it up right now. Uh obviously, if you’re listening through the podcast version, you’re not seeing it. But The Opposite Spoiled by Ron Lieber. Uh just a great book that has framework with money conversations with with family members, in particular children. So um, as you indicated, we’re going to talk through different stages of life. So let’s move on to the next stage here.
Tracy Burke: 08:38
Uh, teenagers, and then you know, eventually we’ll get to, you know, that uh obviously morph into early adulthood and young adults there. But certainly as teen as kids grow into teenagers, our roles as parents or grandparents uh can certainly shift. Um, you know, I would maybe say that if we label those earlier years that we’re talking through as maybe trying to manage them and being a manager, uh, but as we get into the teen years or and early adulthood, maybe we move from that manager concept to more of a coach concept. And and you know, could probably argue that the stakes get higher at that age, but so does the opportunity. Um, so before you know these kids are out there getting their first credit card, uh, it’s important to explain well, what what does that mean? And what are those credit scores? Um, I know working through that, you know, sometimes that bit of plastic just seems like, well, it’s free money or whatever it is. And of course we know that it’s not. So having those conversations. Um, when they get to that point where they have their first job, when they get to first pay stuff, that that’s you know, uh can be a gratifying experience as a as a parent to you know, sit there and sort of walk them through. And and when they say, Well, I thought I was getting paid this, but why at the you know, why is my take home so different? So you walk through what’s gross pay versus net pay, what the tax components are. Uh, you know, it’s like I said, it’s always shocking that 17-year-old realizing that first paycheck is certainly smaller than than expected, but a good lesson to learn, and and as sort of indicated, better to learn that at age 17 than than later in life.
Brian Graff: 10:19
For sure.
Tracy Burke: 10:20
And then um, you know, for those with teens that that that are working, um, you know, you could consider that saving component, the saving mentality we talked a little bit about, helping them open maybe it’s a Roth IRA, just to start that habit of saving. And it doesn’t have to be a big dollar amount, but even putting a little bit into, say, a Roth IRA, and you need to have earned income to do that. But if if they have a job and it’s 16 or 17, they can put a little bit into there. It shows and you know, it allows them to um, you know, have that ability for those contributions to dramatically grow those decades and what compounding interest can do over a longer period of time. So that visual of seeing that that happen, I think, uh can really help with some of those behaviors.
Brian Graff: 11:08
Oh, yeah. And Tracy, uh 100% true story, my son, who is age 19 and a freshman in college, actually sent me a text message a few months ago asking me if I would help him open a Roth IRA. Wow. And what yeah, what a proud, proud dad moment that was. You know, it’s right up there with right up there with the first little league home run. I don’t know which one made me prouder, but that Roth is is right up there for sure. Uh, so that was that was very cool.
Brian Graff: 11:33
And speaking of college, you know, saving for college obviously is very important, but it must come with some perspective. Um, you know, vehicles like 529 plans offer tax advantages and flexibility, and resources like savingforcollege.com can really help families compare the different options that are available. Uh, but here is what you need to remember. Uh, I think this is one of the more important lines uh that we’re gonna go through in this podcast. And that is that your child can borrow for college, however, you cannot borrow for retirement. Okay, so just try and keep that in mind. You know, we’ve seen way too many parents drain retirement accounts or pause their contributions along the way or take on additional debt just to fund their children’s education, um, only to later become financially dependent on their children. So that’s not generosity and and more importantly, not really a smart financial move.
Tracy Burke: 12:34
Yeah, and let’s talk about that a little bit uh more here, Brian. You know, we’ve heard parents say sort of like what you said, uh, or things like, I just don’t want my kids to struggle like I did, right? We always want that next generation to have it better off. And then they provide them with an overabundance of things. And while that’s noble and you know can be considered loving, and uh, but again, just keep in mind it sometimes helping them today means that either you or maybe perhaps they as well can struggle later. Uh, and that that’s not always the most prudent. Um so being an old guy like you and I are the these days, Brian, uh, you know, I recently saw an article by AARP um that highlighted the issue that parents of underfunding retirement while they’re still financially supporting some of their adult children. Um and um so what what a what this this article from AARP sort of suggested was was really four things. First, contribute enough to retirement to capture your employer matches, right? We talk about that a lot. So your workplace retirement account, whatever that employer match, making sure you’re at least doing that at a at a bare minimum. Uh build that solid emergency fund. I’ve talked about that before. Pay down any high interest debt. You know, there’s good debt, there’s bad debt, we’ve talked through some of that today. So try to pay off and down that high interest debt and then um you know help children beyond the basics if you know if you’re able to do all those things and have that desire to help it. So uh yeah, I thought that article was had some good points uh that AARP put out there.
Brian Graff: 14:12
For sure. And you know, those are items that we frequently talk about with investors. Uh, you know, if retirement contributions pause for even just five years in your 40s, for example, the long-term compounding loss can really be significant. And, you know, trust me, I get it. I mentioned I have a son in college. Well, I also have a daughter in college and another daughter that just graduated from college. So I’m living it and I’m I’m feeling it. And it really is tough to balance helping your children financially with also taking care of yourself. So we’re all really just doing the best that we can.
Brian Graff: 14:45
Uh so let’s shift now to talking a little bit more about helping adult children. So we realize that not everyone uh may be in a position to help adult children with certain items, but for those that are, a few things to keep in mind. Uh, number one, you know, definitely be intentional and strategic about this and track it properly. Uh so if you gift your adult children or even adult grandchildren, keep in mind that you’re able to gift up to $19,000. This is in 2026 per person per year, uh, double that to $38,000 per year for married couples without additional reporting. Okay. And if you’re able to help your adult children to save for your grandchildren’s college expenses, $529 college savings plans to save for your grandchildren’s college might be a prudent way to go. Usually it’s the best way to go in those situations. Okay. And also keep in mind that you could pay tuition directly to the school or pay larger medical expenses directly to the healthcare facility if you want to help in that way.
Tracy Burke: 15:49
Yeah. And again, this isn’t for everybody or not everybody’s in that situation to do it, but for the folks that sometimes that are asking about those, those are all uh very good points there, Brian’s and Brian. And you know, at times we hear questions then about well, should I help buy you know a car or a home purchase, you know, for my young adult child? If we sort of break down those two uh components first, uh, you know, the the cars. Uh so if you do want to help with a car purchase, maybe one concept to consider is sort of like a matching program. Instead of paying for it fully and say, hey, here’s your here’s the car, uh, maybe have them have some skin to game, right? So that that if they put in X number of thousand of dollars, that you’ll match that contribution. Uh also have clarity about who’s paying for insurance, right? That that could be uh the you know the car insurance, that’s important. Uh something that is really important is is really to avoid co-signing loans. Um some people do that both with cars and and especially with homes. Uh, unless it’s absolutely necessary, co-signing a loan, uh, a lease, you know, for especially cars really can open up you to some liability and some other uh other problems that that’s out there. So a couple thoughts on cars, but then for homes, um, of course, you know, the home sometimes can be construed as a great investment uh over the long term, but those down payments can be very, very challenging for you know folks early in adulthood, of course. And getting help from parents or even grandparents can certainly be a huge help there. But similar to car loans, co-signing mortgage is usually a very, very bad idea uh because what it can do is it can expose your credit score. Um, you know, if if the you know your child or grandchild isn’t paying things back, it can really hurt your credit score. Um and it can also expose you to liability as well, in case something goes wrong. Um, so important consideration there. Uh so before helping, you know, I think you know, ask yourself if you know this is accelerating your child’s financial independence, or maybe it’s delaying it, if if we’re honest with ourselves at points. Uh and sometimes the that you know the loving answer is guidance and not you know handing over money, right? So um, you know, ideally if there are those gifts that that we’re helping um you know those those children with it hopefully empowers them in some way and creates some independence, not that expectation, of course, of future help. Uh so transparency being direct is is also a uh a big part of it.
Brian Graff: 18:37
Yeah, thanks, Tracy. So I think for our final segment of today’s podcast, we’re gonna go over uh having family conversations about money and about all the topics we covered in the the first portion of the podcast. And we we realize that conversations about money are often not very easy. In fact, we just had a uh very recent episode discussing this with Carl Richards, the author of the book Your Money, if you want to go back and listen. It is episode number 15 of our podcast series and was released in March 2026. But you know, whether you’re an adult child with aging parents, or if you are the aging parent, there are some important steps to take, and these conversations are really, really important. So, first talking to uh parents with adult children. Remember, it is really important to loop them into your financial plan at some point, and sooner is better than later. So that way they have full awareness as they may need to eventually help ensure your estate plan and legacy wishes are fulfilled someday. So we got to keep them in the loop and talk to them about your financial plan. How do you expect to spend your retirement and what lifestyle adjustments might you need to make? Do you plan to downsize or relocate? Do you want to spend more time with the grandkids? Again, all important topics. And then really let them know about your estate plan, what you intend to leave behind, whether we’re talking about financial accounts, property, or personal valuables, you know, don’t have it be a surprise, which can often and easily lead to conflicts among surviving family members. Uh, there are no hard and fast rules about what and how much you need to share. Uh, you can use percentages instead of, you know, rough and you know, use rough ballparks instead of real numbers if you’re more comfortable with that.
Tracy Burke: 20:27
Yeah. And besides communicating some more tangible items, also, you know, communicate what your goals and values are, right? And some some people might seem that touchy-feely type of thing and and might uh uh sort of work away from that. It’s just not about the numbers and about assets, right? It’s also about what’s important to you and what you hope to accomplish uh really the rest of your your time. Um and because some people might want to fund future education, you know, generations for educational efforts or charitable inclinations, all those types of things. So passing along some of those that information on your values is important. So uh some of that could include long-term care plans. This goes in a little bit what you were just mentioning, Brian. But uh, do you have insurance, you know, long-term care insurance or funds set aside uh to do it? Where do you prefer to age? You know, do you prefer to stay at home as long as possible? Um, you know, the state document roles, you know, this is something else that’s super critical to share with that next generation at the right time. You know, who are playing the certain roles within your state documents, who’s the executrix, you know, if there’s any trustees or whatever that might be. Because that’s, you know, by clear communications, it’s it eliminates confusion and makes sure it’s clear of who’s serving that role. And again, you know, it can help just create that clarity during your lifetime. Um, the other thing is where these important documents are kept. Um, you know, that does the estate planning attorney have copies? Um I I might have shared this before, even on this podcast. I know my mom’s important documents are kept in a deep freezer right next to that frozen corn that’s that’s out there. So I know where to go when something happens in her situation.
Brian Graff: 22:11
I love that, Tracy. Yeah. And all these topics are super important, but it’s also really important to be smart about how you have these conversations with your family members. So consider this you know, when will you have the conversation? We would recommend that you avoid holidays or other major family events. Um, set an agenda and decide in advance what you will and what you won’t share. And be clear about the purpose of the conversation with your loved ones going in. So everybody has that same perspective. Uh, and acknowledge right up front that there can be emotions on the subject and encourage, encourage questions and sharing from your family members. I believe Carl Richard in his recent episode mentioned have a timeout rule too. So don’t be afraid to put a pause on the conversation if it becomes too uncomfortable for one of your family members. Uh, none of this is easy. We we realize that, but it is necessary. Uh, those financial conversations can be difficult. And if you need additional resources or guidance, you know, please reach out to our team and we will be happy to help you with that. So, as
Brian Graff: 23:15
always, Tracy, let’s end off with some action item from today’s episode, if you want to kick us off there.
Tracy Burke: 23:21
Yeah. So so when when working, you know, or thinking and teaching younger children about money, understanding, need to just to see and experience what it all means. That was that was a big takeaway I know uh I had here today. Uh, and and consider that three-bucket approach that we talked about, the save, spend, and and give. Uh, finding opportunities to explain how you use your money in life and make good decisions, right? And as we progress into the teenager area, you know, that transitions from the coaching stage uh and give them some breathing room to learn on their own, right? Uh, you know, help them by explaining some of these concepts that them might they might experience for the first time. Help them to save on their own uh, you know, for that first time and be open about how you and they will pay for college and navigating all those. And of course, when you know your children get into the you know becoming young adults, how’s the best way that you can support them uh if they need it and if you’re also able to do it and and remember it’s okay if you can’t? Um, but you’re balancing your own financial future with helping to um you know uh get your your children off on that financial uh rate steps. And then finally, further down the pike, um, you know, either in retirement or those you know, with aging parents, just those healthy conversations you were just talking about, you know, about their situation. So there’s no surprises. And that all the family members can support each other throughout that stage and and they they feel good about um you know what’s what’s out there happening. So not always easy conversations, but again, Brian, important ones.
Brian Graff: 24:57
Yeah, definitely not always easy, but remember, we are here to help. So please continue to reach out to us with questions or comments. Our email address is podcast at conradsiegel.com. And remember, if you’re if you’re liking this this series, we hope you are. Please share the episodes with friends, family, coworkers, and give us a five-star review if you’re so inclined, and definitely subscribe if you haven’t already. Uh, Tracy, great conversation. Thanks so much, everyone, for joining and for staying with us uh on our journey to and through retirement. So we’ll see everyone next time on the Real Talk Retirement Show.
Intro/Closing: 25:34
Thank you for tuning into today’s show. The Real Talk Retirement Show is created and produced by Conrad Siegel, an advisory firm that specializes in helping people prepare for retirement and beyond. If you want to learn more about our work or meet the team, you can visit ConradSegal.com. Information on this show is for educational purposes only and should not be considered personalized investment, tax, or legal advice. Before making decisions, you should consult with the appropriate professionals for advice that is specific to your situation.