Teaching Your Kids What You Wish You Had Learned With Hannah Kesler

Transcript of Podcast Episode 348

Welcome to Security Mutual Life Insurance Company of New York’s SML Planning Minute, where we share concise and thought-provoking financial ideas for individuals, families, and business owners. Security Mutual, the company that cares.

Bill Rainaldi:

Hello, this is Bill Rainaldi with another edition of Security Mutual’s SML Planning Minute. In today’s episode, money lessons that stick, teaching your kids what you wish you had learned with special guest Hannah Kesler.

Hannah Kesler is a leading authority on the Infinite Banking Concept^® and the Money Multiplier Method^®. She travels the country showing people how to take control of their money, build wealth, keep the money in the family, and create a life full of freedom and happiness. She is also the host of the Money Multiplier Podcast. Hannah is also the author of the book The Companion, which is about teaching kids the important life lessons that any child or adult needs to hear. It is available on Amazon or Barnes and Noble, or at the website companionbook.com.

Hannah, welcome to the program.

Hannah Kesler:

Thank you, Bill. It’s a pleasure to be here. I’m even more excited to talk about my favorite topic, money!

Bill Rainaldi:

Sounds good. Hannah, what do you think people are doing wrong today about teaching their kids about money?

Hannah Kesler:

Yeah. I don’t think it’s anything that they’re doing wrong because, get this. Actually, there’s a statistic out there from Fidelity that shows 56% of Americans did not talk about money with their parents as a child, and 82% of them wish they had. So, I think it just goes back to generations and generations of when we as adults aren’t taught to talk about money around the kitchen table, we don’t know how to carry that legacy and that conversation into the next generation and our heirs in line.

Really, my biggest advice would be money is such an important part of life. It allows us to do everything that we want to do. It gives us the resources, and we just need to start making it a common subject and stop making it so taboo.

Bill Rainaldi:

Yeah. Well, financial education is certainly something that’s lacking with children. And that’s not something that’s new, that’s something that’s always been the case. I’m just wondering where you start? What age do you want to start talking to kids about money, and what are some of the basic concepts you want to make sure you get up front right away?

Hannah Kesler:

Yeah. I honestly think as soon as they can really talk and understand, that’s when we need to start bringing it around the kitchen table. My biggest advice, number one, is start early and integrate money into daily life.

As parents, we should be discussing how we earn it, where it goes, where we store the money, and how we decide to spend it. Then from there, I would even add encourage the savings and the budgeting. Give your children an allowance and tie it to chores. I remember growing up, my duty was the laundry and my brother’s duty was the dishes. And actually, every single week, we’d flip back and forth. I remember getting paid $7 a week from Mom and Dad until I had that conversation with my brother that I was like, “Hey, Zack, I hate doing the dishes.” He’s like, “Well, I hate doing the laundry.” I’m like, “Perfect! I’ll keep doing the laundry, you keep doing the dishes.”

Then we would just make our allowance money, and then we would actually go to Price Chopper, growing up in the Kansas City area, we had Price Choppers in town. We would actually spend our allowance money on, whether it’s the magazines or the toy aisle, mom and dad would take us there and that’s what we were allowed to spend it on because we had to earn it in order for us to spend it. We just weren’t just given the money.

Bill Rainaldi:

Well, I hope you were both paid the same amount at least.

Hannah Kesler:

Yeah, we were.

Bill Rainaldi:

Okay, good. Can you think of any mistakes that you or your parents might have made back then that, if you had to do it all over again, you might have changed today?

Hannah Kesler:

Yeah. I think one thing that I’ve really been thinking hard on, and I actually got this from a lot of my colleagues here at the Money Multiplier, is almost teaching like a three-cup system. We have three different cups. One of the cups is your “save” bucket. The second cup is your “spend” bucket. Then the third cup is your “give” bucket. Really, what I want to do is I want to direct 50% of what I make into my save bucket, 40% goes into my spending, and then 10% goes into my giving. So, then, I understand the importance of paying myself first, a.k.a. saving bucket, the 50%. Because let’s be real, they’re kids, they don’t got bills. They can save 50% of what they make, right?

But then, even the spending bucket. I heard this story one time where this gentleman has a young child and the child had a birthday party coming up for one of his kids. Most of the time, what parents will do is they’ll go out there and just buy a random toy for the child so that their kid can show up with a present to the birthday party. Where this gentleman, he doesn’t do that. He says, “All right. If you want to go and give your friend a gift for their birthday, you are going to use your own money and you’re going to purchase this yourself.” When he walks into the store with only $14 in his pocket and he wants to go buy these Pokemon cards, well, he’s not going to be able to buy the $50, $20 Pokemon cards. “All right, I’ll pick up a $10 one, and then four $1 ones.”

Then when he went to that birthday party and he showed it to his friend, he was so elated. It just made him so happy to know that, “Oh my gosh, I did this for my friend.” It’s also even teaching him the generosity that you need to learn. It’s just not given, you need to really care for the people out there as well. I honestly just think another big important lesson is really getting the kids involved in the decision making and let them participate in family decisions. Whether it is that birthday party, or the meal planning, grocery shopping, or even planning for that next family vacation. Get them involved in those decision makings.

Bill Rainaldi:

Wow. That’s quite a bit. I know most kids would have no idea about any of that stuff, so that’s really fantastic. At what point do you start talking to the kids about what they ought to do with the savings they have? Where they ought to put it, or should it be invested, or whatever?

Hannah Kesler:

Yeah. We do that very, very young. I would say right around the ages of six to eight is when we start talking about, “Okay, let’s take this money that’s sitting inside of our savings bucket,” whether you want to call it a piggy bank, a savings bucket, whatever. “Let me show you, my child, where I’m storing my money at.”

Bill, as you know, and folks listening to your podcast know, I have a firm belief that the best place to store your wealth is inside a whole life policy with a mutually-owned insurance company. When we’re having those conversations with the kids, they know that that policy is the family bank, or like the family piggy bank. Instead of just leaving it inside of my bucket here, I’m going to go and move it into my family bank. Around the ages of six to eight I would say is the prime time to really start doing it.

Bill Rainaldi:

Wow, that’s fantastic. You’re talking about a policy on the child, correct? Because I know that’s something we talked about before on this podcast, about children’s insurance, which is something that I think doesn’t really get the attention that it deserves.

Hannah Kesler:

No, no. Because even, Bill, myself coming from the world of having a 529 plan that my grandpa set up for me, this is why I just have such a strong passion for whole life insurance because it allows me to do whatever I want. I’m not limited to, all right, this specific college, or this specific use for the money. I’m able to go do anything and everything with the dollars that are inside of that policy.

So, I just really want to educate the community and the public out there that you really don’t know what you don’t know and just have an open mind when it comes to this because you don’t know what your child wants to do. You don’t know if they just want to not go to college, be an entrepreneur, a business owner, go to surf school or hairdressing school. You don’t want to limit them to what they want to do because, “Oh, I was storing money in this 529 or this other plan over here, and we can’t use the money for that because there’s limitations to it.” Don’t limit what you can do because of your pocketbook and where the money is being stored at.

Bill Rainaldi:

Yeah. I guess that at some point, when they’re deciding whether to go to college or not, and they might be more well-informed because, frankly, there are some kids who don’t need to go to college, who can do just fine without it. That’s an idea that hasn’t gotten a lot of interest in recent years, but it seems to be getting more attention now. I would think that giving your kid an opportunity to do this kind of work at a younger age gives them a chance to have an independent opinion about that sort of thing.

Hannah Kesler:

Yeah, it does. It does. I can know that firsthand being a part of the Gen Z generation, so I know.

Bill Rainaldi:

Well, that’s fantastic. I know one of the things you like to emphasize in your materials is financial independence. I’m just wondering, it seems like this type of approach, approaching a kid when they’re at a young age, helps lead them in that direction towards their future at some point, I would think. Would you agree with that?

Hannah Kesler:

It does, it does. Then, it also even allows them to focus on values and responsible spending. Because we need to understand the differences between a need and a want, and helping the children prioritize needs over wants. Because even for myself, being like I mentioned, a part of the Gen Z generation, chronically online with the social media, there is so many ads that will pop up and that instant gratification that we have. What I like to call the microwave mentality or the drive-through mentality.

Sometimes I’ll even have to take a step back and say, “Okay, do I really, really want this, or is this just a want right now, not necessarily a need?” What I actually do is I put things on the back burner and I wait about two to three days. If I’m still thinking about that item or the service that I was about to go purchase, okay, I know I want this. It wasn’t just an impulse buy or impulse decision that I have. I think really focusing on the values and being responsible with your monetary life, that’s going to carry them through their entire life. That lesson is just so invaluable.

Bill Rainaldi:

Boy, that’s fantastic. It seems like part of the issue here … Well, there’s two issues. First of all, I think social media has made that whole instant gratification thing more prominent. I’m wondering if you think there’s a time when it’s okay for kids to have social media accounts? If so, how does that affect what we’re talking about here, which is teaching kids good financial lessons?

Hannah Kesler:

Yeah. If I had to go back, now this is what I would personally do. I want my child, if they’re going to be walking to school like how I did when I was growing up, I remember actually having a flip phone growing up. I would beg Mom and Dad to allow me to have that iPhone, that smartphone. They would not get it for me until I was a freshman in high school, when I was 14-years-old walking into my high school year freshman year. I think it’s one of the best things that they ever did because then I was allowed to be present.

I think that’s a big thing too, just going on the topic of social media. When you are so online facing your phone all the time, you’re not enjoying the life that’s going on around you. You want to be present, make those decisions, and have the open communication and human connections that you can make. When you are just online all the time, it is an addiction. There are kids out there that they will fuss and fuss if they don’t have their iPad or their YouTube show playing in front of you. That’s just one thing that I don’t want my children to have. I’d rather go play outside, let’s go read some books together so that we can make more of our life instead of just being online.

Last thing I’ll say on that, Bill, because I actually was listening to a podcast where Miley Cyrus was on it. She was talking about how, if you think about social media almost like watching television. You know when you’re growing up and you’re sitting on the couch and you’re rotting, and if you watch too much TV, you’re almost the couch potato? Think about that with the social media. If you’re online all that time, you’re just rotting your brain and you’re almost being a couch potato for your phone. Then when put it into that perspective, you’re like, “Wow, I really don’t want to spend all these hours online on my cellphone.”

Bill Rainaldi:

Boy, that’s for sure. It’s a whole lot more complicated now than it was, for example, when I was growing up. Several decades before you were growing up, I might add. It’s not easy.

The second thing I wanted to address with you, Hannah, is I think some parents are just uncomfortable or unprepared to start talking to the kids about money. I’m just wondering if there’s any advice you might be able to give someone just to get the process started? Because I agree, that the earlier you start, the better. But how do you start when you’re not really comfortable doing so?

Hannah Kesler:

Yeah. Honestly, that too comes with their own personal mindset. Because I do agree, there are some people out there who think that they’re just not worthy to have money and that’s not the truth. You are worthy of everything that you really set your mind to and you can have anything that you want. That’s the beauty of us living here in America is that you can have literally anything that you want if you truly set your mind behind it, and put action behind those thoughts, and those words, and the goals.

For me, my biggest advice would really be just starting bringing it around the kitchen table. Talk about how are we financing or buying this family vacation. How am I going to take you to go see Mickey Mouse or Donald Duck this summer? When you start to just involve it in the normal conversations, it’s going to be a normality, if that’s even a word, to them.

Bill Rainaldi:

Right.

Hannah Kesler:

That would be my thing is just get it integrated into daily life and make it a part of everyday conversations. Encourage the questions and open communication. Engage the kids in the questions and the money conversations that are being had. Some suggestions could be like, “Well, what do you plan to spend your allowance money on?” Or, “How should we be saving up for this next family trip?” Kids are bright. They see a lot of stuff that’s going on. When you do really start to bring them into the conversations, even as adults, you’re like, “Wow, I didn’t even think about that one. That’s pretty good.”

Bill Rainaldi:

All right, you talked about starting early. You also mentioned that you got your first smartphone when you were 14 years old. I’m wondering about that transition, as young children become teenagers, and what type of adaptation you may need to make other than the smartphone when they get to a certain age?

Hannah Kesler:

Yeah. Well, too, and specifically there, I love that my parents waited until I was in high school to really do it because there is a big thing about struggling with comparison as you’re growing up and getting older, especially being online. One thing that’s so unique is we are so special in our own ways and there’s a reason that we were made so uniquely. My fingerprint is my only fingerprint. You got your own fingerprint, everybody else does, and that’s what makes us so unique. I truly think that when you are engaging the kids to really think for themselves and question everything, and that they know that they have a rock and support system behind them. That, “hey, even if you do fail, we’re going to be here and we’re going to help to support you back up, and we are going to allow you to be who you actually want to be instead of putting you in this box and these limitations.” I don’t know if that answers the question, but that’s truly what I would say.

Bill Rainaldi:

Well, I think that’s fantastic. As a follow-up to that, and this will be my last question, I’m just wondering if there’s any one particular money habit more than anything else that you want to make sure kids learn at a young age and carry into their adulthood?

Hannah Kesler:

Yeah. To me, it’s pay yourself first. I know we’ve all heard that before, but honestly do we really do it? Probably not. This is how we were taught as kids is any monies that we would produce, we would pay ourselves at least 10%. As children, when we didn’t have the bills or the expenses, it was 50%. But then when I went out and I started my first job working at the chiropractic office of where my dad had it in Kansas City, to then being a waitress at Cracker Barrel, I still was following that pay myself first tip. Where literally, any money that I would get from serving, because I would get paid cash every single night when we would cash out. That was the cool thing about Cracker Barrel, and I think really where I found my entrepreneurial spirit, because any tables that I worked, that was all my money. There was no tip sharing at Cracker Barrel, which I loved!

And so, what I would literally do is I’d go home that night and I would count up my bills, I’d see how much I made, and then I would take that 10% and I would literally put it into a shoebox. Yeah, don’t do that now, okay, there’s better ways to save that money. Don’t put it into a shoebox. But then, I would really take that and save it over there. That should be the first line item when you are looking at your cashflow and you’re budgeting underneath your expenses, that first line under the expenses should always be pay myself first. Then go to the down line of the rent, the mortgage, the car bill, the phone bill, the electricity, the food bill, et cetera, et cetera. Because at the end of the day, you got to treat yourself as your number one asset. You are your number one asset when it comes to your life. Why are you neglecting you being that number one asset?

Bill Rainaldi:

Fantastic. I think there’s so much to learn from that. I would just add, and this is my own personal observation as I’ve emphasized over and over again on this show when the opportunity comes up, is the concept of compounding. If you can start getting money put away as early as possible, when you’re talking about 20, 30, 40 years down the road, people are shocked by how much that adds up to just by starting early. You’re so much better off starting with whatever you can start out with as early as possible, than you are waiting until your 40s or 50s to start saving. It makes a huge difference in people’s lives.

Hannah Kesler:

It does. It’s almost like, Bill, to that point, it’s almost like saying, “Hey, when was the best time to have your child?” There is no best time! It’s just going to happen. You got to do the same thing with your money and your financial life. Just start. I always say the wealth train is going to keep on moving down the tracks. It’s your responsibility to be at the station, show up, and hop on. If not, that’s okay, but the train is going to keep moving on.

Bill Rainaldi:

Yeah, fantastic. Well, this has been so good, Hannah. I can’t thank you enough. I spoke briefly about your book and of course, you have a substantial internet presence. I’m just wondering if there are other resources about yourself that you might want to move people towards as we end this show?

Hannah Kesler:

Absolutely. Yeah, specifically for how to talk to your kids about money, The Companion, you can find it on Amazon. I do have my own podcast show called The Money Multiplier Podcast. It’s on all podcasting platforms and YouTube. You can even learn more about me and my book, The Single Millionaire Chick, going to hannahkesler.com. Hannah is spelled the same ways forwards and backwards, and Kesler with one S, hannahkesler.com.

Bill Rainaldi:

Fantastic. Well, this has been great. Hannah, thank you so much for joining us today.

Hannah Kesler:

Thank you, Bill, for having me.

Bill Rainaldi:

Bye-bye.

This podcast is brought to you by Security Mutual Life Insurance Company of New York, The Company That Cares^®. The content provided is intended for educational and informational purposes only. Information is provided in good faith. However, the company makes no representation or warranty of any kind regarding the accuracy, reliability, or completeness of the information. 

The information presented is designed to provide general information regarding the subject matter covered. It is not to serve at legal, tax or other financial advice related to individual situations, because each person’s legal, tax and financial situation is different. Specific advice needs to be tailored to your situation. Therefore, please consult with your own attorney, tax professional and/or other advisors regarding your specific situation.

To help reach your goals, you need a skilled professional by your side. Contact your local Security Mutual life insurance advisor today. As part of the planning process, he or she will coordinate with your other advisors as needed to help you achieve your financial goals and objectives. For more information, visit us at SMLNY.com/SMLPodcast. If you’ve enjoyed this podcast, tell your friends about it. And be sure to give us a five-star review. And check us out on LinkedIn, YouTube and X (formally Twitter). Thanks for listening, and we’ll talk to you next time.

Tax laws are complex and subject to change. The information presented is based on current interpretation of the laws. Neither Security Mutual nor its agents are permitted to provide tax or legal advice.

The applicability of any strategy discussed is dependent upon the particular facts and circumstances. Results may vary, and products and services discussed may not be  appropriate for all situations. Each person’s needs, objectives and financial circumstances are different, and must be reviewed and analyzed independently. We encourage individuals to seek personalized advice from a qualified Security Mutual life insurance advisor regarding their personal needs, objectives, and financial circumstances. Insurance products are issued by Security Mutual Life Insurance Company of New York, Binghamton, New York. Product availability and features may vary by state.