Marilyn Wechter: Setting Your Children Up for Success (EP.07)

Welcome to Take the Long View with Matt Hall. I'm going to start calling you all who are listening my Long View partners because that's what you are. You're partners in this mission to take a bigger, broader view. And as you know, this is a podcast to help reframe the way you think about your money, emotions, behavior, and time. The goal? Helping you live richly. We're going to talk with the best thought leaders we know to learn from their meaningful experiences, and we're going to bury the vegetables of world-class thinking in stories and conversation, helping you put the odds of long-term success on your side. Marilyn, it's so great to have you back. Remember episode 1 of Take the Long View with Matt Hall? I spoke with my friend and the person I call Mr. Miyagi, even though she's still not familiar with that movie and how important Mr. Miyagi is in the life of people around my age. You are the Miyagi, at least of one part of my life, and I think you're gonna help our listeners with an aspect of their lives and their parenting, or just helping other people who are important in their lives who are young and impressionable. Let me tell you just real quickly that with over 35 years of experience as a financial therapist and wealth counselor, Marilyn knows a thing or two about how human beings relate to money and what an emotionally driven topic that can be. She saw early on that while money is not often discussed in our society, it plays a big role in how we view ourselves, and thus made it her mission to focus her practice on the psychological relationship between wealth and wellbeing. Marilyn, there's so much I could say about you, but let's get to it. We have a lot to talk about. I think this idea of money and children is one of those topics that will really get people's attention or listeners' attention, 'cause there's a lot of uncertainty about what to do, what to talk about, how to do it, and really, what are we trying to raise?

You know, it's a great question because I think when we think about raising children and how much time and effort goes into it. I don't think it's that we're trying to raise children. We're trying to raise them to be competent, healthy, autonomous adults. And I think all too often best intentions cripple rather than enable. So I think when we talk about what we're trying to do, and especially when we're talking about money, to think about the ways we use money with our kids and we use material benchposts as a way of determining love, success, self-worth, that it's really time to rethink that or at least put it on the table so that people become conscious of what they're doing as opposed to just doing things that sometimes have enormously bad consequences without being aware of it. Because anytime we're talking about kids, everybody wants to do the best for them, but inadvertently sometimes we do the opposite.

Exactly, inadvertently. So let's talk about how we can get intentional. I think we've established, and several people on the show have talked about how they don't like to talk about money. In fact, I heard— I was listening to a podcast recently and a very successful couple couple was asked, you know, how has money changed your life? And they sort of avoided the topic. And the interviewer, who's a very professional person, kind of came back with a different angle. But again, they didn't really answer the question. And finally, the interviewer said, ah, we're in Minnesota, and I know no one here likes to talk about money. And this is 2019 that this is being said. And I can think too also back to one of my last guests who said every time his parents talked about money, he was asked to leave the room. So we've established that people don't love to talk about money. Do you think part of it could be that they're not sure what they're gonna say?

Yeah, I think one, people aren't sure what they're gonna say. I think that, as we've talked about before, there's so much contradiction and so much ambivalence about what money means. So back to, we're not sure what to talk about. How many of your listeners have sat down and really thought about what money means to them? You can't talk about something unless you know its meaning to you. And so when you think about your own values about money, when you think about how you use money, when you think about where money fits in the hierarchy of things that are important about you, unless you're clear on that, what can you convey or communicate to your kids? I think the other thing that's worth saying is that we may think that we're not talking about money and therefore our kids don't know, but to be aware that your kids watch everything you do. So whether you're talking about it or not, they're learning attitudes about money, but silently. You know how kids will hear you say a curse word? You know, they're paying attention to everything you say, even if you're not aware of it. So when we talk about talking with kids about money, don't think that you're not conveying messages to them about money by not talking about it. You are, but it's in the negative rather than the positive.

You know, I can remember there were two times you didn't talk to my dad. One was after he lost in tennis, and the other was when he was paying taxes.

Mm.

And it's funny because every time I write a check to the IRS, I think about that. I think about how those two times, like playing tennis and paying taxes, were like, uh, tense times. I can remember also, on the pleasant side, I can remember my dad always saying, "When we take a vacation, we don't worry about money." Don't worry about how much it costs. Just enjoy yourself. And these things, whether sort of unintentional lessons or not, they're things that I've hung on to.

Absolutely so.

And I repeat those stories even to this day at 45 years of age.

But hopefully you do something different with Harper when you pay taxes.

Mm-hmm.

So in other words, it is a great teaching moment. Rather than stay away from Dad when he's doing taxes, to begin to talk about what taxes are. What we do, where our money goes, how it is used, how it's used by the government, how it's used in your income. So if we take these paying bills, if we take these opportunities where we're involved with money and then think about those as a way to teach our kids about money, to give them a lesson in understanding, you can reset that. I don't know about the tennis.

Yeah. Yeah, there's one more I just thought of. When I was in high school, my dad suggested I get a job as a laborer on some residential construction company. And I always think about this now, but you know when there's a gutter or a drain that comes from your house that has to get out to the street and in a new subdivision, someone has to dig the drainage route where the water runs out to the street. I was that digger.

Hmm.

And for a whole summer, I dug a hole from a brand new home to the street. And I was paid every day. And it made me realize, and I think this was my dad's intent, the value of hard manual labor work. And it really inspired me to be a better student and to plan and think about my future. Not that I wasn't a good student before, but it created a respect and seriousness around what my future would be like if that were my every day. And I don't know that I understood it at the time, but man, it was a great lesson for me.

But hopefully another part of that lesson was how much work it takes to make things happen and to earn a living. That for most of us, things are not just given to us, but that it takes effort. And it also takes a sense of pride in having done that. It may not have been your favorite job, but I would hope you came out of that summer with a sense of solidity about your own ability to do something and make it happen.

Yes, I can dig a hole if you ever need a hole dug. I'm your guy. Not really, not really.

But see that confidence? It started with the ditch digging.

Right, right, yes. Okay, so I am a fan of a few personal finance columnists, and I like a guy who writes for the New York Times named Ron Lieber. He wrote a book several years back called "The Opposite of Spoiled." And while I can't say that I read the book, I love the title because I feel like it's what so many successful families I talk to want. They want success and abundance and affluence for themselves, but they don't want to create a spoiled child.

It's a great book, and I would recommend it to your listeners because he— Ron Lieber is a personal finance columnist for the New York Times, and what he talks about in the book, and I think what he's trying to get to, again, is this idea that we can't pretend that not talking and not preparing our kids puts them in good shape. That the only way that we can have our kids turn into competent adults, and again, the idea that we're not raising kids, we're trying to raise them to be competent adults, is to help them learn what self-worth really is about, to help them learn what the value of money is and what it isn't, and to get out of their way. There's a new term that's being used. You know, we used to talk about helicopter parents who would hover above and fix things. Now the term is snowplow parents, where parents come and clear every obstacle out of the way. And so if you think about spoiled, what you're talking about is kids who haven't had the opportunity to figure out how to solve problems on their own, haven't had the opportunity to figure out how to get something that they really want other than passively being given to. So I think what he's talking about, and I think lots of us in this field are trying to talk about, how do we raise kids so that they have a sense of worth that's real, not confuse self-worth with net worth, that they have a sense of their own ability to make things happen, and that they have some idea of what money can do and what money can't do and how to use it, how to use it wisely, how to understand the difference between needs and wants. You know, the idea that needs are to be fulfilled, wants are to be understood. And so when we talk about spoiled, there are 4 things that we see over and over, and that is kids who are spoiled have few chores or responsibilities, not many rules to govern their behavior or schedules, parents and others lavish them with time and assistance, and they have a lot of material possessions.

Now, could you say those one more time? Because one of the bits of feedback I get about the podcast is people love takeaways. I'm highlighting for them these takeaways 'cause I think those are great. So one more time.

Okay. So the four primary things that— spoiled kids have in common: few chores or responsibilities, not many rules to govern behavior or schedules, parents and others lavish them with time and assistance, and a plethora of material possessions. So if you think about that and you think about how that interferes with development of autonomy and the internalization of rule-setting and organization, you can see how it gets in the way. And again, when you think about what are the traits we want, we want to kind of nurture curiosity, patience, thrift, generosity, perseverance, modesty, and perspective. When we're talking about money, the idea for ourselves, but also for our children, is that financial status can be fluid, but financial values should not be. So, you know, by that, we never know what our circumstances are going to be. But how we understand money and how we understand what we want to do with money or the things that we value, that should be a given and a constant. That should not be determined by how rich or poor we are. If my value is that I'm only as happy as my least happy neighbor, I'm going to value philanthropic endeavor, whether I have $5 to give or if I have a million dollars to give.

Okay, can you say those traits one more time?

Curiosity, patience, thrift, generosity, perseverance, modesty, and perspective.

Yeah, you know, it's interesting is let's say we all agree that we want to help create an autonomous, strong little person who becomes a big person and who embraces those traits and feels fulfilled. It's almost like we need a curriculum for each one. My wife, Lisa, we sit down and we say we want to create or help teach patience, and it's particularly patience around money.

Mm-hmm.

I mean, obviously this podcast is called Take the Long View, and my whole firm is about taking a bigger, broader perspective. I love the idea of talking about patience, but teaching it is a whole nother thing.

Not so hard. Think about the latest bling that Harper may want. If you have the means and you say, "Sure, I'll buy it for you," that's immediate gratification. If you say, "Well, how much does it cost? How can I help you plan to buy it?" That teaches delay of gratification. It teaches patience, and it teaches working towards a goal. That's an example. I think there are many ways we can help our kids, especially patience with money. Learn that having their needs gratified immediately is not necessarily the most exciting. It may feel that way, but if you think about other areas of your life, buildup is really important. So that if you think about taking a family vacation, one option is involve kids in thinking about where do we wanna go. You told me a story about a trip and your daughter's reaction to that trip that was really incredible because it is a statement of looking at something in larger perspective that's not simply about the gratification of a certain place, but rather putting the idea of gratification in the context of something larger. And we rob our kids the opportunity of feeling that things are special when we make them commonplace and we make them there for the taking rather than for the striving.

I think this is an area where technology probably hurts us. In the old days, if I said, "Hey, I wanna buy that new whiz-bang gadget," we have to get in the car and we have to go somewhere. Today, I could grab your phone and buy it on Amazon and have it within 24 hours.

Assuming you have my credit card.

Yeah. I mean, I think that's part of what's happening now is Jimmy— we don't know Jimmy. He's just a fictional example here. But little Jimmy says, "I wanna buy something," and picks up the phone, finds it on Amazon, and can just buy things quickly.

Right.

I think we're moving so fast fast and can process our wants so quickly. I mean, I've even bought things that I don't— I didn't need at all, and I don't want the thing, but it was there in front of me. I got excited for a minute, and the next thing you know, it's at my house in a box.

Well, one thing I would say to Jimmy's parents is that unless they could come up with a way of rectifying Jimmy's use of the credit card without permission, you can return things to Amazon. My point in there is not to be harsh, but rather, that's not insurmountable. So what I'm asking parents to think about are their reactions to those things. It's the same way you think of any infraction. That one of the things, as we're so busy and running in so many directions, that lots of families substitute things for time. So, "If this makes you feel good, Jimmy, keep it," or, "I can't do this with you, but you can buy that." And I think for parents to recognize that no amount of money makes up for the time that you spend with your kids, and that has to do with teaching the value of things. So you're absolutely right. We live in a culture that demands immediate gratification, but part of that is because we've lost the ability as a culture to tolerate frustration. And then when you can't tolerate frustration, you don't have real growth. Because everything has to be surface and everything has to be geared towards the lowest denominator.

Okay, well, let's maybe go to a few practical things. We've been talking about the outlook or the frame or sort of a model for thinking about money and kids. Let's do a few practical questions. So one of the questions I wanted to ask you is credit cards and kids. What do you think about a kid going to college or a teenager? Should a parent give a kid a credit card?

Yeah, what I like to— I'm gonna back up even more because I'm a big believer in allowances because it's a great way for kids to learn budgeting. But what I often suggest is senior year of high school is time to give a kid a debit card where you can control the amount of money they have on the card, but they have to start to learn budgeting. And then you have to not bail them out when they spend all their money before the month is up. So it requires kind of discipline on your part. But I like debit cards rather than credit cards because you can set a limit. And when there's no money left that month, there's no money left. But I think kids have to learn how to use these things. And I think the best way to do that is when you're still around. I've seen kids go off to college, not only did they not know how to do their laundry, but they don't know how to pay any bills. Senior year in high school is a time to start that. So think about debit cards rather than credit cards.

What about the difference between chores, where someone is expected to be a good team member, family member, and help out at home, versus an allowance where they're getting money? I sometimes struggle with this idea that like, there's some basic things you're supposed to do just as a family member. I'm not gonna give you any money for that. What's your thought about the difference between an allowance and family chores or family participation in running the home?

I think that all families can easily set out, "This is what we expect of you as a citizen of our home. Make your bed, put your dishes in the sink, take out the garbage, walk the dog," you know, whatever it is in your family, "and you get an allowance. If you want to earn extra money, here are chores that you can do that can give you a way to have money towards that iPad that you want." or to that Lego set that you want. So that allowances are, you're part of our family, and as part of our family, everybody does certain things to keep our family functioning. But then if you wanna earn extra money, I'm happy to give you a list of things that you can do to get to your goal of what it is you want that I'm not gonna pay for.

Okay, Marilyn. So one of the things I think, I think about sometimes is this idea of not lecturing. So you get— you spend some time thinking about what money means to you. You think about what your values are as a family and what you want to communicate. But then I think there's a risk that it can become this sort of monologue rather than a conversation.

And I think that that's what you want to avoid because nobody wants to be lectured. You know, so one thing also is to think about when your kids say, "Are we rich?" rather than saying yes or no or we don't talk about that. To say, "Well, what does it mean to you? What does being rich mean to you? What do you think of when you think of being rich?" You know, kind of a Socratic method in terms of turning the conversation back so that you begin to help your child identify, "Well, what does that word mean? What does it really mean to be rich? Are we rich in experience? Is that what I mean by being rich?" But, again, if you think about questions that your kids might ask rather than being scared about them or figuring out, "How do I volley it back quick off my side of the court?" is to engage engage in discussions so that you're bringing them into the discussion. You're not lecturing, but you're allowing them to explore what are their answers to that so that I think it becomes a way to also encourage them to think and it increases their sense of ease with these concepts.

At what age do you think people start to create a realistic context for themselves, like understanding— if a high school student said, "Hey, Mom and Dad, are we as rich as the Joneses?" Did they understand, you think, in junior high, high school? I haven't surveyed that age group, but do they understand what sort of a realistic salary looks like or what a mortgage looks like?

I would hope by high school they do, but kids as early as preschool begin to understand hierarchies and pecking orders, and they watch what kind of cars you drive. They watch where you live. They watch where you go to school. They watch what kind of vacations you have. One of the reasons I think it's so useful to talk numbers is, you know, the idea of 2 kids in a family and one says, "We've got $5 million. We're rich." And the other says, "We have $5 million. We're comfortable." So perspective becomes really useful, and if you can't talk about it, you don't know where it fits. So kids watch where they fit in the hierarchy. And without specific information, nobody knows what it means. So one way to help your kids is to codify that, to talk about— you know, again, it's a little bit like sex education. You gear your responses to the maturity level of your child. You're not gonna say the same thing to a 5-year-old about sex as you are to a 15-year-old. You're not gonna say the same thing to a 5-year-old about money as you are to a 15-year-old, but you are gonna say something to the 5-year-old because it's really doing our kids a disservice if we think that they don't notice this because they notice every part of it. So I tend to believe, and I know that there are people who are really uncomfortable with this, but that you talk numbers and that as kids get older, especially high school kids who are looking at colleges, for instance, you want your kid to understand how much it costs to go to college. In real numbers. And you want them to understand that this is something our family values. Therefore, even though this is a lot of money, it is one of our values, so it's something we'll pay for. So it gives a value context as well as a numbers context so that any conversation about money should have a concomitant discussion about value. And that you don't want to decontextualize those two. Monies should have value. And you have the opportunity to talk about what those values are.

So if a family can pay for their child's college and they do a good job of saying, hey, we value this, so we're going to help pay for it, do you think there should be any participation?

Yes, I am. And I'm jumping on you there because I feel really strongly about it. I love— the idea of skin in the game. So that one of the things that I often advise families to do is, any money you earn over the summer, I match, and that's your spending money. So in other words, I will reward your hard work. And so if you save this amount of money and you don't blow it on ice cream or movies, you'll have X, and then you know that I'm gonna double that. I'm gonna give you X. Otherwise, I think it's way too easy for kids to just be passive, and I don't think that that helps them. So I say the same thing about cars. Kid turns 16, if you're in a position to give your kid a car, that's great. Have them have some skin in the game. Have them research what cars cost. Have them research what does insurance cost. You know, maybe you give them one tank of gas a week, but then if they go through that But it's on their dime. So if they wanna drive their friends all around and it goes more than a tank of gas, they have to pay for it. And then they have to decide, is it worth spending their money or is it just okay if it's your money? Have some skin in the game because if everything is given to you, you don't have to strive for anything. And again, as parents, whether it's about money or anything, what you wanna do is reward striving. Mm-hmm.

Yeah, I think that gets to this chronic worry I hear from people that says, "I want to be successful, but I don't want my success to dilute or ruin the hunger that my little person should have." Right.

And I would argue that your success is not what dilutes your child's hunger. It's how you frame that success and how you help your child learn to create something for themselves. So it's not your success that's the problem. It's how you frame it.

But it sounds like for people who maybe are listening and thinking, I haven't done a lot of this and my kid is—

40.

Yeah, 40. Is it too late?

It's never too late. You know, as long as we are still thinking and talking, it's never too late. I think there's more remediation that has to be done the older a kid gets. And I love to start working with families when kids are young because I think there's so much you can do. There's only so much you can shape, but it's never too late. You'll have pushback. So in other words, if you have given your kid everything and never asked for anything in return, and then all of a sudden you're changing it, your kid's not gonna be really happy, but that's okay. Our job as parents is not to have our kids be happy with us all the time. Our job as parents is to help teach our kids the lessons that they need to know to be successful adults.

Okay. So why don't you hit us with a few final takeaways for our listeners?

Okay. So safeguard the development of their ambition. Foster their resilience and self-control. Don't let them equate self-worth with net worth. Give them your love, your guidance, your time. Remember that there's nothing that you can purchase that will make up for your absence in their lives. And give them the tools and the desire to manage money and learn about money. And finally, remember that you need to model the values you want to see in them.

Oh, Marilyn, thank you so much. I love the list. Let me go over it just real quickly. I counted 7 items. Number 1, safeguard the development of your child's ambition. 2, foster and create resilience. 3, think self-worth, not net worth. 4, focus on giving love, guidance, and time. 5, remember there's nothing you can buy that will make up for your absence in their lives. 6, try to give them both the desire and tools around money. And 7, model the values you want to see in them. I think so much of what's here and so much of being a parent is about taking a longer view. We've got to live in the here and now, but we've got to think about some of these bigger picture items as we raise successful young people. Thank you, Marilyn, for your time. Thanks to the listeners for all of the feedback and support. We've had a great amount of downloads and subscriptions and reviews. And I think if you like the episodes so far, far, wait till you hear what we've got coming. I'll be traveling to meet with some great guests and can't wait to bring you more in this first season of Take the Long View with Matt Hall. Who taught you your first lessons about money? Please note the information shared in this podcast is not intended as advice. The intent is to share meaningful experiences. I am likely not your advisor, nor wealth manager, nor financial planner, and my opinions are my own and not necessarily shared by Hill Investment Group. Investing involves risk. Consult a professional before implementing an investment strategy. Thank you.