How to Raise Financially Smart Kids with Darla Bishop | College Planning Without Debt

Parents, is your teen college ready? Are you feeling overwhelmed, stressed out, or excited about your teen applying to college? Do you know what colleges are looking for? And if your kid gets in, do you know what you'll pay for it? College admission has never been so competitive or expensive. Shellee Howard will take you on a journey to help you and your teen get college ready. Now here's your host, Shellee.

Well, hello again, parents. This is Shellee Howard, the founder and CEO of CollegeReady. And today I have a special guest I can't wait to share with you. Miss Darla Bishop, welcome to the show.

So it's doctor actually, and that matters because one of the reasons I wanted to come and talk with you is I spent 8 years in graduate school in one of the most expensive schools in the country, in one of the most expensive cities in the US, and I was able to leave with no debt. And I want other students who are trying to get to and through college to be able to do so with as little debt as possible, maybe even making the school pay you to go there.

I love that. Now you're speaking my language. So thank you for that, Dr. Darla. And so listeners, this is important. I talk about it all the time. It is possible. And here's a guest who can't wait to share another resource. And so as we go to start the conversation, I like to always ask Dr. Darla, Are you doing what you thought you would be doing when you were a teenager?

No, I'm having way more fun than what I imagined. So as a teenager, I thought I would be a medical doctor, because when you're a kid, you don't really have a big menu. When the grown-ups ask you, well, what do you want to be when you grow up? Sometimes you're like, doctor, lawyer, nurse. Maybe someone has read a book and so they say marine biologist or something like that, but you don't really have a big idea of what you'll be when you grow up, because you don't realize there's so many ways to be, right? And so I thought I'd be a medical doctor, but organic chemistry got in my way. I think maybe it was sophomore year of college, but I got introduced to public health. And so I actually ended up getting all my degrees in— after undergrad— in public health. And it has been fantastic to work and contribute to the health and well-being of communities and the country and the world. And I bring a lot of that stuff to my work around money. Because it turns out that when you are financially well, it's way easier to be all the other types of well.

Sure, absolutely. And I love to start with that because many parents are so concerned that their child doesn't know exactly what they want to do. And I often will say that's part of the process. Back in the day, you could go undecided, undeclared, and now that is getting more rare. By the moment. And so when we think about preparing for college, why I wanted you on the show is the financial literacy piece. So let's start from a very young age. Let's just say elementary school, and we'll work our way up to college. So for families who are maybe thinking, isn't that too young? I started it with my kids at that age. Tell me about that. Is that too young for students?

No. So you might not even realize it, that kids form their core money habits by age 7. So by the time your 7-year-old is asking if you can stop for ice cream on the way back from practice, or, well, could we get this thing, or could I have more Roblox? They already have an idea in their mind about how money works, how you get it, and what you use it for. And so having those conversations with just a little bit of intention from when they're little makes a huge difference in how they understand money and how they treat it. And how they think about it.

So good. So I was sharing with the listeners last week that students can start applying for college scholarships in 4th grade, and I had listeners who were just mind-blown, right? And now we're saying, wait a minute, it's even starting sooner. They're 7 years old. And this is so important because when I talk to students that— and I ask them, what do you want to do? What are you thinking? What's your major? They have no financial literacy because they're, I don't know, I don't know how much I need to make. I don't know any of that. So when should a family start preparing for the college financial talk?

So part of it is you're actually having these conversations. You just haven't coded them or even thought about them as college money talks. But every time you ask them, well, what do you think you want to do when you grow up? That is a way to say, well, in order to do that means you'll need to go to this kind of college. You might need to go to graduate school. You might need to have to have a special certificate, right? And so helping them to just understand what it will take for them to be that thing, and then it might be several years of school or just a few, and that has a money and a time consequence, right? And so, so if you're going to be in school, for instance, you want to be a lawyer for 4+3, so that means 7 years. So you'll be starting your first job at 25, right? And whereas some of your classmates will be starting their first job at 18 and some of them will be starting at 22. And so that just means your life will look different for those first few years because you spent a little bit more time in school. But by the time you guys are 30, 35, it'll all catch up, right? And so having those type of conversations too, so that you can almost prepare them for what I'm seeing in so much young people now is that, like, I'm behind. It's like, no, you're not behind. You just had to take a different path. And honestly, by the time we turn 40, it all evens out. So just, just give yourself some time.

So good. Ah, so inspirational, right? Time is so important, but having a plan and a strategy is such an important piece of that. When I talk to families, I talk about, are you looking for an academic fit, a social fit, a financial fit? Well, yes, I would like them all. So let's talk about the financial fit of college. I know you did it uniquely. Maybe you can talk about what you learned through your strategy that has helped you to help others? Yes.

And so when I went to graduate school, but any student at any level can use these strategies, is I really prioritize being a working student. So someone who worked first and went to school on the side. And so this is also for the people who don't want to be traditional students, thinking about where you work, right? Because the, your employment and even parents, your employer might have some fantastic benefits that allow you to get tuition discounts. Discounts, tuition prepayments, scholarships that you might not even realize. And so make sure that every year, especially when you get closer to those college-age years, that you're looking at your benefits to see if there's anything that you could use to offset the cost of your child's tuition. The other thing is, what types of jobs do you do while you're in school? So I knew someone— I actually ended up marrying this person— who, when he wanted to go to graduate school but was worried about the cost, and so he became a resident advisor, the person in the dormitories who's the older student, the person who points you to resources, make sure you're doing what you're supposed to do and behaving right. But what that meant is that he lived for free in one of the best spots on campus for 2 years and had a meal plan, right? So he didn't have to really spend a lot of money on food. And so that really took his overall cost of going to school down a ton. He just had to figure out the summer semester, and by then people are gone and they'll let you rent your bedroom for whatever they can get because they got to pay the rent., right? And so just thinking about there's more than just the tuition. There's also books, there's also computers, there's also room and board. What are ways that you can reduce the cost of those other items that are part of going to college that add up?

So I often tell students, think about college is not just going to a building, right? You're going to eat out, you're going to go to football games or basketball games. You're going to want some of the swag to wear. And so if you're not thinking about— and travel to and from home. So if money and scholarships are critical for your family, have a plan. Don't just wait until you get there. That creates debt, and that's what we're trying to keep you out of. So let's talk a little bit about how a parent feels about all of this. Right, so I know you're a parent. I'm a parent of 4, and we have to make choices when you are teaching your kids to be financially literate, financially savvy. What are some things that parents can do right now to help support them?

That every time your kid asks for something— I want to join a sport, I want to go on this trip, I want to go out with my friends— that use that as an opportunity to say, we can do that, and doing that means that we either delay this other thing, or we're choosing between them so that you're showing them at every turn, but not in a malicious way, right? Not in a, we don't have money for that. Not in a, we can't afford that. Money doesn't grow on trees. Not in that way, but just to get them in the practice of weighing this versus that, or now versus later, so that they get that practice. Because then when you're having the conversation about social fit versus financial fit, right? When it's college time, it was like, oh, well, if you choose this school, that means you're giving these things up. And if you choose this school, that means you're giving those things up. Which are more important to you right now? But because you've been helping them practice that, which is more important to you right now, or which might make your path easier for the last 5 or 10 years, it'll be a much smoother conversation. Right.

But what if you haven't done that? What if you're a parent who's been like, oh gosh, that would be great if I could do it over again. No, I just didn't want them to have to worry about money. I wanted them to have a better life than I had. What do you do? What do you do for that parent?

You ask a bunch of questions because what you want to know is what does your kid know? How do they feel about money? And so some of the things you might ask, and you know, best place for these conversations is on a car ride, especially if your kids like sitting next to you, because there's this really great thing about being in a car. You're close to each other, so there's an intimacy, but you're not facing each other. So even if a little conflict comes up, it's easier to work work through it. And then the physical motion of driving forward does something, I think, to drive the conversation forward. So these are great car conversations, right? And so it's like, hey, I was wondering, what do you know about— do you have a bank account? You're thinking about what kind of bank account you might need before you go to college. What do you know about bank accounts? And let your kid talk and just see what they know and fill in gaps after you let them talk a bit. Same thing with We're thinking about these other things. What do you know about that? What are your friends talking about? What things are you seeing online? Just because sometimes as parents we think we are the expert and we might be, but they may have a ton of expertise because maybe they've been personally interested in this topic. So they've been watching videos and on YouTube and talking to their friends. The other piece that is super helpful is to also ask them if you're in one of those conversations, I have— this is the most random question, but it tells you so much. If you had to introduce money to— as a person, how would you personify it? If you're taking money out for the first time with a group of friends, he's like, oh, this is my— this is money. How would you introduce money? Is money your friend? Is money your enemy? Does money take you nice places? Does money cause problems? Does money always show up too late?

How—

what is money to you? Because that gives you a frame on how to have these conversations based on how they think money works in their life.

So good. Yes, I love that. We play a millionaire game that gets the same point of that. What about if a child doesn't really want to talk about it?

Yeah, you know what? And that happens, right? So you got to find another trusted adult. It could be an older sibling, it could be a cousin, it could be a teacher, a guidance counselor, someone who they'll talk to. You can feed that person, hey, I've been trying to talk with them about money and they just don't want to do it. So has it come up in your conversations? If not, could it start? Because I just wanna know what they know so that when they are on their own to a certain extent at college, if there's something I can do to help them prepare, to help them feel good about it, that I can do that before they move out.

So good. I remember taking my firstborn to Harvard and there was One Bank right in Cambridge. They had the market. It was crazy. And I took him in there and I said, oh, tell him what you want. He looks at me and he goes, what do you mean? Why are we here? We're at a bank. It was, "You got into Harvard, help me out here." And he's like, "Oh, I see. You want me to transfer my money from my home bank account to this bank account, open one here for access." That's exactly what we want. And it was interesting because he was really concerned about the interest rate. He was really like, things I never even knew that he had thought about. And so on the flip side, you may be surprised that your child actually is quite fascinated with money and they want to learn about why does some bank accounts give you interest? Why do some bank accounts not? And so what is an age-appropriate timeline, if you will, to help parents navigate that?

And so one of the things is there's always an age and stage appropriate way to do it. So with our series, Piggy Bank Pathways, that actually starts at age 4 for pre-K. So for the 4 and 5-year-olds, we talk about the basics of what money is, saving, sharing, spending, because spending is fine. We're not mad about spending money. That's why we have it. And then as they get older, then we start talking about those tradeoffs so that they have some practice in comparison. Right. And then planning. So if I know that I want to buy this thing that costs $10 and I get a dollar per week, how many weeks will I need to save up my money in order to buy that thing? Right. So getting that. And then as they get into the late elementary, early middle school, we start talking about what would it be like to start a business? You've probably already started a business. Have you ever had a lemonade stand? Have you ever sold those little bracelets or candy at school? What was that? How much money did you need to get your supplies? Who gave gave you the money? Who was your investor? Did you pay them back, or was it— did it turn into a gift, right? So getting them into all the different ways that money comes into their lives. And then once they're in middle school, because they're doing really good mathematics, that's when you can introduce the stock market and interest rates. And it can be a fun game, or you could even be like, look, Grandma and Grandpa gave you $100, see what you can do with it.

Now, what about things like the stock market and crypto and high-yield accounts, that next level. Is that something that you go into, and at what age would that be appropriate?

If the kids are interested, right? If you're asking your child, hey, we want to start a savings account so that by the time you go to wherever, you have some money put aside so that you can buy your first car, or buy those books, or buy the season football tickets, whatever the big or small goal is, is Then you ask them, well, do you care what kind of savings accounts we use? Oh, I heard people talking about this one. Oh, well, that kind of savings account is— or this is an awesome opportunity to connect with your kid where you show them they are teaching you something where you say, high yield savings account. We don't have one of those. I don't know anything about it. Tell me all about it. And then I'm also going to look it up because that sounds really interesting. I've never heard of it. Right. And how cool for a young person to be talking to their mom or their dad and to be like, wow, I taught my mom or dad something and they were totally open to me. And they even followed my advice. Imagine what kind of relationship building you've done for once they are away at college when you have moments like that.

Sure. When we talk about right now, we're getting acceptance letters, um, except, well, acceptance via the internet. And it's the fun, most enjoyable time of the year. I had a meeting last night for all of the, uh, college-ready seniors talking about what's next. Now you've gotten in, now what's next? And we started on the budget path. How much money should I send or have my student have access to? How do you address that with a family?

And so you think about the summertime before they're going off to college. You could say, we're going to practice your college budget. We want to see how you do on this much per month. So this month you're responsible for buying your snacks, you're responsible for getting yourself to and from work and then tracking how much that costs. And you can even do some of that in high school, especially if they're working or driving themselves to sports or activities. And it's one of those things where we're talking about money all the time. And so it's not so much about when to bring it up, but when the opportunity presents itself, that you've already given a little thought about how you'll have the conversation so the conversation can be had, and that you really approach it with curiosity with your child instead of you need to, you should. Because they may also have a completely different money personality. I know that the money personality I have is polar opposite to the money personality my mom has. So when my mom gives me money advice, I have to do the opposite because her advice works totally good for her brain, but it doesn't work for my brain. The good news is though, parents, I need you to hear— listen to me now and believe me later— there are a million ways to get it right. So if it turns out that your order is A, B, C, D, but your kids brain tells them, well, I got to do it DCBA, it can all work out.

So good. So having these conversations is part of that learning process. Students are not going to get this in high school. So parents, if you're hoping that somebody else is going to teach it, I just want to let you know all 4 of my kids got none of this in high school.

Well, that's changing. We are now up to 34 states that require financial literacy education by the time people graduate. Now it's half a semester, so it's not everything, but it is something. 34 states.

That's fantastic news. I, I really have been on that bandwagon for quite some time because I think it's unfair. I think some of the things that are just so practical that we need to have were not being addressed. So thank you for sharing that. That's wonderful news. So when you are preparing your child for college and you're having these money talks, and I've heard this said many different ways, so I'm going to share it in this way. I've heard parents say, let's just see what happens. We're going to let our child apply to college and let's just see what happens. That's the approach they're going to take. And then I've had families who are like, we've been saving since the day they were born. And then we have some in between that are like, we don't make enough but we make too much, and that's super frustrating. So can you give some words of encouragement or support to those different kinds of parenting styles?

And so one of the things, the best gifts you can give to yourself and to your child is to truly understand where you are, not to feel bad about where you aren't, but to know where you are. So if you are in fact the family that's like, look, we didn't— we were just making it, and we are so proud that college is part of your plan. And so we're going to have to walk this journey together and figure it out together, right? And being really clear about that and what your situation— what you can afford, where you'll need to get help, and where the resources might exist to bridge that gap for you. For the parents who've been saving since they got married, before they even had the kids, we put in my name and change it to the kid's name when the kid arrives, right? Because I know some parents like that too, is like being mindful about letting them— hey, we have really worked very hard to prepare an easy pathway for you. So your job is to be a good steward of our hard work. And so you still have to take applying seriously. You still have to take making a choice thoughtfully because we worked really hard to make it easy for you because we wanted it to be easy for you. And we're so happy for it to be easy to you. But you still got to learn those lessons that we learned the hard way. You just got to learn them academically instead of the fighting through the process. This. And the folks who are somewhere in the middle, again, the most important thing to know is just where you are, what you do have, what you're willing to do, what you're able to do, and communicating that clearly and with love. Because then you can make a plan based on the reality, not based on where you wish you were.

So good. I, I've talked to retirement specialists before, and they have the same problem. If we wait until we're 70 to start thinking of this, retirement's not going to come very easily. So having a plan and a discussion, and it just could start with, this is what we can do, or this is what we would like to do. I have some parents who could do it, but they want their child to have a little skin in the game, right? They want to make him feel like, this is your money. My dad did it very uniquely. He said, if you were to to college, you need GPA, you need this, and when you maintain this, you can count on me. If you choose not to do that, I love you a lot and I wish you the best. So when you're thinking, Dr. Darla, how is the best way to send our students with love and encouragement and also helping them understand that money does not grow on trees?

And it's finding the way that feels good for you and to always leave them someone else to talk to, right? Because maybe your way of being just doesn't work for their brain, right? I tried to give that example a little bit earlier where you give the lesson, you're like, I don't think that lesson's sticking. So making sure they know, well, look, if you don't want to listen to me, you can't listen to me. If my way doesn't feel good or you don't get it, here's a bank. Here's a website, here's an office, here's a person so that your questions that you have, you can get good answers from a good source. I don't— hopefully I'm not talking out of turn, but we can do the same thing with sex, right? We learn about money in a lot of the same ways we learn about sex, where our parents tell us a few really important things that they want us to know, a few really important things, but they leave the rest open, right? But the parents who have the most success in all areas is like, hey, here's what I know, here's what I feel like it was important for me to tell you, but in case you have other questions or other things that you're thinking about that I'm not thinking about, here are some safe and trusted and reliable places you can go to get those questions answered. And if you find something there and you're confused about it, I'd love to talk with you about it, right? Leaving that door open.

We actually have it at College Ready. We have a financial literacy program, and I started it when my fourth was going through this process because she wanted to to school in Europe. And I kept thinking, well, I'd love to travel in Europe, but is she really going to go to school? And so we started having the money conversation because it would— the distance made it important for us to have that conversation on safety and everything else. And so sitting down and making it a partnership where they feel supported made all the difference for her, and she was more more frugal than the other 3 because we were able to quantify, this is what our plan is. If you need more than this, you can do work-study, you can get a part-time job, there's other ways you can supplement, or you can live off of this. So when students that are listening to this are thinking, well, that 'think my parents should pay for all of this.' How do you help them understand that we're doing financial literacy and helping them understand for their own benefit?

Well, part of it is most people, when they move away to college, don't typically imagine moving right back into their parents' when they leave. And so you can tap into that. Look, this might be the last time we ever live together. And so if you are on your own because maybe you find a person to marry you decide to stay in Europe, you decide to move to a completely different part of the country or world, I just don't want you to be unprepared. I don't want to be worried that we didn't talk about something that we could have easily prepared you for. And so you think I should handle this, and I respect that, and I'm not going to do it, right? You can be firm and loving and be like, here's what I can do, here's what I'm willing to do. But really, when it comes down to it, you as a young person, you are the only one who gets who has to live your life. And so you gotta figure this stuff out, and I want to help you through that process, but you got to figure it out.

So good. So I know you've written some books. Maybe can you tell our listeners a little bit about why you wrote the books?

Yes. And so we have a few out. So How to Afford Everything is my guide for people who are starting out or starting over with money. And I wrote this book because I read more than 100 books about money and career to try to feel like I understood it and decided it shouldn't take you that many. It took me way too many years and tears, so maybe I can save some. And then I wrote How to Afford College. It's an ebook, a quick ebook with the 7 strategies I use to get through graduate school with no debt. Because I started telling that story and people were like, what do you mean you went to school for 8 years at that really expensive university and you didn't leave with any debt? And I'm like, what do you mean you left with debt? Because I taught my sister how to do it, I taught my brother how to do it, I taught my husband how to do it. And so Well, this is learnable stuff. Here, here's how you do it. And I was like, oh, people don't know. I didn't realize that people didn't know because everyone around me knew, because either I told them or they told me, and we all used each other's strategies to get through school with as little debt as possible. And then our children's work, Madeline's Money Adventure, actually started because my 6-year-old said, Mommy, I want to write a book. And I said, well, it has to be about money. Do you know anything about money? She said, I know lots of things about money. And I said, well, what do we teach kids? And she said, well, other kids need to know that when you want something, you got to first check your piggy bank, and then if you don't have enough for the thing you want, you got to go do jobs so you can go buy the thing you want and you can have it. And I was like, well, that's an excellent lesson. And so that came out of my 6-year-old. So proof that our money habits do start to form pretty darn early.

So good. And so if a listener wanted to get one of your books or get in touch with you, how would they do that?

The easiest way to find me is at darlabishop.com, and at the bottom of the page there's links to everything you might need to find.

So good. So parents, as always, it takes a village. We are here to support you. We're here to bring resources to you. And having these conversations may feel daunting, but it actually can bring you closer to your children if you're going in eyes wide open. If you allow your child to apply to colleges that you can't afford or you don't want to go into debt, it's best to have those conversations way ahead of time and build a college list based on that financial fit. It. So, Dr. Darla, is there any last words of encouragement or advice you'd like to share with families?

That if you're thinking about it, then start talking about it. And the more you talk about it, the easier those conversations get.

Uh, so good. So parents, until next time, remember, college is part of life. It's just the stepping stone. It's not the end game. So when your child is asking you about careers, really lean in and ask them, what about that fascinates you? And if it's they need to go to college to get that career, that's exactly where you want to make sure they understand that college can be up to $90,000 a year right now. That is something that could absolutely change the trajectory of their life. We want to support you. So thank Thank you so much, listeners, and until next time, you've got this.