Today I have a fun and very interesting interview to share with you about children and money.
My guest is Shannon Ryan, author of The Heavy Purse. Shannon is a wonderful person that I met via Twitter last fall and we have been having fun chatting and slowly getting to know one another. I know many people in the PF community write about children and money and the importance of teaching children about money, so I thought that many of you would enjoy learning more about Shannon and the system that she has developed around fun ways to teach your children about money.
Thanks very much for joining me today Shannon!
Thank you Sicorra.
Can you please share a bit about your background and the work that you do?
I am a Certified Financial Advisor, and I have helped individuals, families and small business make informed financial decisions for over 20 years.
At what point in your life did you decide that you wanted to become a Financial Advisor?
My interest in people and the relationship they form with money began at a very early age.
My father started his “money lessons” with me when I was 13. He taught me about the emotional side of money and how it drove people’s financial decisions. He allowed me to make money mistakes when I was young and the consequences were small. I knew I would follow in his footsteps as a Surgeon or become a Financial Advisor.
You say in one of your blog posts that during your time as a Financial Advisor you have worked with people that you thought would be happy with their financial situation, but were not, and people that had very little income, but were very happy. Why do you think the people that had less income were actually happier in many cases?
They aligned their financial decisions with their values. You do not have to be wealthy to live a rich life. People get so caught up in buying things that they forget to slow down and truly think about what they want their money to do for them – what would make them the happiest. My father taught me to use my money in alignment with my values, rather than my emotions.
Do you believe that the choices we make on how to manage our money as adults is a result of how we witnessed money being managed within our family, either by our parents, grandparents, or extended family members, when we were kids?
I believe as early as age 3, before we even know the value of money, we start forming opinions around it. We observe our parents relationship with money, and often times money hang-ups are passed generation from generation. My passion for financial literacy was born out of witnessing the lasting effects of these hang-ups, as I work with adults decades later.
You’ve recently written and published a fun book titled The Heavy Purse. What prompted you to write it?
The Heavy Purse book series was written for more than 10 years – before I even had children! Given the recent challenges in the economy around the world, I felt it was the appropriate time to launch the picture books, blog and workbooks to help parents teach their children to have a healthy attitude towards money.
How does The Heavy Purse help parents teach their children about money?
The book, The Heavy Purse, just starts the conversation. Through the story of “magical coins” children learn that they can use their coins to bring joy to themselves and others. It prompts kids to start thinking about Savings goals, Sharing with others, and Spending only on what makes them the happiest.
The workbooks I have created are tools for parents to teach the basic principles in stages.
My blog and website are designed to support parents as they increase their children’s financial literacy.
Teaching children how to share their money is a point that caught my attention. How do most parents react to that? Are they happy to teach their children how and when it is appropriate to share their money?
Sharing or being philanthropic with our money is tough, even for adults.
Overall, the response has been very positive. Many parents would like to be in the position to give, but cannot based on financial decisions they have made, such as living above their means.
I tell them to start small and involve their children. Donate treats to a local animal shelter, if your children love animals. Once parents and children get in the habit of sharing and experience how good it feels to share, sharing becomes something the family looks forward to doing year-after-year.
Parents have also told me they do not know how to start the conversation around sharing and money overall. We have developed workbooks to help parents teach their children how to handle money.
If we teach our children early, how rich sharing makes their lives, maybe they will not over extend themselves and budget for giving. In the end, a charitable gift is a form of love, caring for someone outside of yourself. By teaching your children to share, you are bringing more love into their lives.
Is it easy to teach children how to manage their money?
It is not complicated, but it is a long-term, ongoing endeavour.
Anything we teach our children, such as good manners, study habits or personal hygiene, takes constant focus. You cannot tell a 3 year old to say “please” and expect they will remember every time.
We have to demonstrate the behaviour and continue to remind them. Teaching your kids about money is the same. Not hard, but needs to be consistent in all situations. Parents have to model good financial behaviour too.
Where I find most parents struggle is that they don’t have the curriculum to teach their children about money, which is why I developed my new workbooks. Each workbook – based on age or level of expertise, contains five targeted lessons to help kids build a positive relationship with money.
Meet Shannon through her videos - Check it out!
Is there a specific age group that is typically more difficult than others when it comes to spending, saving and sharing their money?
The older the child is the more difficult it is to overcome habits already formed, especially the ones you demonstrated. My advice is to start early, be a good role model and discuss money often. Money can no longer be a taboo subject. I believe your children start to “learn” about money as early as 3 years old by watching you.
What advice do you offer for parents with children that are always asking for more money, in particular, in response to children that get really frustrated and upset when the answer is no?
As a Mom, I hate to be the bad guy and always tell my daughters “no”. But life is about choices and the earlier we teach children this, the less we will have to say no.
My husband and I started by making sure our girls knew the family goals for the year.
When we were in a store and they started with the “I wants”, I would look at the item and acknowledge how great it was. I would then remind them of our goal, such as a trip to Hawaii and let them know much I was looking forward to the trip with them.
I would then ask them if the toy was worth working for and saving for themselves. Most of the time, the answer was “no”.
When they responded with a “yes”, they would incorporate the item into their goals. Often I find the “I want” item fades in importance and I never had to say no.
Now, at 7 and 9 years old, the “I Wants” come in the form of goals and asking me how they can “earn” the money.
If your children are 12 years or older, you may want to consider a monthly budget for entertainment, clothing, dining out, etc. When it is gone, it is gone. They will quickly learn that buying something on a whim or without planning can limit their choices for the rest of the month. The notion of making good financial decisions and choices is learned quickly.
As long as you, the parent, stick to the plan. :-)
Do you think that children should be encouraged to save for their university education, or expect their parents to pay for it, or rely on student loans as many do?
I believe this is a family-by-family choice, and there is not a right answer for all. I do believe that students should carefully consider their choice of universities and how much debt they take on.
Often I have met with kids right out of college with 100-300k in debt and a degree/graduate degree in a field that it will take 10- 20 years to repay the money. Debt, of any kind, weighs on our minds and limits our choices.
At what age would you suggest most people should start to work with a financial advisor? Please explain.
I think that as soon as someone starts to earn money (usually right out of college) they should sit down with a financial advisor to start to build a healthy financial foundation. I meet with my clients’ children on a regular basis to get them started in the right direction.
Generally speaking, by the time someone is in their early 30’s they are making enough financial decisions every year that a financial advisor would be beneficial.
Again, Shannon, thank you very much!
If you would like to grab a copy of The Heavy Purse and the Workbooks for your children and a friend's child, please visit The Heavy Purse Store. You can also catch up with Shannon on Twitter @TheHeavyPurse.