Please note: this transcript is not 100% accurate.
00:00
your child needs to see how well you manage money and you need to show them how you do it. I said, if you borrow $10, you will have to pay 12 back. And if you don’t pay by this time, that $12 is gonna increase to 14. So giving allowance is only the first step. The real work begins once you have handed that money over. Parents ask me, they say, well, what do I say to my kid if they ask me, how much money do you make?
00:26
So this is another one, right? It’s kind of like, oh, you know, do I tell them? Do I not? Do I burden them? Or it could be because they are comparing themselves to their friends and, you know, maybe they think that you have more money or you have less money.
00:45
Welcome to Uncover Your Eyes, where we break down the most pressing health topics shaping lives today. Teaching kids about money isn’t just about financial success or their future. It’s about their wellbeing and health. Today we are going to uncover the power of financial education with Maya Corbic.
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Maya is a CPA chartered accountant and is the author of a kids book, From Piggy Banks to Stocks, the Ultimate Guide for a Young Investor and the founder of the Wealthy Kids Investment Club. She has an extensive social media following and her work has been featured in multiple news channels. Welcome Maya. Thank you so much, Maya, for being on today. Thank you so much for having me. So you know, tell me how…
01:43
Like why is financial understanding finances so important for children? Well, first of all, we live in a very consumer oriented society. So a lot of kids nowadays have access to iPads and iPhones and they are on social media. And sometimes what they see on social media is not exactly what reality is. They’re…
02:10
perception of reality may be skewed because they see a lot of these Instagram influencers that are doing these buying or shopping hauls and you know buying all these things and spending lots of money, but that’s just not practical and Obviously if we were to follow that You know we can get ourselves in a lot of trouble and not only that it can actually cause a lot of distress later on in life
02:34
So how young would you recommend that children need to know about dealing with money? So I recommend that parents start teaching their kids about money as soon as they turn five years old. That may seem very young, but there are a lot of concepts that five-year-olds can understand. And I’ve actually taught these concepts when I went to schools and I did my workshops. I would teach in kindergartens, different kindergarten classrooms. And
03:04
One concept, for example, that they can understand is the difference between needs and wants. They are fully capable of understanding that needs are things we need for survival, such as water, food, shelter. And then wants are things that are nice to have, that we want, but we don’t need them for survival. And they’re also capable of understanding that we need to spend our money on needs first and on wants. And I usually like to tie in a little aspect of
03:33
I tell them, sometimes when you go shopping with your parents, think about what your parent is buying. So, if you’re going grocery shopping, they have to buy good foods that are healthy for you. And then, if there’s any money left over, then we can maybe think about getting that candy. But first we need to take care of our needs, then we do the wants. And they understand that. That’s such a great idea. I’m going to explain that to my four-year-old soon.
04:02
You know, but as we shift, I guess, a little bit older, how does that change? How does that conversation change? I’m assuming it changes by the time they’re like seven, or, you know, grade two, grade three. Um, so tell me how that shifts. Absolutely. It changes. Yes. So what we do is we actually build upon concepts that we taught them when they were younger and, uh,
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somebody who’s also somebody who’s five years old, we can start talking to them about money, like different denominations of money, coins, bills, and how those relate to each other. And then I suggest that parents start introducing allowance. And there are different ways of doing allowance. Some parents are very passionate about doing it one way over the other. There are actually four different ways.
04:48
And I’ve been doing this for the last 12 years, and I firmly believe that there is no one set way of doing allowance. I think that everybody just needs to do it in a way that aligns with their family values, because that’s kind of how we parent. We parent in accordance with our family values, and money is very personal. And so we need to teach about money in a way that aligns with our personal beliefs and values.
05:15
So the allowance would be the next step. And then when we do the allowance, regardless of which of the four methods people choose or parents choose, I would suggest that the next step would be to teach kids to save. And they can do that by automatically depositing a certain amount of that allowance into their piggy bank or a savings account, putting that on, I call it autopilot, but it’s not really autopilot. It’s just building that.
05:45
habit, that muscle memory of, yeah, the habit of putting that money aside so that one day when they become adults, they actually repeat that. As soon as they get their paycheck, they save a certain portion of their money and they don’t just go out there and blow it all. Right. You know, backtracking on allowance. So what age generally do you recommend starting allowances? You could start at age five or six.
06:13
They are capable of understanding that, you know, this is the money that we use to purchase things services or things. And they understand that sometimes this money is used for their wants. And then what I like to tell parents, once you give them allowance, don’t just give it and forget about it. You really have to teach them how to manage it. So giving allowance is only the first step. The real work begins.
06:43
once you have handed that money over. So you want to have a certain set of rules as to what should be done with that money. So one of the rules could be to save a certain percentage of that money. Another could be to put a certain amount of money for donations or a cause that they care about. And then the money that’s saved, it could be invested or you could really have two types of savings. This is something that I did with my own children.
07:12
There would be savings that we would eventually invest for long-term for things that we cared about for the goals that we had in the future. And then there would be some short-term savings for a toy or something that they can get in the near future. So that way they feel validated and they feel, you know, just inspired to continue saving because they see that, you know, in the last couple of months, they’ve saved for this amazing toy that they really wanted. And then there was the spending part that’s just kind of more like an impulse thing, you know.
07:40
They have some spending money. So if you’re going to the mall or let’s say a town fair that happens in your town, you just bring that money along. And you know, if they want to get a little toy or something then they can spend that money because it’s their money. Right. You know, you talked about the allowance. I haven’t started doing that for my kids. I really should have more laziness, but you know, you said there was a couple of different ways. Do you mind mentioning a couple of, you know, your ways that you recommend doing it?
08:07
Sure. Yeah. So this is a little bit, it’s going to be a little bit longer, but please feel free to interrupt me if you have any questions. So there are four different ways. The first one is the one that, well, most people are familiar with this one. It’s paying your child to do chores. So parents who believe in this allowance method, they want to teach their kids the value of working hard, money doesn’t grow on trees. And you know, when you get, when you work hard, you get rewarded.
08:36
And obviously if they don’t do the chore, they don’t get paid. The second method is the one where you actually just give certain amount of money to your child every week, regardless of whether or not they’ve done their chores. And the parents who support this approach, they believe that kids should do chores because they, they are contributing member of the family unit.
09:00
and that no one’s going to pay them to make their bed or set the table for dinner when they get older. So they just believe the chores should be done regardless. And if the chores are not done, the kids still get allowance because allowance is the teaching tool used to teach kids how to manage money, but they will take away things like screen time or play dates or something else that they believe they can take away.
09:28
The third method is the hybrid of the first two. So these parents give a certain amount of money every week or every two weeks. And that’s non-negotiable. Again, that money is there to teach the child how to manage money, but they will give that child an opportunity to earn extra money if they want to by doing tasks that maybe that parent would pay someone else to do for them, like a car wash. Or I used to get my kids to shred my confidential documents.
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instead of taking them to Staples for shredding. And so that’s, that is the third method. And then the fourth method is not giving allowance at all. I have met parents that feel very, very strongly about this and that is okay. If that is you, there’s nothing wrong with that. However, you know, if you choose not to give your child allowance, I strongly suggest that you set the best possible example when it comes to money management, your child needs to see.
10:27
how well you manage money, and you need to show them how you do it. And even if you do this, I would suggest that you still find ways to involve your child with managing money. So an example would be involving your child with their birthday party, budgeting for their birthday party, or budgeting for the back to school shopping. So maybe the first couple of years, you would do it with them, and the ultimate goal is that you would just kind of.
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hand it over to them, especially as they get older, when they become teenagers, you can just say, here’s the set amount of money. You can still go through certain, you know, aspects of it with them. Like if it’s back to school shopping, okay, let’s go through the list. These are the needs, you have to get this, and you know, here’s the list of wants. So if there’s money left over, maybe you’ll be able to get wants. And then through this whole process, you would be teaching them things like how to spend, spend smartly, how to look for coupons and sales and research their purchases.
11:25
I like these exercises because they are real life examples of how to manage money. I prefer using real life experiences rather than, you know, doing the worksheets and whatnot. Right. That’s so great. So what are some common mistakes that you see parents do? Well, I think that the very common one is that when parents just give allowance and they don’t really set any rules around that allowance.
11:54
It’s more like, oh, here’s some money. And all the kids do is they go out and spend that money. And sometimes that’s because parents don’t give enough money for allowance. And what I mean by that is I’ve had one mom who said to me that it was really interesting. I was teaching a parent workshop in a school. And after the workshop, she came to me and she proudly exclaimed that she’s teaching her kids about how money is hard to come by. And she’s only giving them 25 cents as allowance each week.
12:24
And I was like, well, okay. Again, I really do believe that every family needs to do whatever they feel comfortable with. But I was trying to explain to her, giving them 25 cents is not really teaching them anything in terms of how to save that money or how to spend it smartly. For them to save for anything that they want, it would take years, right? So you’re discouraging them from saving.
12:51
you know, and also if you’re just telling them money is really hard to come by, there is that whole money mindset. And money mindset is actually a really big thing. I didn’t think it was for years until I started really researching it. And so if you’re putting that money mindset in your child, like that child will always think that money is so difficult to come by and it’s so difficult to earn. So you may not want to do that. So you may want to give them enough money so that there is actually
13:21
10 to 50% towards savings and put it aside. And so that you can practice that action of saving money and investing it and putting some money aside for donations. And you know, the money that’s left over, it’s actually something that they can spend. And even if they make a mistake, it’s okay. They’re supposed to learn from those mistakes. And what are the sort of, you know, repercussions that you see, you know, when
13:50
We aren’t teaching our children how to manage money well. Like what are some of the health implications? Well, I mean, like the big one that I see, and I have two teenagers, so, you know, Gen Z. The big ones that I see with some of their friends is the entitlement, but also the lack of awareness. You know, just how quickly that money is being spent on things like Uber Eats and Starbucks.
14:18
So there are two aspects of it. So there’s the aspect of spending that money and not realizing like that you can actually eat for a lot cheaper and not to mention healthier. I find that a lot of younger generations are just accustomed to Uber Eats and, uh, and Starbucks, uh, the high calorie, sugary, fatty drinks have become a norm. They have several of them a day.
14:48
Uh, and they just don’t think twice about it. Right. So there is that it’s like, it’s like a dabble whammy. There is like health repercussions and then there are financial issues with that too. So I believe that, you know, we can do better. We can teach them better. Yeah, absolutely. It’s like, it’s like spending money.
15:09
and on things that basically end up affecting your health and doing that unlimited. So, you know, and I agree with the sense of entitlement because that is generally very much growing. And, you know, I truly believe it is a learned sense of entitlement from parents as well. So, I love that you’re talking about modeling that behavior to your children. I’m going to shift a little bit, just talk about, you know, one of the things that I don’t even know if I fully understand it, that I could explain it to my children, but debt.
15:39
How do you and when do you explain that to them? So, you know, that is a huge one. And when we talk about health issues, there are so many adults out there, and there’s a lot of research on this, that are struggling with that. But that’s really affecting their mental health. A lot of them have signs of depression because of it. And so it’s really important to teach our kids about that and how to handle…
16:08
that properly before they become of age 18, when they can just basically take on that. And so what I find is, you know, a lot of parents, when I tell them that we need to start teaching kids about credit cards and debt, they’re actually really surprised. And they don’t think that we should be doing that. They’re like, Oh, you know what? Like they, you know, we shouldn’t burden them with this. But I think it’s really important because there’s a disconnect. Like if we don’t teach them and you know, they…
16:36
turn 18 and now they can take on debt or sign up for a credit card, they can get themselves in a lot of trouble. So what I like to do is even with the little kids, you know, I tell them that if they borrow money, they have to pay it with interest. So I’ve done that with our kids. It kind of started off very innocently when I have two kids and they have two different money personalities. One is a saver and another one’s a spender. And my little spender ended up borrowing from the saver.
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and just kept on borrowing from him and kept on borrowing from us. And then I realized that, okay, this is becoming a habit, a habit that we need to nip in the bud. And so I started saying to her that we’re going to start charging you interest. And she was too little to really understand what interest is, but I said, if you borrow $10, you will have to pay 12 back. And if you don’t pay by this time, that $12 is going to increase to 14. And very quickly,
17:35
Okay, this is getting really expensive. So the idea was really to teach them that, hey, borrowing money is okay if you have a plan how you’re gonna pay it back. Also with older kids, I like to tell them that there’s good debt and bad debt. And good debt is a debt that we incur to increase our value or increase our net worth. So we would increase our value by
18:02
I know student loans are not very popular, but I know in my case, I took student loans and I am much further in life there where I was when I immigrated to this country. And so for me, student loans were worth it and I paid them off very quickly. Or I also understand that borrowing money to start a business can be risky, but it can also pay off in the long run. But if you were just borrowing money to buy the latest purse.
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or a gadget that may not necessarily be a good thing. So I like to talk to kids about that. I also, uh, like to, I, what I’ve done with my kids, I’ve added them as authorized users of my credit card so that, you know, they can learn about credit card management. And I only, I actually caution all parents if they want to do that, just make sure that you have a stellar credit rating, because once you add your kids onto your credit card.
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that can impact their credit rating. So how do you teach your kids to use a credit card? I’m assuming you probably, you know, set a small limit, small amounts, such that they’re not over, like a debit card. When do you even give them their first credit card? It’s like giving them their phone. I feel very stressed about giving them a credit card, right? It’s that when is the right time? Right. So I don’t think there’s a right time. I think you just have to know when your kids are able to handle it.
19:29
when you feel that they are responsible enough. Sometimes you may also want to do it just so that they have something in case of emergency. So I’ll give you an example. So I actually gave both of my kids access to my credit card and they both had a $200 limit. And this was like a few years ago. Last year, my son was, or actually, yeah, he was 17 and he ended up doing an aerospace engineering camp in France for three weeks.
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He was away from us and we gave him some cash, but at the same time, I just needed to know that in case he needed something, there was money there to cover it. So he had that credit card with him, the credit limit, we actually ended up increasing it to $500. And I feel comfortable with $500 or even $200 because I’m like, even if they mess it up, like I can cover that. But of course,
20:25
I wouldn’t be just the only one covering it. I would make sure, you know, they pay it back and they work for it and whatnot. But they never misused it. They actually prefer to use the money that’s on their bank account. And, you know, he did say that when he was in France, some of the restaurants were not accepting cash. So he had to use the credit card. You know, afterwards we sat down, we go through it, we go through the statement, we look at what was purchased.
20:53
Uh, sometimes, you know, there are purchases on there that I have asked them to make. Like if they need to buy it, like themselves, just recently, my son had to buy himself a calculator for, for school. So I said, okay, put, put it on. So that’s something I’ll pay for, but the purchases that they’ve done for their own fun or whatever, that’s something they will cover and I showed them, okay, we need to pay this before paid in full before it’s due. What is the youngest that you’ve seen or, you know, coached?
21:22
that you young like family member, I’m going to say, so the kid, they got a credit card. To be honest, I haven’t seen too many kids who have credit cards. I know of adults who had access to credit cards when they were younger. And again, because I have been teaching this for the last 12 years, I have been exploring certain concepts like this on my own with my own kids. My kids have been my guinea pigs. And 12 years ago, when I first started…
21:52
teaching kids about money and doing all this, they really weren’t that many resources on financial literacy for kids. We’ve come a long way in the last decade or so. There are, you know, a lot of podcasts, a lot of websites. I feel like I haven’t, like the people that I have coached or the people that done my webinars, I haven’t come across anyone, but I realized that there was a gap there because as I said, my kids were teenagers and I was
22:21
You know, I started thinking about, okay, what’s going to happen when they go off to college or university and they’re on their own. And I know that when I started university, they were these little, uh, financial booths set up on campuses that were just giving out credit cards, like hotcakes. It was like, Hey, get a CD if you sign up for a credit card. And that’s how I ended up getting my first credit card. Wow. Um, yeah, you get conned into it, right?
22:48
You talked a little bit about education platforms. So for children, young children, that we’re giving these allowances to, is it old style pen and paper, they write it down and they put it in their piggy bank? Or are there trackers or things that you recommend or literally just writing it down and they are tracking how much they have, how much they’re spending?
23:11
I would suggest for little kids, definitely doing it the old school way, because that way they really see it. I find that, you know, we do a lot of online banking nowadays and a lot of the money is invisible. Although what I did notice with kids is that they are actually really good at tracking invisible money. I call it invisible money. It’s not really invisible, but because, and somebody explained this to me, I was actually on another podcast and this was explained to me.
23:40
that a lot of these kids have grown up playing video games. And so they have these coins and rewards and these are invisible, but they, you know, it’s just a number written on the screen, but they know, they remember it. Whereas I can tell you I’m a CPA and I can tell you approximately how much money I have in my account, but I can’t tell you the exact dollar amount to the nearest dollar, not to mention the cent, but these kids…
24:08
are much better at remembering that. Yeah. But I think when they’re little, I think using real money, pen and paper, tracking it. I actually, I even used to give this out and I don’t know if we still do, but it was a free thing, but you can even just do it yourself. It was like basically a piece of paper with like a little thermometer on it. And what I would do with my kids is we would take a picture of something that they wanted from Toys R Us.
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we would put it on there and then we would track their progress, you know, in terms of saving and this would be on our fridge and they would look at it every day and it was a lot of fun. So I find that exercises like that are very, very helpful for kids. You know, I’m glad you mentioned the video game thing because I mean, you know, obviously digital stuff is the way of the world and you’re right, my kids track those coins like there’s no tomorrow. But you know, how is this going to impact?
25:04
financial stability in the future? Like what are your, what if we, as parents, didn’t do much, you know, teaching our kids about money? Do you feel that these devices, what they’re seeing, video games, is really going to impact their financial sense in the future? Things are definitely changing how we do personal finance. And, you know, I have a lot of parents who
25:32
write to me and they are resisting the change. A lot of them tell me, well, I prefer cash. And quite frankly, I prefer cash too, because when we had cash in our wallet, you wouldn’t spend it as fast. When you see it, leave your wallet, you’d be like, whoa, whoa, whoa, wait a second. But now when we pay for things, we just tap. And that action of tapping, there’s no resistance, right? So there’s no time there to actually think.
25:58
Okay, is this a need or a want? Do I have enough money in my account? Or especially if we were putting on a credit card, it’s like, I’ll pay it off later, right? Whereas when we had cash, that was very different. So I, I understand the sentiment around it, but I also believe that we, as parents, we have to prepare our kids for what’s coming and what’s coming is this cashless economy. And you know, they could use cash going forward. That’s not to say that they shouldn’t. It’s just that.
26:28
they should be aware of how to operate in the cashless economy. So there are a lot of things that are changing. Like one of the examples, or one of the things that have changed significantly, I would say over the last 10 years is the investment industry. So many brokerages have expanded their platforms where now, you know, you can have people investing for themselves. You have individual investors just doing their own trades.
26:57
Whereas before you needed to have an investment advisor. So a lot of things are changing and I think we really need to, I wouldn’t say, like, if you don’t want to embrace it, it’s okay, but at least become aware of what is out there and try to teach your child so that if they do end up going that route, that they can, they can do it properly. Absolutely. I love that you said it’s like this cashless economy. You know, it’s like that one click, right? My seven year old.
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can go on my Amazon account and click for one second and do it, and it just goes on my credit card, right? It’s just for them, it becomes so easy. It’s a one-click pay, and it’s accessible to them now through these phones and devices versus before when we were younger, we had to physically go to the store to buy it, and our parents had to physically give us money. What are some tips that you would, general tips that you would give parents that you just feel are the most important?
27:56
Number one, actually, which, you know, I only started giving this tip I started giving only a few years ago, and I thought it was fluff, but it’s really not, is examining your own money mindset. And what I mean by that, our money mindset is very powerful and it’s basically what we grew up with as a child when it comes to money. So it’s all the things that…
28:24
we heard about money when we were growing up. So you can ask yourself, what did I hear about money when I grew up? And sometimes you can replace that word money with different money concepts. So it could be, what did I hear about investing when I grew up? Or what did I hear about budgeting when I grew up? Maybe didn’t hear anything. And that could be a problem. That’s why it’s, you maybe feel like, you know, you don’t really wanna talk about money. What did you see about money when you were growing up? You just…
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you know, see the huge difference, disparity between rich and poor. And how did that affect you, you and your beliefs about money? And what did you feel about money when you were growing up? And did any emotional incidents occur in your family when you were growing up? Like, did your parents argue about money? Because if they did, that could be a reason why you’re avoiding to do anything with money or, you know, money’s taboo in your family. And the reason why I say this is because
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these things really impact us and they’re part of how we operate and how we handle money. And we can inadvertently pass them on to our kids. So for example, a lot of parents that I know, they didn’t grow up being investors. Some of them never heard anything about investing. Some of them heard things like, oh, investing is risky and whatever. So they are so adverse to even trying to invest.
29:46
Even though investing is actually quite simple and anybody can learn it, especially your community of doctors. I really like all of them are so smart and they can learn it. It’s super easy, but a lot of people are intimidated. And so they don’t ever attempt to invest on their own or for themselves. And because they never attempt to do that, they of course never teach their kids. So, you know, these, the money mindset that we have can really have a huge impact on our kids.
30:14
Absolutely. You know, I love that because, you know, I grew up, we didn’t talk about money exactly what you said, which was they didn’t want to burden us, right? And I feel a lot of us have carried that forward, including myself, where, you know, I don’t talk about it that much with my kids because why burden them? They’re too young. But you know what? I think this is a wake up call that the like, just like the digital age, everything is changing. And so we have to change with that wave and educate our children. Do you have any, you know?
30:43
last sort of pieces of advice for parents or children? Yeah, so actually I want to go back to what you just said about burdening kids, because I think that a lot of adults feel that when we talk about money with kids that we’re burdening them. But the truth is that kids are actually very curious about money. They want to learn about it. They want to feel more grown up. So burdening is really interesting word because
31:11
I think adults feel burdened by money because they have to pay the bills and they, you know, they have to budget and whatnot. But we can make money fun for kids and we don’t need to burden them with everything, maybe heavy things, you know, like, oh, I have to, you know, pay off my credit card, but I don’t know how I’m going to pay it off this month in full. Like maybe you don’t need to share that. You can be very.
31:39
picky about what you share with your kids, especially when they’re younger. As they get older, it takes courage to sometimes have these difficult conversations with them, but I think it’s important to be transparent and tell them, Hey, you know what, like maybe like I made some mistakes, but I really don’t want you to repeat these mistakes. And this is how they impacted me. And when we’re transparent, especially with teenagers, they really appreciate it. Like we draw them in.
32:07
And I think they really learn from that. And I just want to mention one other thing. One of the questions that I quite, that I often get about money and kids is, uh, people or parents ask me, they say, well, what do I say to my kid? If they ask me, how much money do you make? Yeah. So this is another one, right? It’s kind of like, Oh, you know, do I, do I tell them, do I know, do I burden? So I usually say, you know what? Just ask your child why they’re asking that question and anything about money. If they ask you something that you feel very uncomfortable.
32:36
about, just tell them why, ask them why are you asking that? Because their answer will determine your answer. They could be asking because they are worried that you may not be able to pay off your mortgage, maybe because they overheard you talk to your partner or spouse about it. And so you need to reassure them. Or it could be because they are comparing themselves to their friends and you know, maybe they think that you have more money or you have less money.
33:04
So you need to have a conversation about that. How do we deal with other people having more money than us? And how can we be happy with what we have? And so when kids start asking questions like this, always ask a question back. And you’re not burdening them. You just keep the conversation going. I love that because everything you said reminds me of my son. Like he asked all those questions.
33:32
But you know what I have learned over the years to talk to him rather than, you know, and share those things. And I think they appreciate it that we’re being transparent. Because when we were younger and our parents hid everything from us, it was like, but why? And we always like felt like we weren’t important enough for them to share these things with us. So definitely a shift in a generational shift, I’m going to say. Thank you so much, Maya, for your time today. Can you tell our listeners where they can find you and your social media page?
34:00
Sure. Yeah. Thank you so much for having me first of all. Uh, yes. So you can find me on Instagram. I’ve hang out there a lot. My Instagram handle is teach.kids.money. I also have a book called From Piggy Banks to Stocks, the ultimate guide for a young investor, and that is available on Amazon. And I also have a wealthy kids investment club, which is a family membership program that teaches families how to invest. And that you can find on
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www. So club.com. Thank you listeners and viewers for tuning in. If you want to catch more episodes of Uncover Your Eyes, make sure to Follow or Subscribe on your favorite podcast platform and on YouTube. To learn more about me, follow me on Instagram @Dr.MeenalAgarwal Until next time, keep those eyes uncovered!