Episode 7
Host: Matt Hall
Guest: Marilyn Wechter
Matt Hall: 00:07 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. 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 and stories and conversation, helping you put the odds of longterm success on your side.
Matt Hall: 00:41 Marilyn, it's so great to have you back. Remember episode one 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 a of one part of my life, and I think you're going to help our listeners with an aspect of their lives in their parenting, or just helping other people who are important in their lives who are young and impressionable.
Matt Hall: 01:11 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 listener's attention, because 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?
Marilyn: 01:56 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. I think all too often, best intentions cripple rather than enable. 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 bench posts 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.
Matt Hall: 02:52 Exactly, inadvertently. 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 was listening to a podcast recently, and a very successful couple was asked, how has money changed your life? They sort of avoided the topic. The interviewer, who is very professional person, kind of came back with a different angle. But again, they didn't really answer the question. Finally, the interviewer said, "Ah, we're in Minnesota and I know no one here likes to talk about money." This is 2019 that this being said. 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.
Marilyn: 03:34 Right.
Matt Hall: 03:34 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 going to say?
Marilyn: 03:42 Yeah. I think one, people are unsure what they're going to say. I think that, as we've talked about before, there's so much contradiction and so much ambivalence about what money means. 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. 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?
Marilyn: 04:22 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. 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? They're paying attention to everything you say, even if you're not aware of it. 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.
Matt Hall: 05:00 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. 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 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." These things, whether sort of unintentional lessons or not, they are things that I've hung on to.
Marilyn: 05:38 [inaudible 00:05:39].
Matt Hall: 05:39 I repeat those stories, even to this day at 45 years of age.
Marilyn: 05:42 But hopefully, you do something different with Harper when you pay taxes. 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. 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.
Matt Hall: 06:21 Yeah, yeah. There's one more I just thought of. When I was in high school, my dad suggested I get a job as, like, a laborer on some residential construction company. I always think about this now, but you know when there's a gutter or a drain that comes from your house, it 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. For a whole summer, I dug a hole from a brand new home to the street and I was paid every day. It made me realize, and I think this was my dad's intent, the value of hard manual labor work. 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. I don't know that I understood it at the time, but man, it was a great lesson for me.
Marilyn: 07:21 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. 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.
Matt Hall: 07:45 Yes, I can dig a hole. If you ever need a hole dug, I'm your guy. Not really, not really.
Marilyn: 07:52 But, see that confidence? It started with the ditch digging.
Matt Hall: 07:55 Rights, right, yeah. 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. 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.
Marilyn: 08:25 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. 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.
Marilyn: 09:06 There's a new term that's being used. We used to talk about helicopter parents who would hover above and fixings. Now the term is snowplow parents where parents come and clear every obstacle out of the way. 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.
Marilyn: 09:38 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. When we talk about spoiled, there are four things that we see over and over. 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.
Matt Hall: 10:30 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 because I think those are great. One more time.
Marilyn: 10:43 Okay. 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. 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. 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.
Marilyn: 11:33 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. 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 $1 million to give.
Matt Hall: 12:15 Okay, can you say those traits one more time?
Marilyn: 12:18 Curiosity, patience, thrift, generosity, perseverance, modesty, and perspective.
Matt Hall: 12:28 Yeah. You know, what'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. 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.
Marilyn: 13:03 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.
Marilyn: 13:31 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, build up is really important, so that if you think about taking a family vacation, one option is involve kids in thinking about where do we want to 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. 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.
Matt Hall: 14:30 I think this is an area where technology probably hurts us. In the old days, if I said, "Hey, I want to buy that new wiz-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.
Marilyn: 14:44 Assuming you have my credit card.
Matt Hall: 14:45 Yeah. I mean, I think that's part of what's happening now is-
Marilyn: 14:48 Right, right.
Matt Hall: 14:48 Jimmy, we don't know Jimmy, he's just a fictional example here, but little Jimmy says, "I want to buy something," and picks up the phone, finds it on Amazon and can just buy things quickly.
Marilyn: 15:00 Right.
Matt Hall: 15:00 I think we're moving so fast and can process our wants so quickly. I mean, I've even bought things that 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.
Marilyn: 15:17 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. What I'm asking parents to think about are their reactions to those things.
Marilyn: 15:39 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. If this makes you feel good, Jimmy, keep it. Or, I can't do this with you, but you can buy that. 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. 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. 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.
Matt Hall: 16:30 Okay. Well, let's maybe go to a few practical things. We've been talking about the outlook or the frame or the sort of a model for thinking about money and kids. Let's do a few practical questions. 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?
Marilyn: 16:56 What I like to, I'm going to 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. Then you have to not bail them out when they spend all their money before the month is up. 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 is 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. Think about debit cards rather than credit cards.
Matt Hall: 17:53 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 are some basic things you're supposed to do just as a family member. I'm not going to 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?
Marilyn: 18:19 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. 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 want to 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 going to pay for.
Matt Hall: 19:03 Okay Marilyn, so one of the things I think I think about sometimes is this idea of not lecturing. 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.
Marilyn: 19:22 Right, and I think that that's what you want to avoid because nobody wants to be lectured. 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, just 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?" 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?
Marilyn: 19:57 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 in discussion 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.
Matt Hall: 20:29 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?" Do 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?
Marilyn: 20:55 I would hope by high school they do, but kids as early as preschool begin to understand hierarchies and pecking orders. 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 the idea of two 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." Perspective becomes really useful, and if you can't talk about it, you don't know where it fits.
Marilyn: 21:32 Kids watch where they fit in the hierarchy, and without specific information, nobody knows what it means. One way to help your kids is to codify that. To talk about, again, it's a little bit like sex education. You gear your responses to the maturity level of your child. You're not going to say the same thing to a five year old about sex as you are to a 15 year old. You're not going to say the same thing to a five year old about money as you are to a 15 year old, but you are going to say something to the five 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.
Marilyn: 22:13 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. It gives a value context as well as a numbers context, so that any conversation about money should have a concomitant discussion about value. 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.
Matt Hall: 23:06 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?
Marilyn: 23:16 Yes. 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. In other words, I will reward your hard work. 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 going to double that. I'm going to give you X. Otherwise, I think it's way too easy for kids to just be passive. I don't think that that helps them.
Marilyn: 23:56 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, it's on their dime. If they want to drive their friends all around and it goes more than a tank of gas, they have to pay for it. 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. Again, as parents, whether it's about money or anything, what you want to do is reward striving.
Matt Hall: 24:42 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.
Marilyn: 24:57 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. It's not your success that's the problem, it's how you frame it.
Matt Hall: 25:14 But, it sounds like for people who maybe are listening and thinking, "I haven't done a lot of this and my kid is ...".
Marilyn: 25:22 40.
Matt Hall: 25:22 Yeah, 40. Is it too late?
Marilyn: 25:26 It's never too late. 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 and so much you can shape, but it's never too late. You'll have pushback. 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 going to 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.
Matt Hall: 26:07 Okay, so why don't you hit us with a few final takeaways for our listeners.
Marilyn: 26:13 Okay. 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. Finally, remember that you need to model the values you want to see in them.
Matt Hall: 26:51 Oh Marilyn, thank you so much. I love the list. Let me go over it just real quickly. I counted seven items. Number one, safeguard the development of your child's ambition. Two, foster and create resilience. Three, think self-worth, not net worth. Four, focus on giving love, guidance, and time. Five, remember there's nothing you can buy that will make up for your absence in their lives. Six, try to give them both the desire and tools around money. Seven, model the values you want to see in them.
Matt Hall: 27:27 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 a great amount of downloads and subscriptions and reviews, and I think if you like the episodes so far, wait until 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.
Matt Hall: 28:11 Who taught you your first lessons about money? Please note, the information shared 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.