Julie: You know, some of their friends have unlimited access because they've got Apple
Pay, and then other kids that have no allowance and never have any money to spend.
And I guess this is just like a real world lesson also is kind of navigating how you deal
with your friends and peers and colleagues and everybody's got different types of
budgets and different amounts of money. I'm going to have to teach him like, just
because your friend can swipe everything with Apple Pay doesn't mean you can use
Apple Pay that way.
You still have to follow these rules and the strategy that we've been working on.
Alec: Hello and welcome to Cents of Responsibility. I'm Alec Lindenauer, a certified
financial planning professional, husband and chief allowance officer to two daughters. I'm
also the creator of the Cents of Responsibility, tools, and how-to instruction parents need
to raise their children into financially literate, money savvy adults, even if they don't know
much about finance themselves.
Julie: I'm Julie Franz, a chef, entrepreneur at heart, wife and mother of two middle
school children. I also curate the sense of responsibility community, so parents have a
forum to ask questions, share success stories, and discuss their journeys. As a financial
newbie myself, I'm also cultivating our group support system to help carve out my own
family's path toward financial literacy.
Alec: Welcome back, COR parents and caregivers. Looking forward, as always to today's
episode. This episode was inspired by a scary statistic that I heard, which is somewhere
between a third to a half of Americans cannot cover a surprise $400 expense. So what
would help the majority of those folks in emergency reserve?
Of course that's not possible for everybody, but that is the prescription according to a lot
of methodologies for financial planning. Now, in our last episode, we discussed behavior
over finance behavior is the idea that, hey, money's not such a scary thing. If you get
into the finance conversation, well, that's science, right?
That gets a little bit scary. But if we talk about behavior, that's letting our kids practice
with money. How do we practice a cash reserve if that's a behavior that we want them to
develop? Well, that's exactly what we're gonna talk about. We're gonna get granular,
we're gonna get actionable, and we're gonna get helpful.
So stay tuned for that. And incidentally, I did write a recent blog post about this very
topic about emergency reserves for your kids. So you can check that out at
censeofresponsibility.com/blog. And of course, cents is C E N T S. Also, I just wanna
tell you that the best place to start your COR journey or to improve your COR journey is
at centsofresponsibility.com/resources.
And as always, I invite you to rate this podcast. Give us a comment, drop us some
feedback whenever you get a chance. All right, enjoy and teach Cents-sibly.
Julie: Today, Alec, we're gonna be talking a little bit about how to use an emergency
reserve fund and how that could be a great addition as a fifth bucket to your allowance
program. You're actually gonna tell me how to do it because this is not something I've
tried and I'm really excited about learning from you another tool of the trade, and then
we're just gonna get into it. We're gonna share some stories, love talking the wins, the
challenges, the good, the bad, the ugly... Always the ugly, always. And now we've
come, come around to see the other side and see the light. So let's get into it. All right.
Tell us, uh, tell us what you're all about today, Alec.
Alec: Alright, so an emergency reserve, Julie, I was doing some reading, a couple weeks
back and I came across this statistic. This was during April. It was financial literacy
month, and said something to the effect of that like over half of Americans cannot cover
a surprise $400 expense. And I was like, wow.
That is, that's startling. That's heartbreaking. I mean, that's, that's a tough statistic to
hear. If I'm wrong, it's like 40% or 60%. I mean, it's a pretty big number. And when I got
my certified financial planning designation, one of the key tenets and one of the core
things in terms of, okay, well what do you plan for it is the idea of an emergency
reserve.
It's the idea that you save up somewhere between three to 12 months of living expenses,
and you have that as a backup for your life as you, as you move forward, in the event,
whether it's you lose your job or there's a recession, or the air conditioning breaks or
whatever an emergency may be. And the idea was that if you are in an industry or you
have a job, that's something where it's very vulnerable, you should have closer to the 12
months. If you have very, very good job security, income security, then it should be
something closer to the three months. And it's a, it's a personal preference, but it's a
basic tenet of financial planning is the idea of this emergency reserve through all of these
tactics, these money teaching tactics for our kids, if we're trying to create experiential
learning opportunities for them, I'd been thinking, okay, well, how do you create the idea
of an emergency reserve for your kids? How do you get them to practice that? And that's
really what I've introduced to them. So, you know, you went through the elementary
starter course, which is okay, well, K through six, K through seven, somewhere in there,
you know, utilizing the different buckets.
Spend, save, invest, and donate. So now that they're firmly in middle school and and
high school, as that process evolves, Yeah, we have added this fifth bucket, a fifth bag
of the wheel, whatever, whatever it is you wanna call it. But yes, so now they have that,
what I call their, their emergency reserve.
Julie: I love it.
Yeah. You know what John's Emergency Reserve will be used for? What's that? Bike
maintenance. Every day -- there you go -- there's another tire popped, or bearings
need to be replaced. I mean, the amount of money that goes out for this kid's bike, all
his bikes. And I just keep saying, you need to have more money in your savings for
bikes.
And I don't know, there's a weird gap there of his understanding, 'cause savings feels
like something you should be saving for fun things -- right -- or saving up for
something, saving for camp, saving for a car, saving, you know, big things. And so I
think having this idea of like, yes, the savings can be used for future good things --
exactly -- the emergency reserve also has to be there for those unexpected things that
allow you to do life. Exactly.
Alec: Yep.
Julie: Yeah, I think that's a great idea.
Alec: So how we introduced it, what I did was I started with when Eve was in sixth grade
and Grace was in eighth grade because they had different income amounts.
I basically just mandated it. I said, okay, this is what we're doing now we're gonna add a
fifth bucket, and it's called your Emergency Reserve. Eve, your number is $30. Grace,
your number is $40. It just felt like appropriate numbers for me in my household, just in
terms of, okay, well these are amounts that potentially if something happens, if you get
into a situation that this would cover it.
There was no real science behind that. You know, all the other things that we've done
have been pretty formulaic. This, I just really went with my gut. So sixth grade, $30,
eighth grade was $40.
Julie: Well, I guess you had to have some idea when you came up with those numbers
of what that would cover. Like for John for example, his number would be a hundred
dollars because a bike falls, crashes, needs a new seat, it's gonna cost 50. I mean, I
can like start kind of formulating those numbers based on experiences, so I know for him
it would have to be a hundred. Now Cassidy doesn't really have too many emergencies.
Like she's very calculated. She knows how much she has. She never runs outta money.
Hers might be 30 and that would be fair.
So what in your head would be an emergency need for your kids?
Alec: So I think if they're in middle school, anywhere between that $30 and $50 is a
good starting point. But you have to be flexible to adjust. So here's how I introduced it
initially. I said, girls, this is the amount that we're starting with. Eve, it's $30. Grace, it's
$40.
Now keep in mind, you know, I created this idea. It wasn't like I read it somewhere and I
got a formula. So it had to be tried and true. I had to, to start with something, give it a
whirl, and that worked. However, shortly thereafter, Grace had a windfall of cash come to
her. Her cash position and investment position dramatically changed from what it was
before.
So for her, I mandated, even though I didn't think she needed it necessarily, I said, your
new amount is a hundred dollars. Because she, she had it, it was easy for her to siphon
the gifts that she had. She was blessed and fortunate to have that. So it made it an
easy way to do that. But initially to get to the $30 and $40, I didn't say, okay, everyone,
I'm funding it.
I didn't say that. And I didn't say, okay, everybody, you have to fund it today. I said, this
is the goal. This is where we want to be. And it took them each, somewhere between
three and five core days, so three and five monthly allowance days for them to get to the
point where they were fully funded in their emergency reserves.
Make sense?
Julie: I understand how you got there. I want to know what kind of emergencies would
you foresee? Like what have you seen in the past? What would you have liked this
emergency fund to pay for from previous experiences? Just to kind of give everyone an
idea of what the difference is between emergency funds versus pulling from savings or
using your spend.
Alec:
Great question. There's three times that I can think of offhand where this came up and
all I think are perfect examples of, of when something like this happens. So the first is
the girls they fight, oh my goodness, the mirror they fight. The mirror.
Julie: How could we forget the mirror?
Alec: That's right.
The mirror. So they both had Julie, they both had mirrors on the back of their, their door
to their room. But now only one of them has a mirror on the back of her door. And that
would be Grace. And that's because Eve and Grace were wrestling over their door, back
and forth, back and forth, back and forth. The door slams, the mirror shatters, and I
said, okay.
Who's gonna pay for that? I sure didn't wanna pay for that. And when we looked at what
they had in their spend money, well their spend money was a little limited. So we said,
okay, well it's gonna come from your emergency reserve. And they were able to pay for
the replacement of that. Which ... perfect, right?
That's no different than your air conditioning breaking or my air conditioning breaking and
look at my checking account and saying, wait a minute, you know, I didn't realize that
was gonna be an $8,000 expense or a 10,000 or this, or we have a flood or a
hurricane or a tornado, or whatever the case is.
They experience that, that exact same thing. This is exactly what I want them to
practice.
Julie:
Okay, good. All right, so that's one,
the mirror.
That's one. Next one is Eve and I were walking on Lincoln Road in, you know a little
outdoor pedestrian mall here, and she was about to go off with her friend, and she was
calculating in her head and also looking in her wallet and over the debit card and she
was trying to think, oh wait, oh, you know what?
I'm about to go and spend time here with my friend, but I don't really have that much
money. And she muttered to herself. But I heard it crystal clear. She said, Ooh, it's a
good thing I have that emergency reserve. And I was like, yes. And that's exactly right
because there are times when we dip into that, right? And it's great if we all have it. Like
I said, half of Americans don't, but those that do, there are times where you can use it.
It's not ideal to use it for a want instead of for a need, but it is there. It is a resource it
can be tapped into. And it turned out that she didn't use it, but the fact that she was
thinking about it right, is exactly what I want. She knew, okay, I have a backup. I don't
feel strapped for cash. I've made a plan that I feel better just going about my daily
routine that I
have that backup. I like that. You know, Cassidy loves to go shopping, as you know,
and sometimes, you know, on the weekend if she's bored and doesn't have plans, that's
just a fun outing to do with a friend.
So I'll say, Hey, Saturday afternoon, you don't have any plans. You want me to drop you
and a friend off at the mall? She goes, Yeah, I would, except I don't have any money
left. And I say, well, yeah, but you could still go shopping. It's still fun. No, it's not. It's
not fun. If you don't have money, then it's just painful, you know, to have to look at all
the things you don't have money for.
So I feel like if she had that emergency fund and she knew that, Somewhere back there,
she had $50 in case she finds something she wants, then she would be more apt to go
and enjoy the mall on a Saturday afternoon, even if she didn't have money in her wallet.
So I like, I like it for that, um, option too, just to know it's there, but it's not in your
spend.
Alec: Right. So that was, that's number two, you know, with the credit bill, right? The
credit bill is part of, again, the elementary starter course where kids aren't always
carrying their wallet around. And so we have the credit bill on the fridge and when they
borrow money from the mommy, daddy caregiver bank, when we're out, come back and
we write that down on the fridge so that they can repay us come allowance day.
Now, if they don't actually cover that expense, if they've overspent their credit bill, then
they have to pay a penalty, in this case, $10 penalty. Well, one time Grace did actually
overspend, right? And she said, wait a minute, I have my emergency reserve. So she
paid out of that and she avoided a $10 penalty.
Again, feeling that, just that gratitude that she had that sense of gratitude like, Ooh, I
have this, this safety net that I hadn't planned on, but it just saved me $10. Right. Which
is real
Julie: Yeah. What a great real life moment. Cuz I've definitely been in that situation
before where it's like, oh my gosh, I have a bill due. It's $1,500. I only have 1200 in the
bank. What am I going to, I don't want to pay the late, and yeah, pulling it out of that
emergency and knowing, okay, I've got that 300, I've gotta add back in there by next
month, we're good. I think that's a really great thing for an eighth grader to start learning
about.
Or ninth grader.
Alec: Ninth grade. And, and what I love is that, She did it. It worked. She practiced it,
and now she's only been contemplating using it since she hasn't actually dipped into it,
which is exactly what I want. That's the lesson, the goal, just to have them think about it.
Know it's there.
Julie: Okay. Just from your examples, I can see how that would work for both of my
kids. Okay. So I'd like to know, you know, how you got it started. I know you touched on
it a little bit at the beginning of this conversation, but I'm just kind of thinking like
realistically how I would introduce this. I'd have the conversation and give the examples
of what an emergency fund is there for.
I kind of am thinking maybe I would even help with a little bit of seed money for that fifth
bucket, just so it's not all of a sudden like, here you have this resource and now it has
to go into five buckets instead of four. That I feel like that might set off kind of a bad
tone or a little bit of anxiety.
They already feel this budget strap. Is that a good idea, do you think? To, to like start
them with a little bit of money and then give them some goals and some strategic steps
forward?
Alec: So, you know, I'm a big proponent of you have to do whatever works in your
house, right? Whatever you're doing that you can stick with, that's the best way.
I found, given their cashflow, they're spending their income. This worked in this way. I
think that it is important that they have some stake in the game. So if you say, Hey
guys, here's the plan. You're each gonna have, let's just say it's $60, because that
makes it easy. And they're both in, in middle school, so $60, and what I want you to do
is I want you to fund it over the course of the next three months.
But whatever you put in, I'm gonna match. So you're gonna put in 10? I'm gonna put in
10. Oh, then the next one you 10 I 10. You know, something like that. So they see you
matching it. It's joint participation. This is what it's for. And so they have buy-in into the
Julie: I like it. Yeah. We haven't done any matching yet, which I think is a good
educational
component also. I think this will be the next added step. I like that a lot and three
months, you know, that gives us the summer, which I think is a good time also to start
utilizing some new tools. I like it. Okay, so then tell us a little bit about a core day and
can you just dive into that a little bit more of like how that looks in your house now when
it comes to the five buckets.
Alec: So initially during the, let's call it the phase-in period, it was putting that bucket out
and saying, okay, remember this is the goal. And sort of re-explaining it, making sure
that they understood what the purpose was, and then watching them allocate, reminding
them, okay, this is the goal, Evie you need to get to 30, Grace, you need to get to 40.
So making sure they got there. Once they're there, I basically just remind them. So
actually on the front where it says Emergency reserve, I wrote the amount. So it says
right on there. Now again, it says, Grace Emergency Reserve $100 and Eve, Emergency
Reserve $30.
And I just say, you didn't tap into this this month, did you? They say, no. Okay, great.
Let's make sure it's all there. It's all there. Good. You know, just reminding you, you
have this. That's it. That's the whole conversation. Putting it in front of them, knowing
that they have it there, giving them that reminder.
You don't have to have a whole lot of conversation about it. They basically should know,
but it's just that reminder. That's it.
Julie: I like it. Yeah. I think as you're talking, I think I. The first time we introduce it, I
might actually start talking about it just like in the car, you know, over the weekend or
something like that, to kind of start saying like, Hey, you know, what would you use an
emergency fund for?
Have you ever found yourself in that situation where you really wished you had a backup
or you know, kind of start planting the seed? And then when we do the next core day,
which I guess is not this Sunday, but the following Sunday, then we can really sit down
and make that part of the conversation of like, what's the actual amount, what are the
steps to get there?
So I think having that pre-conversation will be really important to just start them thinking
about all the different ways an emergency fund could be useful. Ways that we wouldn't
use it. I mean, I can see John immediately going like, saying, I'm hungry, I want a meat
ball sandwich, and I've got that envelope there.
You know, I think we're gonna put it in an envelope that's like sealed. You know, it's like
not so easy. He just tends to just go, you know, he gets hungry. There's that money.
Alec: You can also put the stipulation on this saying the emergency reserve is, for
discussion purposes, meaning, don't touch it without talking about it.
Correct. Yeah, you must come talk to us. It must be a conversation for you to tap into
an approved reason. I don't know exactly what those reasons are yet, but we'll know it
when we see them. And John Meatball sub isn't one of them.
Julie: Right? Meatball sub, yerba lattes, like all the things you run over to the grocery
store for are not part of the emergency fund.
Yeah.
Alec: And I think part of that pre-conversation, hugely useful, is to tell them, you just
said yourself, you've been in that situation. If you can think of real examples where you
were in that situation, or you can relate to that situation where this would've been a good
time for you to have that, how much more comfortable you would've been, or whatever it
is that you can draw on personal experience to tell them, I think is hugely useful.
Mm-hmm.
Julie: Yep, definitely agreed. So you feel like it's working. This is something that you're
gonna keep on with and start sharing with parents more and more.
Alec: Absolutely a blog post is actually live about that already. And I really was excited
to introduce you to it this way, you know, so that we could really like dive into it.
And it is definitely going to be, I'm hoping by the end of the year we really get to do the
middle school starter course. And this would be that either the middle school starter
course or it's the continuation for elementary starters. So middle school up and running
course, if you will. But it's definitely going to be part of that because it is working, I think,
amazingly well. It does exactly what it is we're trying to do. We're trying to teach them
the behaviors around spend, save, invest, donate, borrow, like, create good habits
through practice. This is exactly doing that. And like I said, it's one of the key tenets of
financial planning. How could I not want them to practice that?
So yeah, definitely gonna be talking about it a lot.
Julie: I like it. I like it a lot. Thank you for sharing that. I'll let you know how it goes.
Alec: Of course. And I know you had something else you wanted to talk about.
Something else on your mind as the kids go running around with their
Julie: Oh, there's so many things to talk about, so many stories to share. Teenagers ..
You have girls, and in my experience, girls have it a little bit more together than boys,
but I guess it just depends on the kid.
Cassidy is, like I always tell you, she's got it down, you know, she's a spender, but
she's got everything on lockdown. Where John is, his head would fall off if it wasn't
completely attached.
Alec: We take a while. Have faith! We come around.
Julie: So I mean, the kid, you know, now he's wearing like the rubber bands for his
braces, so he has to carry around these little bags of rubber bands and do that all the
time, and where are they? He doesn't know what I mean. It's like all these little things
that are added onto his life. They just, he can't keep track of any of 'em. They might be
here, they might be there. He might have fallen, they might have fallen out of his pocket
at school or the bike. He doesn't know. Right? Just using the rubber bands as an
example, because it's a daily thing that he has to do now, similar to keeping track of his
money, but somehow things just fall out of his pockets. They just kind of fly away in the
wind.
Alec: My mother used to describe me. As she said, every time I look at you, this is
when I was John's age, it's like you walk around and just behind you, as you lift up your
heel, the whole earth is falling away, crumbling, and you don't even notice under each
step, the whole world is just vanishing and you have no idea.
Julie: Yeah. Yeah, that's him. I mean, just this morning he's going off to this huge biking
day, you know, and he's, he's missing one of his important knee pads.
Like he's going to this big bike park thing where you need to be padded up and who
knows? It's just gone. It's like, this is important. This is your safety. You know, it's a
really important piece of equipment. It's just gone. It happens to be in a friend's car that
lives down another side of town and whatever.
Anyway, the other day he comes to me and he is like, I had $18 in my pocket, $10 must
have fallen out. And I, of course I get mad at him and he goes, well, it's not my fault. It
just fell out. Fell outta my pocket.
Alec: It's gravity's fault, Mom.
Julie: Like, I understand it was an accident, but like it's very much your fault.
And he stuffs the money in his pocket and not in his wallet. His wallet is there. And I
said, well, if you pull your phone out, you pull your wallet out, the money comes out,
you know? And if you're on the move and it falls out, I think he went back and found
part of it laying on the street. So I'm trying to teach him.
We've done the whole, we've done a year. It's over a year, a year and a half, of course.
So I mean, he understands the basics and the fundamentals of budgeting. He's still a
very much a work in progress, mostly because he's hungry all the time and spends his
money on food, but he's getting kind of these like really important concepts.
But just the keeping of the money in the pocket is a really hard one right now.
Organizing the money inside the wallet and then putting the wallet in the pocket. And it's
funny 'cause I feel like this is sort of a thing that I would be dealing with with like a four
or five year old, but then we revisit it at 14, 15 years old and so I just feel like, you
know, I don't know that I really have a question for you on this, but I feel like this is
probably something that a lot of parents, not struggle with, are challenged with maybe is
this constant like retraining every month of these same topics in different ways.
And I just feel like being on the core journey, keeping that money and budgeting and
responsibility front and center and like the topic of conversation has been a really critical
element in, in just, this process of growth and making sure that it's always like a really
important topic for our family and our kids to continue.
It's not just like, here, here's the lesson. Now go and you're done. It really is this daily
monitoring, daily education, daily refining, daily reminding, and I get really frustrated,
Alec, and I guess I just wanted to say that, you know, just 'cause my kids are 12 and 14,
it's still every day, every week, every month, we still come up against learning moments
and challenges and I think it's the blessing, right?
That you've given me and the core community to make this a topic that's front and center
and something that we continue to work on and put importance on. So I don't know if
you have any of those kinds of experiences with your kids of losing money. I know Grace
lost a gift card one time and you had to deal with that.
Mm-hmm. You know, kids come, it's like, well, I lost it. You need to repay it. It's like,
Why should I repay it? You know? That is how you learn, child. Yeah. How did you deal
with that? Again, I forgot how you dealt with her losing that gift card.
Alec: In that case, Grace actually lost a gift card that wasn't hers.
This was a gift card that we had given her. Okay, this is the present you need to give
this child at the birthday party when you go. And she lost that. It was a $40 gift card or
something like that. So yeah, she had to replace it, and we said, well, we already spent
the $40, so now you get to spend the $40, which the emergency reserve would be a
great place to do that from.
But we weren't doing that at the time, so we just constructed a way for her to pay us
back. But my broader comment, I mean, I know you didn't ask a question, but my
broader comment or feeling about what you said was, I love my kids, but boy are they
pains in the butts. I mean, and every parent deals with the same, just you know,
different pain, different description of where the pain point is, right?
When we look at the core journey , and the consistency is so important, I think of it less
as daily, partially because that's in intimidating I think for some, but also it does depend
on the household. Sometimes it, it's not necessarily daily. It could be weekly. Money
touches things very often in life.
True. But I think of it more as the consistency of the monthly conversation you're having.
Right? That's the watering of the tree that you're doing every month, and that is where it
all stems from. Right? To continue that tree analogy and I think, at the end of the day,
as much as John is a pain in the butt with this particular thing, think of where he would
be if you weren't doing this every month.
He would not have that sense of the budgeting and the money and, and perhaps
wouldn't even feel the sense of loss that he has. I mean, he genuinely has trouble
obviously keeping track of his stuff and money is included, but what we're going for then,
since we can't always make sure that he is gonna hang onto his money, is I want him to
feel the genuine loss when that happens, as opposed to like, Eh, there's another one.
I have another $10
Julie: somewhere.
Right. He understands the value of money, which is what at the fundamental basis this is
all about, right? Is getting your kids to understand what is $10. He knows the value of
that $10 and how much of a sandwich that is, or that it could buy him. Two yerba mates,
you know, he drank all my kombucha last week.. Last week I had bought myself some
lovely health aid kombuchas. They were out in the outside fridge. I go out there. Not
only are they drank, they're empty bottles put back in the fridge.
Alec: He added insult to injury.
Julie: So I said, you, you need to walk yourself over to Ralph's today and get me my
two kombuchas.
You need to replace those. Well, I don't have any money. Figure it out. Find the money.
I don't know. Borrow from friends. I don't care how you do it. You drank my kombuchas.
You didn't ask. They were empty. Go buy them. So he knew that $10 he lost. They
would've paid for those kombuchas. I don't know how he got them.
I mean, I know he didn't steal them. He figured it out. He, I don't know. I don't know
where he got the money, but he got it. It must have been in his bucket, or it must have
been on his card or something, you know, but he figured it out and he got me those
kombuchas. But I do think you're right.
Like just knowing the value of that and the pain of that and that, had he not lost those
$10, he would've also been able to get himself two kombuchas or two yerba mates or
whatever he wanted. Yeah. And I think, you know, years ago I would've been like, okay,
yeah, you know, Sorry, you lost the $10, or sorry you drank my kombuchas.
No, now it's very specific money for money. We take responsibility for our actions. We
need to make up for it when we lose money or when we drink people's drink.
Alec: Now, functionally, I do think that there's a couple things that potentially you could
do to help him along with that. You know how I feel about cash, that cash is really
important, right?
How do you teach somebody to value a dollar. You've heard me say this a million times,
right? That is you giving somebody a dollar and they give you in return something that
you value, right? That's valuing a dollar. He's been doing this now for, like you said,
almost two years, so he understands that. So it might be perfectly appropriate to
transition him less on cash.
I still think there's an important place for it.
I think it's great to get a phone case where there's a $20 bill that's in the back of that
case always, but if he doesn't have Apple Pay yet, it might be time to add that to his
phone and link it to the card so that he carries less cash. Have it be his sort of a mini
Emergency Reserve, if you will, in the back of his phone.
But for the most part, it's really the card and Apple Pay. Middle school, late middle
school, early high school, I think is really a prime time to introduce the debit cards and
the Apple Pay solutions. So he could be ready for that.
Julie: So this might be a topic for another podcast, but going into Apple Pay, I love, I
love the idea of him having some cash.
Cause I think it's important to be able to manage cash. The credit card I think, is a little
bit more restrained and when he's out. You don't even know how many times I see it.
His debit card, right? His debit card, yeah, his debit card. Every time I look at his
statement, it's like Insufficient funds.
Insufficient funds. He goes and tries to buy stuff all the time and has no money on it, so
he's learning the pain of that too. How embarrassing that is to go up and have no money
on your card. But the problem with Apple Pay, like I said, this could be a deeper
conversation for another, you know, another day's podcast, but he has, you know, a
friend that has unlimited funds on Apple Pay. His friend is always like, oh no. Oh, I've
got Apple Pay, I've got Apple Pay. I got, you know, I can pay for anything, I got Apple
Pay. And there's no real, like, I don't think there's like a budget or a strategy there. It's
just like when he needs money, there's money on Apple Pay.
So there's also that really hard thing of kids learning.
You know, some of their friends have unlimited access because they've got Apple Pay,
and then other kids that have no allowance and never have any money to spend. And I
guess this is just like a real world lesson also is kind of navigating how you deal with
your friends and peers and colleagues and everybody's got different types of budgets and
different amounts of money. I'm going to have to teach him like, just because your friend
can swipe everything with Apple Pay doesn't mean you can use Apple Pay that way.
You still have to follow these rules and the strategy that we've been working on.
And Apple Pay doesn't mean just like open the floodgates, it means another way to pay
using your monthly allowance. You know?
Alec: Exactly. So what I mean specifically though is you can use Apple Pay with the
debit card.
You can link Apple Pay to the debit card as opposed to, like, I have it linked to my credit
card but I also have it linked to my debit card, should I want to use that. So you can set
that up on his phone, right.
Julie: Right. I'm just, saying I need to make sure he understands it's the same as using
the debit card.
Exactly. It's not like Apple Pay is like, this
Alec: free flowing pots of the rainbow. HIs
Julie: Apple Pay, no. His friend's Apple Pay might be the free flowing, you know,
fountain of Wealth, but, John's will not be the free flowing fountain of wealth.
Alec: Maybe instead of stealing the kombucha, he should have gone stealing that kid's
iPhone.
Exactly.
Julie: It's like, I want that kid's apple pay, not my apple pay.
Alec: Right, right, right, right. So yeah. So this could be a very good time to introduce
that to him and say, listen kid, I want to protect you from yourself, and perhaps you
shouldn't be carrying around the wallet as much. Instead, let's get you a phone case with
a little hidden component there where you can stuff some cash, you can keep your card,
it's all in one little unit, and let's link your Apple pay to your debit card. How, how do you
feel about that?
Julie: Yeah. To be honest, he's a very responsible kid in so many ways. You know, he
can find his way around this entire city.
He can take the train places, manage his time really well. When I tell him to be at the
tutor at 5 and ride his bike there. I mean, he's definitely like on it when he needs to be,
but it's the material stuff, you know, that just kind of flows. It just kind of flies away. Falls
right under his feet with every step.
Alec: Falls right under his feet with every step.
I get it. My mother will appreciate that and she will appreciate this podcast, for sure.
Alright, well that wraps up today's episode. So thank you everybody for being here and
for listening. Julie, we sprinkled you all over this episode and that always makes it better.
Julie: Thanks, Alec. Fun to be here. Always fun to talk about kids and money.
Alec: Yep. So everybody, just as a reminder as always, the best place to start Cents of
Responsibility Journey is on our website, CentsOfResponsbility.com C E N T S of
course, because ha ha, we're so clever, Julie. You'll find links to the blog, the podcast,
all of that good stuff. Don't forget to hit, subscribe to wherever you're listening to this or
watching it or whatever it is.
And of course, Julie, we close with Teach Cents-sibly everybody.
Julie: See you next time.
