The BEST Advice For Teaching Kids About Money | Ep. 226

Intro/Outro: You know what it is. That's right. It's time to talk money with your money nerd and financial coach. Now tighten those purse strings and open those ears. It's the Money Talk with Tiff podcast.

Tiffany Grant: Hey everyone, I am so excited cuz I have Clifton Corbin on the line now, Clifton I met at FinCon and he is an awesome individual both. Online and in person. But he's here to talk to us today about kids and money, and particularly the younger ones. So, hey Clifton, how are you today? 

Clifton Corbin: I'm doing well. Thanks so much for having me 

on 

Tiffany Grant: the show.

Yes, thank you so much for coming on. So let's hop right in. When it comes to kids, I think. The first question that people ask is, when should I start these conversations? Like, what age group? You know? When will 

Clifton Corbin: they get it? Sure. Such a good question. So what I like to say is, when we're talking about talking about kids and money, what you wanna be looking for is when your kids start noticing money, when do they start being curious about it?

When do they start seeing those transactions with, you know, your debit card of your credit card? And they start. Pay note or, or even when they start asking you for stuff and you, they could recognize that money is the means to, you know, acquire things. So I usually say use those, you know, your kid's natural curiosity and your, your kid's natural interests to be the gauge of when you should start talking to them.

So, you know, usually I've seen, it usually happens around like, you know, four or five, maybe even as you as three, but around that, You know, pre-kindergarten, junior kindergarten age is around the time that I, I find is a good time to start introducing some of these money concepts with 

Tiffany Grant: kids. Oh, awesome, awesome.

And when we're thinking about that, how do we, so, you know, give us some examples. So, you know, a four or five year old, what kind of questions would they ask us for us to kind of jump in and be like, okay, and how would we do that? 

Clifton Corbin: Sure. So I, I love using, um, chances when you're like, actually, you know, transacting when you're actually paying for something.

So, you know, you're at the grocery store. Grocery store. You pull out your card to pay for your groceries and you're about to tap and you notice your kid look at you, or they're like, what is that? Or what, like, the, you, you will pick up, like kids are, like I said, they're naturally curious, so they'll ask.

And so just start breaking it down as like, this is. So just start breaking it down and just say, you know, this is what this card is, this is how we, you know, pay for money. I've got money in the bank. I earn money from work. So it's all those really early conversations that are starting to break down. Like, what is money?

Like, how does this thing work? Like, what are we doing here? One of the ways I like to, to describe it for young, Children is, it's a trade, right? Like I trade, uh, let's say you go to work, I trade my time, uh, to get money. So that's me working. And then I trade the money to get our groceries or I trade it to, you know, pay for the home or what have you.

So it's a nice, easy way cuz kids understand trading, right? Like they've got the Pokemon cards, they've, you know, kids trade. Like that's a concept that young ones usually understand pretty, uh, pretty easily. So I like using the word trade when I talk about money, especially with the early kids. Um, but as far as like other things you could do just to help them understand it, I love roleplaying, especially with younger ones.

Um, I've got fond memories of playing, you know, pretend grocery store in my kid's bedroom or pretend restaurant. Um, so you know, you get little price tags and you put it on little items. If you can't, you know, get that cash register, you can get some play money. If you go to my website, clifton corman.com/workbook, I've got a workbook there you can download for free.

But in the back of it, it's got play money that you can cut out so you know your kids can like start using play money. And start, you know, one of the memories I have is like my daughter charging me like $500 for a strawberry. And me being like, okay, that's price gouging. So, so we got into conversations about like what money is and how do we use it.

So there's so many fun ways that you can, you know, start, like I said, introduce these concepts. Uh, but I really like the idea of doing it at a really early age, just so that your kids start getting a sense of. Like how many works and, and why it's so important. Like when they get older you can get into more of the budgeting, the accounting and all of that.

But at those early ages, it's, you know, it's money identification, it's understanding how it's used to trade for different goods and services, uh, and just becoming comfortable with it as well. 

Tiffany Grant: Okay. And when you say money identification, so going over like, what is a dollar, what is $5, what is $10, what is a quarter?

You know, all those little conversations. 

Clifton Corbin: Exactly. And you can go like, so I always say, you know, start with the basics, but then level up if you can. So for example, you can go through all of that, you know, talk about like the different coins, the different bills, but then. Go a little further and be like, this is a check.

This is what a check is for. This is how we take money from my bank account and we get it into someone else's bank account. You know, so there's, you can go even further with, uh, money identification to how do we actually start trading and transacting. Um, one of the things, if your family can, uh, can manage it like an allowance is a great thing to introduce to young children.

You know, it gives, it gives them a chance to start practicing. Now, I always say, I'm sure you've said it as well, you know, personal finance is personal first. So not every family, you know, will want to or will be capable of, you know, providing allowance. But if you can, it's a wonderful way of giving your child some early chances to practice identifying money, counting money, and then actually using money.

So saving, donating, spending, it gives them lots of opportunities to start actually using the money. Gotcha. 

Tiffany Grant: And so I'm just thinking like four or five year old, what kind of allowances should they get and is, should it be tied to chores? Like, you know, when we're thinking about the younger kids, uh, how would you do an allowance in those situations?

Sure. 

Clifton Corbin: Also great question. So I'll give you a story about what happened to me with my son. So he was about four or five. And he was, he, he was then, and he still is very money curious. Um, so we, I tried, I tried an allowance with him and I can't remember if it was exactly four or five, but very quickly I recognized, you know what, this isn't working because he still wasn't able yet at that age to.

Do the adding and subtracting to figure out how much money should be going into. So we do the three jars method. We have a jar for saving a jar for spending in the jar for, uh, giving or donating. Um, so at the time he just, he couldn't, he couldn't do it. He wasn't ready yet. So I said, okay, we're gonna scrap that idea of the allowance and we're gonna just keep talking about money and using play money.

And that just gave him a chance to practice it, but not in a, you know, a real word, context. So, If your child is capable of, you know, counting and, you know, has that basic math skill, has the basic math skills to, to manage the allowance, what I say is, You know, the kind of the, the guideline that we've seen or I've seen in the research that I've done is that it's usually about, you know, 50 cents to a dollar, pardon me, 50 cents to a dollar per year.

So if they're, let's say five years old, you're giving them anywhere from two 50. You can round that up to $3 or up to $5. That's kind of the, the baseline. The one thing is you don't wanna give children too, too much because you want them to have to save. You want them to have to, you know, work up to making bigger purchases.

But that's a good way, good place to start. But again, you need to make sure that they have the, the skills to actually do the math, to be able to actually, you know, count it. Uh, to manage it. Cause at too young an age, it's just another toy that they'll play with. If get lost, it doesn't work. So it is, you know, every child is different and you will know when your child is ready.

Like I said, I thought mine was recognized, he wasn't, and we moved on, uh, for my daughter, for example, uh, as another example. So she, um, Didn't really start getting into even being that curious about money till later, a little bit later. So when my son first started getting his allowance in earnest, it was probably about five or six.

Like I said, I started at four or five, didn't work, tried it again at, uh, five or six or six, seven, and it worked better. My daughter took a leave in a little bit longer because she just, she didn't care, to be honest. She just didn't care that much. So that's when we just, you know, we kept it in the play world.

We kept it as conversations, you know, we broke out some games. Monopoly as a. Fantastic game to start introducing these concepts. Cause again, they're using it, right? So you really want to have opportunities for them to practice. Uh, so even if it's in the play world with, you know, role playing in a pretend restaurant or if it's with an allowance where they're actually able to use the money for real.

It's about giving them opportunities to practice, giving them opportunities to use money, giving them opportunities to, um, ask questions. And for you to have those conversations because you're really. You're the guide, right? You're, you're there to help them learn not just what money is, but how to use it and how to use it responsibly.

And as they grow, those conversations will evolve and you'll be able to, like I said, add more context and more detail, uh, to get them even more comfortable with, you know, uh, at some point you could start maybe even lending them money so they could start getting into the habit of repaid. So it's all about, you know, I like to say you're kind of stacking knowledge on top of knowledge.

But it's, it's imperative that they get a good base baseline, a good foundation. And that's what these early years are about. It's just giving 'em that foundation so that they feel like they're comfortable, they're confident, they understand what money is, they know how it looks, they know how it works. And then you can start, like I said, stacking on some more information.

Yes. 

Tiffany Grant: So what I'm hearing is stick with play money until they're ready for the real money. Um, and then also, so do you feel like it should be, Attached to chores, or is it just right? 

Clifton Corbin: Yeah, that was right. Sorry. You totally asked me that and I, I missed, I skipped over that. So, no, it's a great question. Um, so with regards to allowance and chores, I usually go back to what am I giving them an allowance for?

You know, if you're giving them an allowance to motivate them to do work, then yeah, tying it to Troy's works. But I feel like there's a lot of. Pitfalls, a lot of challenges that come with that. So, you know, if they decide they no longer want the allowance, well the chore still needs to get done, and now they're not, you know, now they don't have the allowance.

So when I say, when I'm thinking about allowances, my goal is to give them opportunities to practice using money. Like I said, transacting, saving, giving all the rest. So if that's my end goal, I don't like to tie it to chores because if, like I said, chores aren't done or chores are done poorly, And they don't get the allowance.

Now they're not getting a chance to practice and the chore is still not done. So it's a lose losee. So I compare it to any other practice that we give our children. So you know, if they're in sports or if they're, um, learning to play an instrument, for example, if you don't tie that activity to a chore, I wouldn't tie the allowance to work.

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Clifton Corbin: So I know a lot of people hear that and they start thinking, well then I'm just giving money away for free and how are they gonna learn the value of money and you know, all of these other things. And I say, well, you know what? They will, because at some point they will need to work for it because again, we're not giving them a lot, right?

We're giving them enough to get started, but we're not giving them enough, you know, to buy their, to buy their first place or even to rent their first apartment. We're just giving them a little bit of seed money so they can start practicing. But at some point they're gonna say, you know what I want? And they're gonna name some high ticket item that.

And allowance. Even if they save for, you know, multiple months, they still won't be able to afford it. So that's when they're gonna start working. And those first jobs, that's when they're really gonna get it right. Because I joke often, I'm like, if my child does a bad job, I can't fire them, right? Like, I can't fire my child, but a, a boss can.

And a, if a boss fires you, you'll learn really quickly. Well, if I'm not doing a good job, I don't get this source of money, so I need to do a good job. So let your, let their first bosses be, you know, a chance for them to learn those, you know, being prompt and doing good work and all the rest, and you can model it.

I like to say, you know, demonstrate that, you know, good work has, uh, positive repercussions with regards to how much money you're getting and all the rest. So, Model, good behavior model, good work ethic, but with regards to them actually, you know, receiving that from you, there's only so much you can do.

Cause again, the ultimate leverage with regards to work is, well, if you don't do the work, you get fired. So you can't really, you can't fire your child. So, yeah, I, I don't typically tie allowances to chores, but again, I, I want to preface that with, you know, you have to do what's best for your family. So if you feel very, like, if you feel in your soul, like, I cannot give this money without tying it to something.

My end goal is to make sure that your child is getting opportunities to practice. So if you think you need to tie it to a chore, then tie it to a, to just give your child opportunities to practice because there's so many benefits to giving your child these opportunities at an early age that they will reap when they're an adult or young adult that just it.

There's no end to how much benefit it, it will, it will come back to them. So give them that foundation. And if you have to tie it to a tour because that's, you know, what your values say or that's how you feel, then go ahead. But if you're looking for what I suggest, I would say no, keep them separate.

Tiffany Grant: Gotcha. And that makes perfect sense. And I was just gonna add as well, I mean, you could pay them for a job, like if you hire them through your company, uh, which is what I've done in the past, and my oldest son, even to this day, he's like, can I work? Can I work? Cause he's like, I got stuff I wanna buy. But, um, thinking about the younger children again, uh, one more question that I have, and it might be one more, I don't know, we'll see, ask away.

But I just think about, okay, we have two fairy money coming in. We have, cuz you know, between like four and eight ish, you know, they're still losing teeth. And so we have, um, two fairy money coming in. We have birthday money, we have all those different things. And so what. Do you suggest when it comes to that type of stuff, um, how does that fit into the whole allowance?

How does that fit into the spin, save, donate, and all that good stuff? 

Clifton Corbin: So again, you're gonna have to figure out what makes the most sense for you. So when we are getting, when our kids are getting money into the, into their coffers from, you know, parents or grandparents, what have you, aunts and uncles, For some of those bigger things, we tell them straight up, we're just gonna put that into your, uh, education account.

Like you get no access to it. Other times, you know, birthdays, we say, all right, we're gonna, well, we usually negotiate with them or like, we're gonna split this up. Half is yours to do what you want. With the other half we're gonna put into this, uh, College of Ed education account for you because one of the things I'm doing there is I want to show them how with time, you know, investments grow as well.

So there's a bit of learning there and there's also a chance to make sure that it's not just, you know, I don't wanna call it frivolous spending, cuz I think there's value in their spending if they're learning. Um, but I want to make sure that, you know, some of it is protected. But I also want to give them access to some of those, some of that money too.

So I want them to have, you know, some autonomy, some agency with the money. So they're practicing. So it's kind of a, you have to figure again, figure out what works for you. What I've done is I've take, usually it's about half, depending on the amount too. There's sometimes, you know, they'll get. What I consider an ex extravagant or a la like lavish gift.

And I'm like, no, you, you're not getting that. Like, no, you like, I need that. Cause at the end of the day, we're their parents, right? We get to decide, like, as much as I say, give them opportunities to practice, we're still their parent. Like even with the allowance practice, I say give them as much chance to, you know, spend and, and transact, uh, with.

You know, I'm buy what they want. But you could still put some boundaries in there because at the end of the day, like I said, we're still their parent. We should still be deciding how, and you know, how what comes into our home. So with regards to the gifts, it's kind of the same thing. Like, yes, this is a gift for you and yes, this is your money, but.

You know, some of this money needs to go towards, and then you get to decide, but some of this money gets to go to you. So again, you work it out with you and what works in your family. But if, if, for me and what we do, typically it's part of, it goes to, you know, long-term savings for them. But the other part of that is, We're very transparent with them with regards to their education funds.

So my kids know how much money they have saved up to go to college. So it's not like this money is then taken from them, and then they just feel like they were robbed. Like they know that like, oh wow, I've got these many thousands of dollars waiting for me when I reach this age, which I also think has a lot of value.

Like they, you know, I talk a lot also about, you know, wealth and wealth creation and all the rest. They know that. They've got money, which is kind of a crazy thing to like, at that age I had, you know, whatever money I made for my paper or, or what have you. But they know they've got thousands of dollars that is actually theirs.

Like there's like, it's in their name, it's theirs. I'm managing it right now, but it's theirs. So with regards to the money that comes in from the tooth fairy and all the rest, you know, you decide some, like one of the things that we do is for Halloween, After we let them go, you know, a little bit, you know, crazy with the candy.

I buy it from them and then the money that I, I, I buy it from them with, I tell them like, what do you wanna do with this? My son, he was like, I want you to put this in the bank for me. I was like, cool. Done. My daughter's like, I just wanna keep it in my room. I'm like, that's fine too. Like as long as it's safe, as long as it's in one of your jars, I'm okay with that.

And then she took five of it and went out to the book fair the other day and bought herself something and I was like, this is good. So, you know, you want to give them opportunities to make decisions with their money, cuz that's really, at the end of the day, what we're looking for is for them to, to feel like they have some control over their money.

Tiffany Grant: Yeah, I'll definitely say I learned my lesson with giving them full reign of what they do so, So my youngest son, cuz he's eight, um, so this was his birthday this year. Um, he got, I wanna say it was like a hundred dollars, right? And so I, what I should have done was taken half of that and was like, okay, let's put in your bank account.

We put the other half on your switch. Cuz you know, he likes to play video games and. My, I told my mom, cuz you know, we were trying to figure out how to do it and I was like, you know what, just put it all on his switch and he'll like, you know, spread it out. He'll go it out 

Clifton Corbin: slowly. Yeah. 

Tiffany Grant: He got away from me one weekend.

He would stay with my grandparents and. When he came back, he had nothing left. And I was like, oh my gosh. He just blew through like a hundred dollars. Cause I was like, you're going to want the battle pass later when it comes out again. You're gonna want, you know, v bucks, robuck, whatever. Um, so, you know, save a little bit, uh, but.

He did not. And I think he learned a lesson as well though. Um, because, oh, go ahead. No, I was 

Clifton Corbin: gonna say, you bring up a great point there, and I know a lot of parents also ask like, how do I even bring up the concept of saving or not? Like it's two things, one, When you want your child to like save, it's hard for them if they're not getting money on a regular basis.

Another, you know, another reason why the allowance is such a good thing, just so that they know money's coming. I don't need, you know, when you don't feel like, when you have that inconsistency with your cash flow, you feel like I either have to spend it all or I can never spend it. Both really bad habits when you're dealing with money management.

Another, you know, bonus for the, the allowance. But you gotta, you, you did exactly what I, I've been recommending with, when you want to talk about saving, it's, you're talking about what are the opportunities that you want to make sure you have money for, like, We're not gonna talk to our kids about retirement, cause that doesn't make any sense.

But you could talk to them about the opportunities that having money on hand will provide them. You know, your friends are gonna come and say, Hey, do you wanna go to the movies with me? But if I'm not paying for that, or I'm not gonna pay for the popcorn or whatever. But if you don't spend all of your money when that opportunity arises, you will be able to then take advantage of it.

So it's about talking about the opportunities that can. Uh, be afforded to them the options that stay open to them by not spending all their money. It's a great way to kind of raise that concept of saving and what you did. I also, I encourage too, cuz if they, if he's feeling the bite of not having it for those opportunities, well, he learned a lesson and that's also, that's also winning.

Tiffany Grant: Yep. And that's exactly what happened because when the, the next season or what have you came out and the battle pass was down, he's like, mommy, can I get the battle pass? And I'm like, do you have any money? I'm like, you know, and then I bought up, oh, remember when you had all this money on your switch and now you need it?

Um, and so it was a good learning opportunity. And so now he does save. So like for instance, now, you know, he got some extra money from like my grandparents or what have you. Um, we put in the bank and he's doling it out very slowly. Um, I wanna say it was like last weekend, he was like, oh, I want some pizza.

And you know, like a typical mom. Do you have pizza money? Um, and so he was like, yeah, we could use some of my money for that. And so I was like, okay, I'll split the pizza with you. And so, you know, he is been doling it out little by little now instead of like swooping through and, um, using it all. But anyway, thank you so much Clifton, for coming on the show today and just dropping knowledge about how to handle money when it comes to like, The four to eight year olds, um, and some strategies we could employ.

So if people were interested in learning more about these strategies or learning more about you, uh, how 

Clifton Corbin: could they find you? Uh, best place to find me is my website, so clifton corbin.com. Uh, if you wanna hear more about these strategies, I've written the book, it's called Your Kids Their Money. Uh, you could find it on Amazon or Barnes and Noble or.

You know, just go to my website, you'll see it there. Um, and like I mentioned, as far as like giving your kids, especially this age group activities or if you wanna find some play money or anything like that, if you go to my website, clifton corbin.com/workbook, there's a activity book, a workbook there that's free to download.

Uh, it's got activities about money identification and like. Doing some of the like early math with money. So many fun things in there and printable money in the back as well. So you can go there and download it, it's yours to have. So, uh, yeah, best places to find me to go to my website or if you want you can find me on, uh, Instagram at your kids, their money.

Yes. 

Tiffany Grant: Thank you so much. And we love freebies, so I will make sure that I will have all those links in the show notes so you can check Clifton out. And like I said, I appreciate all of the knowledge that you gave us. Um, you definitely gave me some ideas. Um, as to what I can do next. Uh, so thank you so much and I hope you have a wonderful rest of your day.

Clifton Corbin: It's my pleasure. Thanks so much. 

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