How to Turn Spending Money Into an Educational Experience

Interview With Joe Saul-Sehy

After working hard all your life, your desire is to leave an inheritance for your children. But how will your children be able to wisely manage what you have left them? Douglas Goldstein and Joe Saul-Sehy delve into this topic. 

Douglas Goldstein: I'm very excited to be talking to my good friend, Joe Saul Sehy. He is the host of the Stacking Benjamin podcast, and is a former guest on the Goldstein on Gelt Show. Joe, it seems to me that you know a fair amount about money. Do you ever worry what's going to happen when you get old? When you leave money to your kids one day, how are they possibly going to know what to do with it?

Will Your Children Know What To Do With The Inheritance You Leave Them?

Joe Saul-Sehy: I worry about that a little bit. I find that topic fascinating because I think it's a moral dilemma. I can't say that I've picked the lock on this in my own life. It's a fascinating topic that you bring up about how much ruling from beyond the grave we should do. After we leave this earth, should we tell our children exactly what they can and can't do with the money?

Douglas Goldstein: What I was thinking about really is when you're trying to get your kids ready. I'm against ruling from the grave. I think you have to teach your kids during your lifetime, and the question is, how do you do that? In my practice as a financial advisor, I often meet people who are wealthy. These people want to help their kids. They say, "Well, I pay for school," which to me, is a very reasonable thing to do. They also say, "I'm going to pay for room and board because I'm the parent." Then it seems to just to go on and on. "Well, I've got to get him a credit card just in case he needs something." Where does one draw the line?

Turn Everyday Moments Into Teachable Moments

Joe Saul-Sehy:  You have to turn everyday moments into teachable moments. We need to include our children every single time that we deal with money. Let me give you a couple of great examples. When our twins were young, we'd go to the grocery store and the whole time the kids were begging, "Can we get this?" What started off as a nice trip to the store became absolute Hell.

You get to the checkout aisle and there's all the candies and the gums and they want even more. You can turn that whole thing into one big teachable moment, teaching your children how to create a to-do list. You can go through the Sunday paper or go through some apps and look for coupons and discounts ahead of time.  You can also work on a meal plan from the beginning and then when we get to the store, everybody is on the same page, looking for all these items.

Most people don't realize this but if you look at the price at the grocery store, and almost every grocery store I've ever been in, there is a price per unit. What's funny is what looks like the best price may not really be the best price, if you compare that to the best price on the shelf. I taught my kids about the price per unit concept. We went around the entire store that day. My kids wanted to compare the price per unit for every single thing that we bought. In that way, you take something as mundane as a trip to the grocery store, and make it a learning experience.  We taught our kids how to be prepared, how to look for value, and how to buy just the things that we needed.

Douglas Goldstein:  My mother, as you may know, is a financial advisor. My grandmother was one of the first women to be licensed as a stockbroker in America. We were a family who spoke about money and personal finance.  In fact, my parents gave me a credit card and I was fairly responsible with it. 

Every time I would use the credit card, I would have to give the receipts to my father. I knew that he was seeing what the money was being spent on.  My dad told me “Listen Doug, now is the time when you should be focusing on your studies. I'm setting you up for that." It seemed a very reasonable thing for him to do. On the other hand, when I see parents hand off their credit card to their kid, I worry that they are ruining their child.

Does Your Child Need A Credit Card?

Joe Saul-Sehy: I used to be against credit cards until I met this guy, Bill Dwight, who has a company called FamZoo.com. Bill has five kids. Bill created this budget and basically, the kids get a FamZoo credit card for a very small fee. It's linked to Mom and Dad's account. Mom and Dad get to see all of the expenses that the child makes. You can also dole out allowances via that card. You can pay fake interest and you can figure out interest payments on phantom investments that you setup.

You could do all kinds of crazy things with FamZoo that I like. I was talking to Bill about giving your child a credit card, and I was like, “Your child doesn't need a credit card.” He said something very profound. That if you don't teach your children good habits about plastic before they leave the house, where else are they going to learn about it?

Your children may not need it but they need to learn the lessons on how to use credit cards efficiently.  That just because they have a piece of plastic in their hand doesn't mean they have any money.

Douglas Goldstein: This is what we did with our children. My brother and I are next door neighbors. My brother has six sons and I've got four children. We created a bank called “Uncle Doug's Bank.” The nephews started, and then eventually my kids came along and they would deposit money. I would also give them interest, so they would see a line item and they would learn the benefit of saving.

What’s funny is that decades later, our children still have accounts at Uncle Doug's Bank. But we are now more official. They have to fill in forms and we make it a little more tricky for them. In the last few seconds, Joe, tell us how people can learn more about your brilliant ideas?

Joe Saul-Sehy: The Stacking Benjamins Show is a show based on the science of play. We learn more about money as we play around. We have seven or eight different topics per show, but they're always light. Instead of being the last place you go, our show wants to be the place that gets you interested. Stacking Benjamins is wherever you listen to podcasts - Monday, Wednesday, and Friday.

Douglas Goldstein: Be sure also, to listen to Joe Saul-Sehy and me, and a couple of our other friends on the Money Tree podcast. Joe, thanks so much for your time, I'll see you soon.