NerdWallet's Smart Money Podcast - What Fewer Earnings Reports Could Mean for Investors and How to Teach Kids About Money (Video Episode)

Starting point is 00:00:00 Kids have a lot on their plate. There's reading, writing, and arithmetic. Then there's the whole, you know, becoming an adult thing. So when's a good time to start adding financial literacy to that plate? We'll talk with a listener mom about her kiddo money questions. Welcome to NerdWallet's Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles. And I'm Elizabeth Ayola.

Starting point is 00:00:26 Later this episode, we'll be talking with a listener about how. how, and of course, when to start setting your kids up for financial success. And a note before we get started, if you've always wanted to watch Smart Money and not just listen to it, your wish is granted. This is another special video episode, and you can find us over on YouTube. Just search for NerdWallet. All right, let's get to our weekly Money News Roundup, where we break down the latest in the world of finance to help you be smarter with your money.

Starting point is 00:00:51 Our news colleague, Anna Hilhaski, is back with us, and today we're talking all about how the rules of the stock market are changing. Yeah, you've likely heard about President Trump's stuff. tariffs, tax cuts, spending. We talk a lot about that here. But you might not be aware of some pretty big rule changes that the administration is making in the stock market. And those changes haven't gotten as much news coverage, even though they could have pretty big implications for companies and for investors. So here to give us more insight is Sam Taub, investing writer here at Norval. Sam, welcome back to smart money. Happy to be here. So listeners who have bought and sold

Starting point is 00:01:24 individual stocks are probably familiar with quarterly earnings reports. Publicly traded companies are required to disclose their latest revenue and profit numbers every three months. And these numbers can have a pretty big effect on the company's stock price. A good earnings report can send a stock skyward and a bad report can cause a crash. But I read in your latest investing newsletter that the Trump administration is working on a big change to how earnings reports work. Can you walk us through that? Sure. In short, the Securities and Exchange Commission may be cutting in half the number of earnings reports that companies have to release every year. Soon, companies may only need to disclose their revenue and profits every six months rather than every three.

Starting point is 00:02:04 Oh, well, that seems like a pretty big change to how the stock market works. How did that idea come about? Well, so last month, President Trump wrote a post on his social network, Truth Social, about how he'd like the stock market to switch from quarterly earnings reports to semi-annual reports. And then a few weeks later, the SEC confirmed that it's fast-tracking that rule change, which means it could potentially come into effect as soon as, next year. Now, a social media post from the president is a bit of an unorthodox way of changing

Starting point is 00:02:35 the rules like this, but the rule change itself, the idea of doing earnings reports every six months instead of every three, is actually something that prominent Wall Streeters like Warren Buffett and Jamie Diamond have been talking about for a long time. The European Union switched from quarterly reporting requirements to semi-annual requirements more than a decade ago, actually. And quarterly earnings reports weren't required in the US until the 1970s. So it's not a new concept per se, just new to the US. If this change actually happens, what would some of the pros be? What are some of the cons? Because quarterly earnings reporting is only a few decades old, and since some other large economies have already done away with it, researchers have a lot of data

Starting point is 00:03:19 to work with that examines how these sorts of rule changes shape company and investor behavior. In that truth social post, President Trump basically argued that quarterly requirements force companies to obsess over short-term results at the expense of long-term planning. And there are a number of studies that support that argument. For example, there was a pretty influential study published in the Accounting Review Academic Journal back in 2018, which looked at the behavior of public companies in the U.S. between 1950 and 1970. For context, this was the lead-up to when the SEC first started requiring quarterly reports. So this was a period when a lot of companies were just starting to do it. The study found that when reporting frequency increased, when

Starting point is 00:04:05 companies started reporting their earnings quarterly, there was a big drop in the long-term investments they made, so things like opening new factories, for example. And what about some of the arguments against switching to six-month reporting? So the main argument against this is that numbers like revenue and profits or earnings, as they say on Wall Street, are really important information. And making that information available less frequently means that investors are kind of flying blind more often. To go back to that same journal, the Accounting Review, they published a study in 2023 that looked at stock returns over the last 50 years or so, and it found, pretty unsurprisingly,

Starting point is 00:04:49 that a stock's earnings data is a very strong predictor of its future returns. One of the most well-known measurements of whether a company is undervalued or overvalued relative to its competitors is the price to earnings ratio, which, as the name implies, is the ratio between a company's stock price and its earnings per share over the last 12 months. If we halved the number of earnings reports that companies had to publish, these sorts of measurements could get less reliable. And some researchers think this could actually make the stock market more volatile rather than less. So there's definitely some downsides. You mentioned that this rule change is still in the works and that it basically started as many of Trump's actions have with a posts on social media. With that in mind, how likely is this to actually happen? There is still a big question mark around that because, as you said, President Trump tweets or posts on social media about a lot of stuff.

Starting point is 00:05:46 and he actually made a similar social media post on Twitter about switching to semi-annual earnings reports back in 2018 during his first term. And back then, the SEC started working on the rule change. They put out some proposals and collected public comments and whatnot, but that time it ultimately didn't go anywhere. Now, the second Trump administration has generally been a lot more active than the first one when it comes to making these sorts of changes. So my bet is there's a decent chance it'll actually happen this time, but we can't discount the possibility that it might fizzle out again. All right. Some of our listeners who pay close attention to quarterly earnings reports might be day trading stocks, or at least they may have tried day trading, or they may be thinking about trying it. And you also wrote in your newsletter that the administration is working on a big change to the rules about who is allowed to day trade, right? They are. The SEC has this thing called the

Starting point is 00:06:45 pattern day trader rule or PDT rule, which puts certain requirements on investors who buy and sell the same stock on margin that is using borrowed money during a single trading day more than a couple times a week. In other words, it applies to quite a few day traders. And what this rule says is that pattern day traders, people who engage in that stated behavior, are required to maintain a minimum account balance of $25,000 or else their broker has to restrict their account. And what is the SEC thinking about changing here? Basically, they're thinking about scrapping that $25,000 minimum balance requirement to day trade frequently. The Financial Industry Regulatory Authority, or FINRA, which is a professional organization of stockbrokers and other financial institutions,

Starting point is 00:07:36 is pushing to get rid of that minimum and replace it with a more flexible requirement, where, margin investors would just need to maintain an account balance of at least 25% of their open positions. This rule change is seen as a lot more of a sure thing than the earnings rule change we discussed before, in part because FINRA is already on board with this day trading rule change. And it could happen sooner, potentially before the end of this year even. And that could open up day trading to a lot of people who are currently gate kept out of it by the minimum and balance requirement, for better or for worse. I can see why a beginner investor who wants to try out day trading but doesn't have $25,000

Starting point is 00:08:19 lying around might be excited about this. But what are some of the risks involved? So the PDT rule was enacted in 2001 in the immediate aftermath of the dot-com crash when a lot of small-scale beginner traders got absolutely wiped out by this big crash in tech stocks. So the gatekeeping aspect of the PDT minimum balance rule is quite intentional. It's designed to protect inexperienced investors from the volatility of day trading, which studies show is a dicey affair that most people lose money on. All right.

Starting point is 00:08:56 Well, we've laid out some pretty big changes to how the stock market works coming soon. Where can listeners go if they want to keep up with this kind of news? We wrote about both of these upcoming changes in the most recent issue of NerdWallets' email investing newsletter, the nerdy investor, and we'll include a sign-up link for that newsletter in the show notes. We absolutely will. Thanks for coming on, Sam. Thanks. Always good to be here. And thank you, Anna. A reminder, we want you to send us your money questions. Do you want to know the smartest way to navigate market changes? Are you wondering what to do with your investments? Whatever your money question is, leave us a voicemail. You can also send us a text on the nerd hotline at 901-730.

Starting point is 00:09:38 6373. Again, that's 901, 730, and ERD. We love emails. Please send them to us at podcast at nerdwollet.com. In a moment, this episode's money question. Stay with us. We're back and we're answering your money questions to help you make smarter financial decisions. This episode, we're going to be talking with a listener who has questions about financial products for kids. Her name is Essa and she's here with us today. Welcome, Esau. Thank you. And we're coming live from a studio in Scottsdale, Arizona, where you live. And I'd love to hear what your favorite thing about Scottsdale, Arizona is and why you like to share it with your family. Right now, we get monsoon storms. And there's a nice break from the monotony of all this time, which I know a lot of

Starting point is 00:10:29 People can understand, but to have these, like, exciting thunderstorms and then finally some precipitation is too much treat. And you get these mess of dust storms as well. Yes. I feel like for the past two days or so that we've been here, I have experienced three different weather. So I don't know. But anyway, it's been a good experience so far. Now, my friends and family hate me because I am a deep diver. And I love your question that you sent us. Thank you for your question. And it centers around kids. So I have a little deeper icebreaker for you. If you could go back to your younger self and teach her one financial lesson, what would it be? I thought that was my question for you guys. I wish that I was more curious about it. And I think if I had had some curiosity there, then I would have become more

Starting point is 00:11:17 proficient earlier. But I just, it was not something I was interested in. And so I don't know that's necessarily a lesson, but if like there was a way to expose, you know, my younger self to this world before, then I think I'd be so much, you know, more adept at this point. And why do you think you weren't curious? What were your thoughts around money, I guess, for your younger self? Was it like, well, money's just going to make itself or it's not something I really need to think about or it's for someone else to think about? As far as like the basics, I got those. I got those down. Like, I knew how to save. I hated being in debt, you know? And like when I was younger, my goal was to see the world. So I did not want a car. I didn't want a house.

Starting point is 00:11:58 I just wanted to be debt-free so I could pick up and leave anytime. I wanted to. I think I was very good with managing that part of it, but I was not curious about making your money work for you. Investing. Yes. And actually, I do have one story. Right out of college, I had a co-worker, and he gave me an earful about how I should invest in that, you know, a mutual fund was a pretty solid way to go. And so this was a long time ago. So I might be missing some details, but eventually I did. I had some seed money and I put it into a mutual fund. And, you know, I was told, like, you just let it sit. You don't have to look at. You don't do anything with it. And then not like six months or a year goes by. And then I was informed that my mutual fund

Starting point is 00:12:43 had been sold to another company. And then now there was going to be a fee because it was such a paltry amount and so I got completely jaded and I'm like well I'm out forget this this is too hard I don't want to deal with this stuff and so it was a bit short-sighted on my you know on my end that's a common experience I'll say a lot of people especially back I would say in earlier years where there were higher fees and it was less accessible a lot of people would feel kind of shut out by the investing industry so I'm sorry that you experienced that but know that investing now is generally less expensive and a lot more accessible. Okay.

Starting point is 00:13:22 Yeah. So thank you for sharing that. I'm sure that was pretty vulnerable. And I think that's a beautiful segue into why you wrote us. So tell us a bit about your kids and what you're trying to do for them in terms of financially or rather equipping them with the financial education they need to make their own decisions as they grow. I have two daughters and they are almost 15 and 10.

Starting point is 00:13:44 And to date, they're kind of like me. They're good with their allowance. and saving and we have green light set up for them green light's an app where you can manage their finances together yeah like it uh you know we do all of their allowance through that and then i did recently find out you can do savings goals so you know there's some of that kind of built in already and i'm you know pushing them to to explore those a little bit more we gave them an allowance pretty early on and then immediately we're told them like half of this allowance is going to savings and then my husband invests that along with some other, you know, money annually.

Starting point is 00:14:23 How much are they getting for their allowance? And are they like chores they have to do or is it kind of like a weekly, monthly thing? No, they have to do chores. I always find that interesting. Sometimes in the parenting world, that's controversial because people are like, you shouldn't attach chores because you're a team and, you know, two allowances. So that's interesting. Also, that's how you are earning money too.

Starting point is 00:14:42 Growing up, we had a chore wheel. And so my sisters and I would use tackle like, okay, you get the upstairs bath. You get the kitchen, whatever, and that's how we would earn our allowance. Do you have something similar in your house, or how does that work out? Well, it's kind of a hybrid, and I understand the controversy because you do want to, you know, them to think of like, okay, we're all team. We all have to work together. Yeah.

Starting point is 00:15:03 So we have it as we're a team, but it's also required. I love it. I love it. That's being in a family, right? Yeah. Like you can't, even if, you know, you're not going to get paid if you don't do your allowance, but you're also going to lose other privileges. as well.

Starting point is 00:15:18 So, and honestly, like, because we started it so young, I think it's just, they get it. Like, they don't love it, but I have seen a transformation in them in, like, the amount of angst, you know, you know, that that causes them. Yeah, they're just, yeah, okay. How much are they getting? So we have done the dollar equivalent to their age. Okay. And that's, you said weekly? Yes.

Starting point is 00:15:46 Okay. Yeah. But then they only get half of that, right? Yeah. To spend. Do they know where the other half is going? Because I know you said you invest it. I don't think they do. I think that that's something we need to peel back the curtain on so that they can see that and see what's been happening since they were, you know, three or four.

Starting point is 00:16:06 So are there any other kind of formal ways that you've been teaching your kids about money besides the chores and the allowance? Just this past year we started doing a clothing allowance. And so they each get about $200 a year, and they have that for the year. So they can buy everything they want at once. Like my daughter just dropped $118 hot topic the other day. And I was like, boom. Yeah, I was going to say you could buy one juicy track suit. Maybe just a pair of pants from juicy couture.

Starting point is 00:16:36 And it's hard for me because I'm a thrift shopper, you know. I'm like, let's go thrift shopper. Like, thrift surfers. But that's a lesson, you know. I'm eager to see how that plays out. Have they ever run into a situation where they spent all the money, but they actually needed like maybe a new pair of shoes or a new jacket and they spent that money and they couldn't get it?

Starting point is 00:16:53 That's all part of the process. They can use their allowance to supplement their closing if that's what they want to do. So that's happened too on occasion. We also did a room decorate this past year. We've been moving around quite a bit in the last four or five years and they've never really had their own space that they wanted it. So we gave them, it took a change, and we said, here you go. And, you know, start searching.

Starting point is 00:17:19 We went to consignment stores for a lot of the furniture and whatnot. And then they, you know, we broke things down in Excel and said, well, if you buy this mattress, this is how much you're going to have leftover versus you buy this one. So I think that was really, you know, good. It probably, well, I don't know. I know it, my oldest daughter is probably more able to digest some of the less. I was going to ask how they responded to that. Did their eyes just glaze over when they saw a spreadsheet?

Starting point is 00:17:48 Or were they engaging with the numbers? They engaged with them when they saw how quickly it went. You know, we did a lot of online searching at first, and then they saw how quickly it dwindled. I think it was really informative. The final one, which is a departure from maybe what most parents do is, so I have for the last 18 months, been tracking all of our expenses. The credit card makes the way your expenses are, you know, output in. to excel and makes it very easy to do, but you have to do some cleaning up of the data. And so I had her do there about four, I had my oldest daughter do about four months of that.

Starting point is 00:18:24 So she could see what we were, where we were spending and which, you know, how much is that needs and how much of it's once and how much of it goes into our savings and whatnot. And so I would really like her to adopt something like that. I know it takes time every month, but it's been really helpful for me to get. a grasp on like what where our money is going yeah so I'd like to ask at a higher level what are the primary goals if you had to break out maybe two or three goals that you have um for your kids in terms of their financial education what would they be like I mentioned before I'd like them to stay curious I understand I'm not going to be able to teach them everything but if they

Starting point is 00:19:06 can you know recognize that there are resources out there that they can take advantage of like I feel like they would be ahead if they recognize that there are people that they can talk to that know more about it. If they don't, you know, have a sort of innate interest in it, then I think that would serve them well as well. And then I also want them to realize that, you know, knowledge is power. And, you know, in my situation, I was very fortunate to meet my partner. And he was just off the charts. He's very good with money. He's a little older than I. I am. He had kind of it all figured out. And so I just kind of jumped on his coattails for the last 20 years. And I don't necessarily think that's an approach. I want them. I don't want them to rely on luck, you know. So if they get into a relationship, I want them to be able to, you know, recognize, you know, where there could be red flags, you know, or, you know, help their partner, you know, that kind of thing. Yeah. Well, sharing your household expenses with your older daughter, I think is a good step in that. direction. Something I'm thinking about too, and I want to hear a little bit more about your goals,

Starting point is 00:20:16 but something else I'm thinking about is how a lot of what we learn about money, we aren't even really aware of what we're learning. We're learning kind of through osmosis of seeing our parents and our families do things through the way that money is described in the household, whether it's something that's really scarce, even things that aren't talked about around money and sort of the subconscious things that are going on in the home. What do you think your kids might be getting from how you and your husband have been managing your finances and how you've talked about it amongst yourselves and even with them. What do you think lessons they might have learned or even the values they might have

Starting point is 00:20:47 absorbed from you? I'm very open with like the way that we shop. You know, I tell them what our monthly budget is for groceries, you know, and then, you know, I update them. Yeah. Not all the time. But I'm like, oh, we have to wait until the next grocery trip because we've used our money this week.

Starting point is 00:21:03 And then, you know, like I say, I'm very frugal shopper. I don't buy a lot of stuff. I tell them, like, you know, what I do is I make a list of my wants as they come up. And then I keep an eye out for them at the thrift store or a consignment store. And then sometimes I just forget about them. We also, you know, kind of have this money powwow about the allowance and their clothing allowance. They can pipe in and give us their thoughts, you know, as well. So you're teaching them to have open dialogues around money.

Starting point is 00:21:38 Yeah. maybe that wasn't something that you had before. So you want to emphasize that. Right. The hardest stuff, like the investment, you know, that, that conversation doesn't really happen. And I don't know. I'm not sure how we would tackle that. Okay. So tell us a bit where we can help you in terms of questions that you have in terms of maybe how to start having that conversation with your kids about investing. I know you wrote to us and mentioned maybe having discussions around saving for 401K. Is it too early to do that? So can you go ahead and ask us what you want to ask us around that? I kind of like, as I was distilling this down in my head, I'm like, is this really a conversation you need to have with an adolescent psychologist? You know, because it's like, how do you make them want to do something? I want to say, I don't think, especially coming from someone whose mom didn't talk to her much about investing, but my mom was investing, I don't necessarily think it's about making them do it,

Starting point is 00:22:33 right? Because they're going to make their own financial decisions when they grow anyway. I think you're doing a wonderful job in terms of equipping them with the information. But had I known these things, I could have applied them when the time was right to apply them, if that makes sense. And I know that you mentioned one of your daughters is 14, so that's four years away from potentially going to college and living out on her own, maybe another eight years away from getting her first job. And I think, you know, depositing those seeds now is not a bad idea, even if it's in small doses, even if she doesn't fully understand it, just having the concept of it gives. or something in her toolbox to use later. I don't know if I'm worrying too much about like those things that you get after you get a job,

Starting point is 00:23:15 you know, like how to negotiate your 401k plan with your employer and matching funds and health insurance and investment plans and that. The credit card thing is coming up on the horizon. And I'm not really worried about especially my oldest abusing that. but I still want to give her a taste of it. And I also wanted her to understand why it is important to build credit, which was not something that I was aware of when I was younger. I know that you wrote and said that you didn't necessarily want to make her an authorized user on one of your credit cards.

Starting point is 00:23:54 So can you talk to us a bit about that? Because that is one way that she can learn in real time about credit. You seem to be excellent about doing things with her alongside her versus just preaching at her. So it sounds like there's an opportunity there for you guys to do that together. So what are your reservations? I mean, I could show her what we do, but I was kind of hoping that we could have like some sort of simulation where she would actually have, you know, be required, you know, on the 30th of the month or whatever to make a payment. You know, even if it's like some pretend payment. It's like, I don't know what the equivalent of SimCity is today.

Starting point is 00:24:32 Great game. so that she could feel like the real-time sort of consequence. Like, oh, you know, I didn't pay. And now I have this extra interest that's been applied. So because we are very good with our credit, like I don't know that she would see the repercussions of, you know, not staying up on it. Well, before I tell you like a couple of maybe potential games or simulations, as you mentioned, that she could or you guys could consider doing together. What do you think is her money personality now at 14, almost 15? Oh, man, she is, what's a nice way to say tight? Like, she's very tight. Like, she often will negotiate, like,

Starting point is 00:25:14 I think this is something that you pay, you should pay for because it's, you know, X, Y, and Z. And so it took me a while to, like, kind of catch out to that because you're so used to as a parent just paying for everything that they do, right? But she can still spend her money at Hot Topic, so she's willing to have some fun with her money. So that was my youngest. Oh, the youngest. I see, I see. My oldest, she goes to, she goes Goodwill and she goes to Ross.

Starting point is 00:25:39 Like those are her big, you know, where she likes to shop for clothes. Yeah. So for context, if you added her as an authorized user, each credit card issuer is different in terms of the age that you could do that. So it could be anywhere between the ages of 13 and 15. You're right. There is the risk that she could affect you guys as credit if she didn't pay on time. But I think there are so many guardrails you could put around that, like checking how much she's spending weekly. And like you said, she's very tight, so it doesn't sound like there's a high risk of her overspending.

Starting point is 00:26:07 But aside from that, if you don't want to go that route, which is understandable, you could use the bite of reality app. There's also the next-gen personal finance platform. You have the Uber game by the Financial Times. And there's also a platform called Everfi, which offers resources and games as well that she can use. And the good thing about all these resources is they give you real-life scenarios where she could see what happens if she overspends on a credit card. And maybe they give her a budget. and she has to work through it and, you know, pay off some debt and do other things. So these are some activities that you could do with her that will give her some kind of

Starting point is 00:26:39 real-life experience of what it looks like to pay down debt and stay on budget. And one note on the authorized user thing, you can add her to your credit card and just not give her a card at all. But that would help her build a credit history, which is one of the most important things in terms of establishing your credit. My former co-host on Smart Money added her daughter to her credit card. and the daughter actually had a credit history older than she was. So you can do things like that, so you can set your daughter up for success without the risk of them spending money and maybe not paying it on time.

Starting point is 00:27:13 So that's an option too. Yeah. So I'm confused. So you put, they're on our same account, but they have like their own credit profile. Yeah, tied to their social security number. So it helps them to start building credit. Yeah. Oh. Yeah. Okay. Good to know. So what are your thoughts on that? Are you still maybe not or is something you'd be open to?

Starting point is 00:27:36 Yeah. No, I think that would be certainly something we could consider. I do like the idea of still like the simulation games. Of course. Yeah. And we'll follow up with some more information around those different tools that you can use. But another thing that you might want to consider as your daughter gets closer to 18 is a secured credit card. And with this, you have to put down a deposit and the deposit is basically the credit limit. And so this is a smart way to build credit and to make it so that they can't spend too much money. They're not going to be getting like a $10,000 credit limit unless you put down all that money. But that way they can manage it in real time themselves. You could do a bit of handholding for the first couple months saying, okay, when's your bill due? Here's your statement. Let's look at this together. That might be a nice way to actually do it with a real credit card, but have it still with some guardrails on it. Yeah. I started a secured credit card, not as a teenager at 20-something when I moved back to the U.S. And it was really helpful because I had to put down my own money as the deposit. So it really helped me to learn how to use credit cards responsibly.

Starting point is 00:28:39 Okay. And those are issued by all the banks? By several, yeah. The Nerdwalt has a roundup and articles about this. So you can look into that on the website too. We've talked about a few different options so you can help your kids learn more about their finances and actually be more proactive and hands-on managing their money with a secured credit card or other options. What do you think would be maybe the most effective for them?

Starting point is 00:29:01 and what would you like them to get out of this? I essentially want to prevent them from getting into credit card, deep credit card debt once they leave the house and we are no longer, you know, looking over the shoulder all the time. So I'd like them to, like, experience that so that they're aware of how it works and they aren't surprised by anything. Something else I'll encourage you to talk with your daughters about is the idea of financial. goals. And I think viewing money as a tool to get what you want out of life can help encourage them to, as you were saying, stay curious about money and think, okay, maybe your daughter wants to move abroad for a year. What amount of saving is it going to take to have that be possible? What's the right tool to use to save? There are all sorts of different savings

Starting point is 00:29:50 vehicles that they can use. So by starting with, here's what I want out of life. Money is going to help me get that. What kind of tool can I use to get there? It begins to sort of have this spiral of, okay, there are all these different questions that come from just this one thing I want to accomplish and money will help me get there. So that would be something to talk about too, is longer term beyond college maybe. What's money going to do for them? Well, that's good. Actually, just this morning I was talking with my oldest about that because she's turning 15 in a couple days and she's going to be driving, you know, in a year. And so I have said, okay, well, so I looked up the average, you know, price of adding a child to insurance. Expensive. Yeah. So you need to start

Starting point is 00:30:32 saving now. And so I talked about, and I have been talking about the spending goals on green light. She's just been kind of like, oh, can we do it later? But now I'm like, okay, now you have something that you know you're going to want in a year. Let's look at how you're going to get there. I love that. And it's something that she wants versus something you want for her. So there may be a bit more of a driver there. I was also going to say, I know you said earlier about kind of making them more curious to want to learn about personal finances. I took a Khan Academy course during my early days of personal finance. It's a free course and it teaches you all the fundamentals. So that's budgeting, saving, debt, retirement and kind of all those foundations. So maybe that's a course that

Starting point is 00:31:14 you guys can do together. It's interactive. You have videos. You know, you can answer some questions just as a way to kind of incorporate family learning as you're already doing such a great job with. Okay. Yeah, I am actually taking that course. You're on it. Well, I know what I'm on unit two. The podcast is just a really nice way for me to

Starting point is 00:31:36 because it just fits into my life so well when I exercise or I'm walking the dog. You know, the course, the online course, I have to sit down and go through it. So that's a little harder. But I'm, I'm, I'm I'm working on it. Yeah. Good job, mom.

Starting point is 00:31:50 So what do you think your next step will be in terms of talking with your daughters and setting them up? Where are you going to go from here? So next steps, I think I'm definitely going to push the savings goals for both of them. I'll have to talk a little bit more with my youngest about what that might be. It might be another trip to a hot topic. So that's one thing. I would like to, like I say, expose them more to, like, the investments that we've done so they can see how that works and, you know, how my husband manages that. And then also to show them, like, you know, you put this much money away every week.

Starting point is 00:32:35 It doesn't sound like, you know, seven bucks doesn't sound like much, but look where you are after, you know, 10 years. Yeah. Yeah. And cool you can use to really bring that to life as nerd wall as compact. interest calculator you can put in oh i'm putting in seven bucks a week or however much a month what's that going to look like with the average rate of return over 10 15 20 years there's a nice graph on that page too and it really shows the power of compound interest so that that can help make it a little bit more tangible okay that sounds good i also feel like you know now that we're

Starting point is 00:33:06 talking about saving in the hundreds of dollars like maybe getting her hooked up with like a high interest savings account at this point so that she could see, you know, kind of how that works. Yeah. Yeah. And then, like I say, I think she has the savings down. I think, well, I'm going to try and get her to track her expenses. Yeah.

Starting point is 00:33:27 You know, I've got the whole Excel spreadsheet set up. Yeah. We'll see how that goes. And there are other tools that might be more friendly to your daughter's style. Yeah, like using an app of some sort. They're all sorts of apps that are even kid oriented to. So playing around with those might make it less of a hurdle to be entering something into a spreadsheet. It can sync with a bank account and that way it's just automated too.

Starting point is 00:33:50 Okay. And also it might be nice for your daughter to help her feel empowered in the process to show her different types of budgeting systems and see what resonates with her most, right? So that she can feel like, you know, she's doing it in her own way. I haven't raised a teenager yet, but I hear that they're very opinionated and assertive and want to do things their way. So this might be a way to make her feel more enthusiastic. And it's just been lingering on my mind, the 10-year-old with the Hot Topics. I once had a friend who the way that they would get their kids excited about investing and they were pretty young was by letting them buy a stock in the company that they really like.

Starting point is 00:34:24 So if she is a Hot Topics lover, it could be, hey, let's put, I don't know how much the stock is if it's 10 bucks. Let's take some of our allowance and put 10 bucks on that. And now we get to invest in a company that we really like versus just consuming. Okay. Yeah. That sounds intriguing. Yeah.

Starting point is 00:34:40 And that sounds like a good father-daughter bonding thing as well. What about all the other stuff that comes after college? You know, they're not in the home anymore. They're not 14 anymore. They're now 20, 21. Is that something like we just plow through as it arises? I'm going to give you another real-life scenario that an ex-minded that I thought was very clever. So what he would do is he would match whatever.

Starting point is 00:35:10 his kids invested. So if they invested $10, he would match them $10. And I think that's such a great entryway to teach them about 401K matches, right? So if you contribute this, if you, you know, your employer might contribute that. So I think just introducing them, maybe that's another thing for you and your husband. If you do 401K matches, just talking them through how that works. So I think it's about introducing it first, right, in a way that they understand at their age level. And then they can apply it later when it becomes more relevant. Okay. I like that. Yeah. I think my husband, like that too. Yeah. It's a great tip. Yeah. Okay. Well, Esa, thank you so much for coming on and talking this about teaching your kids about how they're going to be managing their money. I know that

Starting point is 00:35:50 there are going to be some ups and downs over time. And at a certain point, the kids got to make their own mistakes too. And that's a valuable lesson to learn. But it seems like you're doing all the right things and telling them up for success. Yeah. That's encouraging to hear. Thank you. You're doing a great job, mom. Yeah. Keep us posted. We can't wait to hear how this goes. If you enjoyed our conversation and you're interested in getting a financial strategy tailored specifically to your needs, then you may want to consider working with a financial planner. You can get matched with a financial advisor for free using NerdWallet Advisors Match. You can find a link to that in today's show notes. And that's all we have for this episode.

Starting point is 00:36:24 Remember listener to send us your money questions. You can call our text us on the Nerd Hotline at 901-7306373. That's 901-730 Nerd. You can also email us at podcast at NerdWallet.com. And of course, we would love for you to join us next time to hear about whether it makes sense to quiet, quit your job. Until then, we want you to follow us on all of the platforms where you listen to your podcast, whether that be Spotify, IHeart Radio, or Apple Podcasts, to automatically download new episodes. Here's our brief disclaimer. We are not your financial or investment advisors.

Starting point is 00:36:58 This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. This episode was produced by Tess Vigland and Anna Hawoskey. Hilary Georgie helped with editing. Nick Carysamy mixed our audio. And a huge thank you to all of our editors for all of their help. And with that said, until next time, turn to the nerds.

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