Last Wednesday morning, I was interviewed by Joe Orlando of the Sacramento Fox40 local news station. The segment was part of a series on how parents can avoid the summertime “brain drain.” One way is to use the summer months to teach your kids the practical skills they don’t typically learn in school — like personal finance.
Here’s the video followed by a transcript:
Paul: Kids, they pick up the video games and they put down the books.
Sabrina: It happens that there are things parents can do to keep their kids learning this summer. Joe Orlando introduces us to inventor Bill Dwight. He is here to tell us about his new virtual banking system.
Joe: I thought that brain drain was what I got because my kids were home all summer, that’s what I thought I got. Bill thanks for joining us this morning.
Bill: Yeah, thank you for having me.
Joe: I appreciate your time. I’ve always been one of those parents if you want something in the house, you know my daughter, she’s home this summer. I said do you want to make some money. She’s like yeah, dishes every day, $10 that week.
Bill: Well, that’s the thing; it’s a very personal decision. The important thing is that your kids have some of their own income whether it’s through allowance or working for chores or outside jobs or even just picking up change in the sofa but they need to make their own decisions. So we have a site famzoo.com that helps parents teach their kids good personal finance habits with our online virtual bank.
Joe: So I’m a parent, give me some tips, things I can do.
Bill: Well first, give them some of their income to spend and then split it between spending, saving, and giving. That’s a great personal finance tip. If you pull out first for saving and giving and investing and then spend what you have left you’ll be a great shape.
Bill: The next thing, as a parent, you should encourage your kids to save so give them some incentives, maybe match their savings or match their giving or give them some accelerated interest. That’s where the famzoo.com comes in because you run your own bank and you’re the bank manager so you handle deposits, withdrawals, and payments. And you can also give them a very aggressive interest rate, much better than what you get down at your bank.
Joe: My daughter has decided she is saving because she wants to buy an Escalade for $70,000 so that’s a lot of dishes.
Bill: Well, on the site, what you can do is create a savings goal for her and you can show her just how many decades it will take to save for that Escalade.
Joe: Nice, I like that.
Bill: Because I did that with my daughter, she wanted a new Jetta.
Joe: You did, what did you do?
Bill: So we entered a savings goal and she was like okay, I get it. Now I don’t want a new Jetta.
Joe: Now you are seeing right behind us here, if you just want walk us through this a little bit.
Bill: That’s a savings goal right there.
Joe: What are we looking at?
Bill: This kid wants to save for an iPad and he’s realizing you know what; that’s going to take over a year, which is basically an infinite amount of time for a small kid.
Joe: Sure, sure.
Bill: So then, they go in and say well hey pops how about you give me 1% interest on savings.
Bill: How about I babysit every week and make $10.
Bill: Well then, I can bring it in to November.
Joe: Well, not only that, this is a little family time because you are working with your son or your daughter and you are working together on this and you know, it gives you a little bit of time together and then that way when he or she grows up they’ll have a feel for how to manage their money.
Bill: And it’s not something they’re teaching in the schools.
Bill: And it’s intimately intertwined with your values.
Bill: You say you don’t do allowance, that’s fine.
Bill: Don’t be swayed by what your neighbors are doing. Do what’s right for you, your family, and your financial situation.
Joe: Okay, any final advice in the last 10 seconds here Bill.
Bill: Well, come by, check it out, and you’ll love it. Here’s their online banking record here and teach them now before they get out of the house.
Joe: I like that. All right, thank you so much Bill. Guys, I think this is an outstanding thing for the kids.
Paul: Oh yeah.
Paul: Kids learning that money is attached to the amount of effort required to get it.
Joe: Yes, gee what a novel idea Paul.
Paul: That’s really great and by the way Joe, the daughter that wants to get the Escalade, she’s going to be a junior next year.
Joe: She’s going to be a junior.
Paul: Yeah, that’s what I thought.
Joe: Yeah, let’s break that down Paul – how many years and how many dishes?
Paul: You know what, that screen behind you is not big enough for the graph that we would be required. 7:21 at FOX40, thanks guys, that’s a great program. Let’s check weather now Dennis is looking at a hot day ahead.