How to Talk to Kids About Money

Moderator:

    Amanda Agati
    Chief Investment Officer
    PNC Bank

Speakers:

    Emily Bouchard
    Head of Hawthorn Institute for Family Success
    PNC Private Bank Hawthorn

    Jeanine Fahnestock
    Senior Vice President
    Deputy Executive Director
    PNC Grow Up Great®             

Webcast Transcript:

Amanda Agati: Good afternoon, and welcome to the final webcast in PNC's 13th Annual Women in Business Week. What an absolutely fantastic week of inspiration and information for women financial decision-makers. I hope you were able to join some of the other webcasts this week, and thanks so much for joining us for today's session.

I'm Amanda Agati, Chief Investment Officer for PNC's Asset Management Group. And I'm so excited to be with my wonderful PNC colleagues today who will share their expertise when it comes to talking to kids about a very big topic, money.

Luckily, I do not need to tackle this topic alone because joining me today are Emily Bouchard from PNC's Institute for Family Success. Emily is a bonus mother of 44-year-old and 42-year-old stepdaughters and a step-grandmother of three, ages 23 and 17. So clearly, a subject matter expert. Jeanine Fahnestock is joining us representing PNC Grow Up Great program. Jeanine is a mother of an 11 and seven-year-old.

We also have MJ Roach, a financial advisor based in Pittsburgh. MJ is a mother of eight kiddos, eight, truly a subject matter expert, spanning the ages of seven to 30, and a grandmother of three. And last but certainly not least, is Natalie Talpas from PNC Digital and Payments Group. Natalie is a mother of two, eight, and ten-year-old boys.

Today, we're going to hear tips from our panelists on how to talk to kids about the importance of earning and saving money, how to manage their own money, and how technology can play an important role. I'm a mother of two daughters, ages 11 and seven, so these are certainly topics that hit very close to home for me as well. And let's be honest, ensuring we instill good values and attitudes about money can certainly feel daunting. There's just so much to consider. The good news is there are plenty of available resources and subject matter experts like our panelists today right here at PNC.

As I was preparing for this event, I thought I'd do a little market research of my own. So naturally, I turned to my in-house consultant, my seven-year-old, and I asked her, what is the most important thing you think kids should know about money? She, without hesitation, replied, 'How to get more of it. I think we'd all like to crack the code on that question and certainly have some answers for you, hopefully on that front.

For me personally, I worry less about teaching her the mechanics of how money works and much more about good spending, savings habits, and investing for our future. Many of the topics that we'll cover here together.

It seems especially tough nowadays, since we can all simply push a button on our phones and stuff magically appears at our front door. So without further ado, let's dive right into our very timely session here. I have a whole list of hard-hitting questions for my panelists and I want to get right to it.

So I'm going to start with Jeanine in the hot seat. Jeanine, this first question is for you. Research has shown it's important to start addressing these topics at a very young age. In fact, behavioral researchers at Cambridge University encouraged parents to start teaching their kids about money as young as three years old. I can't even fathom and I'm way behind the curve as it relates to that bogey.

So, Jeanine, tell us, can you give us some thoughts around PNC's Grow Up Great initiative - Of course, it's PNC's Early Childhood Education program and really why learning about money is just so important for younger children.

Jeanine Fahnestock: So, Amanda, thank you so much for having me. My role at PNC is to lead our signature philanthropic initiative. PNC Grow Up Great. As you said, it is a bilingual school readiness initiative to help prepare children with a particular focus on underserved children from birth to age five for success in school. Because we know that if they are successful in school, children are more likely to be successful in life.

So through the program, we're really aiming to provide very innovative opportunities that assist caregivers, families, parents, early educators, even community organizations with opportunities to enhance the learning and development of the young children in their lives.

So PNC has been as part of this early education work for nearly 20 years now, and we launched PNC Grow Up Great back in 2004 because we were looking to focus our philanthropy. And the more we learned about the positive impact that high-quality early childhood education can have on a child's lifetime trajectory, the more we became convinced that this was the place where we could make a difference.

So at PNC, we really view high-quality education as a workforce development tool and one of the most powerful tools for economic development and empowerment. Now, Amanda, when you were introducing the panelists today, you used the term expertise a lot. And I think it's important for me to acknowledge that I am not an expert in early childhood education because I work at PNC. I sometimes joke that I'm a banker. I'm not that either.

But what's important for everyone to know is that my colleagues and I rely on true experts in the early education field, and we've been doing so with experts from across the country to help guide our work.

Sesame Workshop is a really good example. Sesame is the nonprofit organization behind Sesame Street. They have been a gold standard in the field for more than 50 years now, and we have been working with them since the beginning of Grow Up Great back in 2004. And in all that time, we have launched series after series of bilingual multiple media resources that just highlight the simple fact that learning can happen everywhere, anytime, anywhere.

And so it was a little more than ten years ago that we talked with Sesame about this idea of financial education for the youngest children. We are a bank, we're an early education, but we didn't know a whole lot about this topic. And so Sesame did as Sesame does. And they started researching it and they found a dearth of content available.

So they did their own focus groups and they did their own research through other means. And they found that caregivers and educators alike wanted to be able to talk with young children about the topic of financial education, but they lacked the know-how to do it. And so that's really why we decided to launch a joint initiative with Sesame. It allows caregivers and young children to share experiences in developing the financial basics that are going to help them now and in the future.

Amanda Agati: I'm still sticking by my story that you're a subject matter expert. You're absolutely my go-to, so too bad.

Jeanine Fahnestock: I know a little bit.

Amanda Agati: That was great. Thank you. You mentioned you're just barely touched on this financial education initiative for younger children. So want to just ask as a follow-up, I believe it's called For Me, For You, For Later. Can you dig into it a little bit more and give us some more thoughts on it?

Jeanine Fahnestock: That's right. For Me, For You, For Later. The full title is For Me, For You, For Later: First steps to Spending, Saving, and Sharing. And the initiative was built on this idea that starting early does help children build the foundation to become financially responsible adults.

Now, for me, the beauty of early childhood education is that everyday moments can be learning moments, whether that's bathing your child, there's learning in the soap bubbles, or maybe you're walking through the grocery store. Learning can happen as you're picking your fruit. Anytime, anywhere.

So chances are that parents are already helping their young learners practice these skills to become successful or have good financial habits, I should say. It's a lot like developing healthy habits, like brushing your teeth.

So these For Me, For You, For Later resources that Sesame developed are really for children from the toddler years to about age five. And they present concepts that help build good foundational knowledge.

So let's talk about choices, as one example. Making good choices leads to thoughtful decision-making later in life. And we know that children love to make choices about what they're going to wear. And so that's an opportunity where parents or caregivers can really help them understand the why, the reasoning behind their decision making. Maybe if they're selecting a top, you want to help them understand is it because it's their favorite color, or if they're selecting a jacket or shoes to wear outside, is it because of what the weather looks like outside that day.

Another important concept around choices is getting kids involved in family decision-making, and that can be as simple as explaining to them why you selected this item and not that item in the grocery store. Maybe because it was on sale, so it's going to cost you less money that day. Maybe it's because it was a healthier choice.

And then value is another really critical concept. And for young children, that can mean how important something is to you. So little kiddos love their toys, they value them. And so young children can understand that their favorite teddy bear is more important to them than their set of building blocks.

Another way to explore value is by looking at community helpers. It's a great way to introduce this idea of earning. Earning or earning money is sort of the value of working, and it helps us be able to buy the things that we want and need. And then of course, money is part of everyone's lives today, whether it's real money or plastic. So helping children practice three very simple skills; Spending, Saving, and Sharing truly builds a foundation of financial basics.

So - I don't know, Amanda, I think this gives you a sense of the concepts that are presented in For Me, For You, For Later. They come with all of the right language for young children and some very practical ideas to show that everyday moments can in fact become financial learning moments for the little ones in your life.

Amanda Agati: I love that. Such practical advice. I definitely need to coach my seven-year-old on her fashion choices. [Inaudible], that's not the topic we're here to talk about today, but love that. Thank you. I'm curious on the practical element or practical side of things. Have you used any of these resources with your own kids? Anything in particular that resonated with them the most or what lessons might have stuck now that they're a bit older?

Jeanine Fahnestock: Sure. So my first child, my son was born just after For Me, For You, For Later launched. And so we really started drawing on these concepts early during the toddler years. And I think probably what resonated for our family the most was those three basic things saving, spending, and sharing. We love the sharing concept and we've really tried to convey the importance of that to our children.

I think one of my favorite memories of my daughter - she was probably two or three, and I can remember that she was sort of pulling her little red wagon down the street and it was filled with her favorite cereal and her favorite snacks. And we picked it out, everything up at the grocery store that morning. And we were delivering it to the neighborhood food drive.

So it was just a - even at the age of three, they can learn those really important lessons. The lessons do come from all around too. Just to give you one more example, my parents, they help out with the kids a lot, and they've been really good about helping my children earn real money by doing simple tasks at their house, like picking up sticks in the yard. And so my kids know that when they come home from grandma and grandpa's house, that money goes into their piggy bank so that they can save it and then use it later for a longer-term goal.

One other thing I think is important to mention is just modeling good decision-making as a family. We are all busy. Most families today live very busy lives and we rely a lot on takeout. And that becomes really expensive. And so we try to rein that in on occasion. And so we'll have to explain to our kids, this week or this month, we're really going to - we may want to get our food from our favorite restaurants, but we don't need it. And by cooking at home, it's going to help save us money. And it's probably a little bit healthier, too. So the lessons continue today, even though they're a little older. But as they age, I know I have so much more to learn and I'm excited to learn from my fellow panelists today.

Amanda Agati: That's terrific. Thank you so much for those practical use cases, for sure. I'm sure they can all resonate with each of us. So I'm going to take you out of the hot seat for the moment and spare you from the interrogation. Let's turn things over to Emily next.

Once those early building blocks of understanding are established, that foundation is starting to be put in place. What comes next, in your opinion? What's really important for us to focus on as it relates to school-aged children? What should they be thinking about and how should we be working with them to educate them?

Emily Bouchard: Oh yeah. It's such a huge area to focus on because these children in school are becoming exposed not just to what they're being educated about in school, but also what their peers have access to. And they start getting much more - they're digital natives already. They understand this whole world that is available to them online and so do their peers.

The more you can empower your kids to understand what the reality is that you all have and create your own family narrative, the better. And so really empowering you all as parents in terms of, Wow, let's look up Zillow and see how much our house is worth and how does it compare to other houses in the neighborhood. And go on there with your kids and help them understand how to navigate that, and then how to manage questions that might come up - that they might be asked by other friends.

And also how to be respectful of other friends if they become aware of information about them and their lives, because people can be quite private about money. And to be able to talk openly as a family about your money and your level of affluence or your level of struggle, whatever it might be, the better. To make it so that they feel comfortable fielding that kind of question from their peers. So I typically start off with that.

And then the other place that is so important is choosing consistent, practical ways of bringing money into your children's lives in a more regular pattern. So I often recommend - and research has shown this and we use a lot of research at the institute. If you're going to have an allowance, don't have it tied to any chores or behavior. They need to have certain things that they do within the household that are just part of being part of the household, keeping their room clean or picking up after themselves. Like that's just part of being part of the household and having an allowance, that's part of them understanding about money. So it's nice to have those be separate.

And then they can have a list of chores or a list of additional things they can do to contribute to the household where they can get extra spending money or extra money for giving if they want to. So they can really have a sense of more say and choices. But when they get their allowance each week, it's typically the same time each week and it's the same amount of money and you may want to have it be tied to their age, like when they're below double digits. It might be a lower number, maybe $5. And when they become ten years old, maybe it's $10. You can play with it. What seems reasonable.

And then what we recommend is that they take that money that they get and they do the share, save, and spend. So it's not that that's their money to use however they want. They split it up. So maybe it would be $6 and $2 goes into the save jars, $2 goes into the spend jar, $2 goes into the give jar. And so then they get a chance to see, Oh, when I get money, I have choices about how I spend it or save it or use it in different ways.

And as a family, having open conversations about how you as parents give, how you as parents spend, and helping the children understand that. Like they love their video games, they love their devices, they love the electricity that's used for that. Sharing with them openly about how much the electric bill has gone up, how much it costs to buy a device, what it looks like, like how many hours you've had to spend working to accrue the kind of money that pays for the things that they love.

Anything that can help them coordinate actions that they take related to money and that things that they love aren't free, the better. So those are a couple of things I would offer off the top.

Amanda Agati: That's great. I always hesitate talking to my girls about budgeting and what big-ticket items cost, the value of things. And so you're basically telling me it's the exact opposite. I need to take greater control of the narrative there. So I need to be taking some notes here and I need some tips because I better get with the program here to make sure I have control of the narrative. So that's really helpful perspective.

Emily Bouchard: Well, yeah, And if you have a big item coming up, maybe a new car, maybe a big trip, whatever it might be, sharing with your kids the thought process that goes into it, the research that goes into it, asking them to support you in it is really great.

And then also connecting your values to it. Like, yeah, we choose to get this kind of car because of the safety record, because we value our family's safety first and we're willing to spend more for that and we're willing to spend less on something else. Or when we want to pay for a big trip, these are the things and the values that we want to experience on the trip. We want to do a giving project while we're there. We want to make sure we're in a place that's really safe. We want to travel really comfortably so we can have the best experience. But then there's other places where maybe we want to give back more or where we don't want to spend as much. So you can really tie your values to whatever it is that you're spending the money on.

And then for something like a trip, if you're planning a big trip, letting them know how much it costs, and then also giving them a budget and saying you each get one day of the trip to plan out what we get to do as a family. Something that you would like to do and that you'll be our tour guide and this - you can negotiate the budget if you feel like it needs to be more, but this is the parameters that you get. And so they learn skills around negotiating, around research, around budgeting for something and it's something that they care about. So those are a couple of examples that families find really useful.

Amanda Agati: Do you make house calls? Or maybe I'll just put you on speed dial. That's really, really helpful advice. I Love that. While we're on the topic of the institute, can you tell us a little bit more about the goings on at the Institute for Family Success? And then to kind of bring it back to the topic at hand here. Tell me a little bit about the importance of parents being consistent with parameters. I'm sure - certainly I struggle with this, but I'm sure our listeners also struggle with that consistency, stability aspect of setting rules, and guidelines.

Emily Bouchard: Well, I'm going to answer that first because I think that's so important. Whatever guidelines or structures you put in place with the kids around money, it has to be something you can fulfill and follow through on. So if you're going to give them a budget, don't go over it. If you're going to give them a certain allowance and they, "oh, I ran out of money and I need it for the movies." Don't just give them the money. Maybe teach them about borrowing and credit, and what does that look like, and that there's a cost to that.

Like you can use those teachable moments we heard earlier to really instill in them an understanding of how the flow of money works in life. But really be consistent because nothing will derail whatever you've got in place more than if two parents aren't on the same page and one does something and the other does the opposite. Or if you say one thing and then you cave and do something else later. And the reason I say cave is because in the moment when we're with our kids, we love them. We want them to be happy. They want something, we want them to have it. And it's like we choose that moment of delight with the child over the longer-term goal of their total grounded, foundational support around money.

And so it's like always asking yourself, "Oh, if I say yes to this now, what am I saying no to. And if I say no to this now, what am I saying yes to." And I like using instead of no, yes, and. So it's like, well, you want that, let's look at your spend account. Sometimes it's on a device, sometimes they have it written down, whatever it is for them. How much is left in there. Or let's say they want something that they feel really compelled to get. And you can say, "Well, you've been saving your money, you could use your save for that, but I thought you were saving it for something else." But that's also a possibility. So if you say yes to buying this, what are you saying no to? So you help them think about the choices around it.

And I'd say that's probably the biggest thing that the institute does. So at the Institute for Family Success, we support families that are part of using PNC's Private Bank, and they have access to all kinds of different educational modules and ways to think about decision-making with money, how to be empowered around money, leadership development. If somebody wants to maybe participate in a family business or wants to develop their skills as a leader within their own career development, we help with that. A lot around trust and communication and families. Like these kinds of things, like what are the things that make it hard to talk about money.

It's so interesting because it's like the last taboo subject. I think parents are more comfortable talking about sex with their kids and managing that messaging than they are about money. And so that's why we're so passionate at the institute around how to empower people around these kinds of conversations and talking about legacy and the stories that got to us and shaped us and who we are around money.

And then what is this money mean, what's the purpose behind this money, and then what's the succession planning. Like if we're going to be planning this and we're making people beneficiaries of trusts or have different roles to play, are they prepared for those roles, what do they need to know, what does it mean to have a trust, how do you work with the trustee. It's a whole other world. And so we help people really navigate it effectively and so they can feel empowered as they're empowering their children.

Amanda Agati: That's awesome. Thank you so much for sharing thoughts on that. All right. We're going to shift gears now and turn things over to MJ. And I want to tee this next question up with some results of a study. So according to a recent junior achievement study, 54% of teens say they're worried about financing their futures. From my perspective, I think that's a certainly understandable concern, especially how expensive college tuition has gotten, how student loan debt in this country has grown so tremendously, even more recently how high-interest rates have risen over the past year or so, standing at the edge of a recession. A lot of questions around what that means for the job market.

So there's no shortage of concern. I think it's certainly a reflection of the timely results of that study. So MJ, help us out here as an investment specialist, an expert, and mom, what's your reaction to all of this? What do you think the best advice is?

Melodie "MJ" Roach: Well - and really thinking about that, I think of a couple of things. I'm not surprised. I think that when it comes to even thinking about student loans - and I think student loans has been in the news for quite some time lately. And I think kids see that and think, "Oh, my gosh, like, how am I going to afford it?" And not really even talking to their parents much about it

in many cases. And so I really think it needs to begin with having a plan. And I think that when you involve your children in a plan and they are able to have some focus and some ways to really dig in and start to work on that, I think that that lowers the anxiety. And I know that for us, one of the things that I tell my clients and we did ourselves is that when my kids were at an age where they could start to think about college, I started to have them apply for scholarships.

There is not a small list of scholarships out there. Just like you have your children do activities around the house for chores or duties that they have to do just to be a part of the family unit, you may have them apply for scholarships and there are a ton of them online. You will find hundreds of websites for scholarships. And I would have my kids apply for scholarships every week.

You may find that you want to maybe pay them for that, or maybe it's some bonus that they get if they apply for so many scholarships. Maybe they get a choice of where you're going to eat out on Saturday night. I don't know. But once they have a part in that, when they are starting to put a plan together around college and they realize that they have options. Options are important. And when you start to realize you have options when it comes to your education, it's not nearly as scary.

A lot of times people make the decision on what school they want to go to based on things that have nothing to do with success. I want to go there because my friend did, or I want to go there because, you know what? They have 13 restaurants surrounding the school that I can walk to. All of these things.

So once you start to put that plan together - so now we have - we're going to fill out some scholarships. Maybe another thing that you might want to think about is when your child starts to work, if they're one of your children - I have a host of children. So I had some kids who wanted to work immediately. And I have some who I'm still waiting for them to think about working. But for my ones that wanted to work immediately, the first thing we did is we opened up a Roth IRA. And once they started to be able to put money into that Roth IRA, they can use some of that money for college. They could use it for the first time they buy a car, for the first time that they purchase a home. So there's all kinds of things that you can do to help your child to feel comfortable about those decisions.

And another item is the responsibility in the decision-making when it comes to what are you going to college for and really making those decisions. So what is it for, what is the real need, so what are you going to college for, and then let's talk about how do you get some credits for cheap. Because you can get credits while you're in high school. You can get credits at your local community college because credits are credits. And if I can get some credits that are going to get me to my degree quicker and I can get them on the cheap, then I'm going to get them on the cheap. So there's lots of things that we can do to help our kids be wildly successful and not to have to pay or to get into a ridiculous amount of debt to do so.

Amanda Agati: That's so great. So start early and have a plan. I didn't want to interrupt you. You have more thoughts on that topic? Keep going. You were on a roll.

Melodie "MJ" Roach: Well, the other thing that I was thinking of is when you think about starting to invest - I talked about when you're really at those teenage years and really actually investing. But even before then, when your child really starts to talk about things that they're interested in, those brands. Whether it's the McDonald's, whether it's the - it's funny because when I first started to get involved with Starbucks, it was because I love Pumpkin. So it was the pumpkin lattes. For me, I was grown. While my now 17-year-old, she liked the pink drink at five. Five years old, she wanted to go to get her pink drink. So she could stay at Starbucks. And we were going to get the pink drink, which, by the way, I thought was horrible. But she loved it.

So when the kids start to realize that there are brands that they like, you can start watching those then with them and showing them actually, what does it mean to really like a brand enough to buy stock in the company. You don't necessarily have to start buying it then, but you can actually start to talk to them about what it really means. And then as they get older and then they start to earn a little money, or maybe when they start to get the money from their grandparents, for gifts and whatnot, maybe you start to invest that and then now you give it to them as a gift. And now after they start to earn a little money, now they start to do some investing.

If you take it to baby steps, maybe it's eight, maybe it's 12. Whenever they start to have enough focus that you can teach them what they're doing and the fact that they have an interest in it, then you really start to get involved with them and investing. But the sooner the better. It's not scary.

Amanda Agati: No. Make it interesting, make it relatable, and they will engage. Absolutely. That's great. I'm curious, Emily, before I go to the next question, surely this is a hot topic for you and the institute and the clients that you serve. Do you have some additional thoughts to share on this topic?

Emily Bouchard: I do. It's kind of the flip side. So like maybe 99% of the population has that worry. How am I going to finance my future and those were just such great tips. I was taking notes for sure. The other side that can happen for children that are growing up in an affluent community, in a situation where there's no worry about money. And it's not a question of if you can afford college. It's a question of which Ivy League school are you going to go to.

Like there might be other things. One of the things that we do with the families that we work with is we look at how to mitigate confusion or conflicted feelings of guilt or shame that can sometimes accompany having wealth. And when you're aware of people that don't. And so we really help them get clear on their core values like we said earlier.

And then also looking at where is the give jar, how have they grown that, how are they investing that money in a way where it can multiply, where they can give back even more, and building that ability to give. And we have a - we work really closely with the Philanthropy and Impact Group and they have an amplify impact process that they do with the families. And we talk about, well, what could we do to make a difference in the world on a larger scale because we can leverage what we have. And teaching your children about leveraging their influence, their leadership, their abilities to make a difference is an incredibly important thing to do to combat those conflicted feelings that can come up for them sometimes.

And there's all kinds of ways that you can do that. And parents can start to do that by matching. So let's say one of their children wants to do something about the homeless situation. You can empower them to research where would be some great ways to do some giving. A lot of families we work with have donor-advised funds or foundation, and they'll have the children have a children's board and they'll help to do research around that topic or that particular issue.

And then they'll have the children look at what money they have personally, and then the parents will look at matching it or having the donor-advised fund do it possibly, where they get to see that they can leverage that. And then maybe they want to start a process where they do some fundraising with kids in their school and they build awareness, they educate people about it, why this matters, and then they get other people to be involved, too.

And building those skills at a young age serves children so well as they go on to college. And they want to show up as leaders there and really having an impact in those communities or in a bigger way so that there's a way that they can see that, wow, having this access to wealth to affluence gives me a lot of privilege and also responsibility. And I can make a difference in the world. And that that matters is a huge thing for them.

Amanda Agati: That's terrific. Thank you so much. We've covered the full spectrum there as it relates to that topic. I think that's really, really helpful perspective. So thanks for weighing in there.

MJ, I'm coming back to you for another doozy. Can you talk to - you touched on this a little bit, but can you talk to us a little bit more about the pros and cons of college savings plans? We hit on student loan debt a little bit, but just in the overall context of the picture for parents and also kids. And just take it maybe one step further and say, in your opinion, when should kids learn to create and manage their own budgets? Can you share some thoughts on that?

Melodie "MJ" Roach: Sure. Well, I would say that student loans - student 529 plans or college plans have changed dramatically over the past couple of years. So the first thing is when to start? As soon as possible with 529 plans. And I would say specifically 529 plans, just because the 529 plan - there is a couple of other college plans out there, but the 529 plan just gives you a lot more leverage. There's just a lot more things that you can do with it.

Now, the 529 plan, a couple of things that I think are really important is the first one is that there are several different plans. They are based on the state that you live in. So you can buy any plan that you want to or buy into. But if you do get a plan that is specific to your state, then you get some additional tax advantages that you would not get if you purchase another. So you might want to be aware of that. Some people like that idea. Some people are very friendly to a different plan because they like that particular plan, like maybe an American fund plan because they like American funds or whatever it might be.

The other thing is start with a small amount that may be directly deposited on a monthly basis. Something small that you don't even notice coming out of your pay or coming out of your account. This way it's something that you're not really missing. Maybe you up it a little bit every year and because you're not quite sure, number one, what type of school your child's going to go to, maybe later in life, you may find out that your child wants to go to a different school. You might need lesser money or more money. So start small and make it to a point that's not something that is really hard on your budget, because you'll be able to adapt it at a later time.

The one thing about a 529 plan is that you can use it for any education. So that's a really good thing. The bad thing is it has to be used for education, so that could be a bad thing. However, they have made a lot of changes over the years. So still it's always a good idea to save something in a college account. And as the child gets older, you can do a little bit of changes.

The other thing is that you own it. The child is the beneficiary. So you can always change it to have another beneficiary, including yourself if you decide you want to go back to school and major in some foreign language that you've always wanted to learn, who knows. So 529 plan very early.

The other thing that I would say is when we are talking about budgeting, it's really important to think about - because when you think about budgeting, think about a diet. I don't like diets, but I do like to eat healthy. I don't necessarily like a budget, but I do like to be able to manage my money and feel like I'm in charge of telling my money where to go.

Money is a currency[?]. Currents[?] are constantly moving, where to go then you kind of wake up and wonder where it went. So it's really important that we learn to manage our money. So even when we're thinking about the three to five-year-olds, we're telling them to save, spend, and share. That is managing money. So when they start with whether it is their allowance that they're getting, that's a form of money management.

Definitely, once they've opened up a bank account and they're getting current income coming in, then they need to start with a budget. My suggestion is every kid out there at this point in time has some type of an electronic something in their hands. There are tons of free electronic tools out there for them to manage their money and even watch those investments.

They can create a wish list, a watch list where they're not actually investing, where they can watch things and they can act like they're putting money in when they're really not. That could be part of their money management because they're saving money for later, way later. They have a little bit of money for now, a little bit of money for later.

So when it comes to money management, like a money management plan, you should think about 65% to 70% of that should be for your bills, for your current spending. 10% of that is short-term. That's your future purchases, your bigger purchases that you're going to be making. Another 10% of that is your medium-term or kind of your emergency money. And then 15% of that should be for your long-term. That's like your long-term savings, 10% to 15%. So 65% to 70% of current savings or current spending. So that's really where you need to be when it comes to your money management. You can start teaching your children that as soon as possible. When they start bringing that money in, then they should be creating their money management plan, not their budget.

Amanda Agati: I love that. I don't like diets either as a foodie and my favorite hobby is eating. But I do love what you said about having a healthy financial diet and a plan. So that's great. Thank you so much. Really helpful tips around how to frame that conversation with our kids.

All right. Let's segue into a topic that I'm sure is on all of our minds. It's certainly something that keeps me up at night. And it's the world of technology and the role that it plays in terms of our kids interacting with money and how we talk to our kids about money. So, Natalie, our subject matter expert in all things technology, you're up next.

Natalie S. Talpas: Yes. Amanda Agati: Can you tell us a little bit about digital banking technology that's aimed at kids specifically and some of the pros and cons from your perspective? What is different in your view about how kids are learning about banking these days? They're clearly not using the old-school paper checkbooks of the past when there's an app for everything. So a lot to unpack here. Can you share your thoughts on this one for us?

Natalie S. Talpas: Sure. Yeah, I'm happy to. And I think - MJ, just hit on it as well. Lots of kids have devices, whether it's phones, tablets, access to computers at home, at school, in the library. And so, yes, it's certainly top of mind for many of us, not just on the topics we're talking about here today, but on all sorts of other topics the kids can be learning about.

And I think - at PNC I work on our team within digital and payments, creating experiences for our customers to be able to interact with their accounts they hold at PNC. And so we think - and we research a lot about how can we help support how families manage their children's interests in this and continue to evolve in that experience.

And so from a learning perspective - some of the other panelists touched on this too. But we're - certainly children are - and teens and young adults will continue to learn from us, from their parents, from other adults in their lives. And so that includes not only the things they observe and see, but it also includes the things they're reading, the things that they're browsing on their phones or computers or devices.

And so we're seeing families and particular kids are leveraging online sources. Social media, YouTube, TikTok. There's all sorts of things out there where there's influencers and people that are sharing opinions and perspectives on how they should be doing these things. Spending, saving, sharing, giving, borrowing.

And so, again, I'd put it in the kind of the same category as other parenting topics when I think about my little guys and what they're exploring online. And in particular, when we think about the different types of just games or video games they might have. I know at school, both of my sons, they're in second and fourth grade and they interact on devices at school with different games. And there's different incentives to get them to want to learn more or spend more time on a topic.

They can earn gems or tokens in some. And so once they complete certain levels, then they can cash those in. In Sports and fundraising. Like there's lots of different things that they're exposed to that allow them to start to attach some of the earlier concepts that were discussed already. A value to the hard work that they're putting in. They're playing the game, they're trying to learn something new, they're seeing that they're rewarded for that activity, and they can then make choices.

Do I - I'll share an example. My son is using an app now to learn a new language. My older guy wants to be able to speak Italian. My husband speaks Italian at home. He wants to be able to do that. And he's earning gems for the amount of time that he's spending on it. And then he can choose to spend those gems in ways to learn more about different things. And it's been really interesting to watch him because he's learning more and he's being very selective. He's my saver. He's the guy that wants to hold on to the gems and not spend them. And so again, just as we've been talking about today, helping them think through those decisions and recognize, oh, I'm actually making a decision here that they can then apply as they grow more independent.

Amanda Agati: I love that he's your saver. He could be giving us the tutorial here.

Natalie S. Talpas: Yeah. My younger guy not so much. Opposite for him.

Amanda Agati: Can we go a little bit further down the digital offerings path, maybe for older kiddos. We touched on school loans, we've touched on investing a little bit. We didn't really venture too much into fraud yet. What's your perspective on kind of all of these pieces coming together?

Natalie S. Talpas: Yeah, certainly. So as older kids start to have devices in hand. And there's different things that they're being targeted with. They're also being targeted with - from a fraudster perspective.

And so - you mentioned fraud and I have to talk about it for a minute. Because I think - certainly as adults we're familiar and have paid attention in the news or different things about different schemes like phishing or smishing, which is reacting or receiving a request through text message or SMS message to click here and make - login. This payment is due for a service you might not recognize or it is a service you recognize. And I want to make sure that payment is right.

And so our kids are just as susceptible to that, if not more, unfortunately, as we see with adults and people that may be familiar with it. And so, again, want to make sure that as our children are exploring or teens are exploring different things on their different devices - I used the example with the mobile device and they could be receiving a text message. But certainly even online or in different platforms where they may be having an opportunity to interact with purchasing a service, or they're trying to buy something online. And having conversations with them about what safe sites are, what good sources are, that sort of thing, are going to be really important.

So again I kind of go back to what I said earlier around, think about the values in your family and how you ensure that they think about their interactions online. It's even more important given the worries that are out there as it relates to social engineering and things that could lead to identity theft. And putting information out there about who they are and how they're spending can be used by, unfortunately, bad actors that could create harm for them.

So while it is fun - and I love MJ's suggestions. There's a lot of different free apps out there and tools that we can be encouraging our kids to explore. I would just recommend that we really stay close to that and maybe help make some suggestions on what might be good tools to use and different things to use and really be a part of their exploration as they learn more.

Amanda Agati: It's a lot to think about for sure. You touched on it, but I just want to go a little bit further before we try and wrap up quickly. I know our time together went by so, so fast and have so many more questions to ask all of you. But I just want to hit on this one thing before we wrap up. And so you talked about in-app purchases, you talked about earning gems in different games, potentially buying new characters, and certain video games. What do you think parents need to know about these actions within apps and other technological software? What to the extent, really should parents be monitoring this and if so, how do we go about doing it?

Natalie S. Talpas: Yeah, absolutely, absolutely. My sons are in the age where they don't have their own devices yet. We've set them up on some different gaming platforms, but they have options to request to purchase more. And I think many of us are familiar with that as parents of kids that are starting to explore more.

And so I would just encourage you to help them understand the thing that's on the screen costs money. So getting the next set of levels on this game costs money. Maybe it's $10. Help them understand the comparison of that. What is that $10 cost when they're shopping in a store, a physical store. And help them see that those are similar. And help them start to kind of frame their value structure accordingly. Needs versus wants. All of those things.

And again, I've mentioned this a couple of times. Staying close. The parental controls in those gaming systems you might be setting them up on or different solutions are really, really strong. And I think ensuring that you have an opportunity to review and approve those purchases and talk with them about some of those decisions. Again, each one of those examples can be used to help kind of further their knowledge and education and help better prepare them as they grow to make independent, smart decisions.

Amanda Agati: That's great. Thanks. Thanks. So as I said, we're going to kind of wrap it up here. But before we say farewell, I thought it might be fun if we each gave one tip or trick maybe that our audience could use as a takeaway. And to buy you all some time, I'm going to go first.

So in my house, any cash or checks that my girls receive for holidays, their birthdays, et cetera, go to one of three places. And it's really up to them to choose, but they're not spending it. That's a hard and fast rule in our house. When they are gifted money, they are not spending it. They are saving it so that it can go into piggy bank, AKA hoarded under their mattress, and interest-bearing savings account naturally with PNC or an investment account.

And then once a year we take stock of what they've accumulated and make some decisions about what to do with it. But as I said, we don't spend it. It's really meant to be savings for their future. My comic relief, seven-year-old has said many, many times that she is, "saving for a used BMW." I'm not even sure that she knows what that is or where that came from. But we're going with it. It's a goal. It's an objective to work towards. While my 11-year-old is totally focused on saving for Penn State. We are out there for those Penn Staters. So again, it's stage of life appropriate, I think, given where they are.

With the investment account, it's actually very much aligned with what MJ said in terms of trying to make it fun, let them choose things to invest in that are very relatable. Disney, Amazon, Starbucks, Five Below, et cetera. And then at the end of the year, they get to see how their choices performed and can make some adjustments as they like. I resist the urge to give them investment advice. You never want to do that. Give investment advice to your family members.

So I try really hard. But at the end of the day, it gets wildly competitive. So we've made a game out of it and everybody's pretty enthusiastic about it. So hopefully that's a fun tip that you might be able to take away. With that, hopefully I bought you all enough time. I'm going to turn to Jeanine next for a tip or trick to share.

Jeanine Fahnestock: Yeah. So I think I'm just going to reinforce a little bit what I've already said. And that's just this idea that very young children starting around age two or three can begin learning the skills and concepts that form good financial habits. And again, it's likely that parents and caregivers are already helping them do it. So I think my best tip for families is to think creatively about ways to leverage everyday moments as financial learning experiences.

It can be through decision-making. It can be as your children are helping around the home. It can be as you're exploring your neighborhood together, looking for those everyday routines that offer the really wonderful opportunities to build a strong foundation for financial stability.

Amanda Agati: That's great. Thanks, Natalie. Do you want to go next?

Natalie S. Talpas: Yeah. Sure, sure, sure. I Love that, Jeanine. Reminds me of when my sons were little. I think I'll probably just sit on - continue to stay curious about what tools and content your kids are using to learn. Even as young as seven or eight, they're out there exploring. And I think having really good conversations about where they should be going to learn more. And asking them if they read something, encouraging them to come back and talk to you about it. Or maybe you guys can look at something together. So again, just stay curious about where they're going for information in particular when you think about digital resources.

Amanda Agati: Love that. Stay curious. That's great. That applies in so many different angles for sure. All right, Emily, you're up next. Give us your tip or trick.

Emily Bouchard: I'm going to give something to the parents that are wanting to be consistent around holding those parameters. So the best thing you can do is have natural, heartfelt empathy. Like really connect with your kids around how much they might want something, but they don't have enough money for it. Like really empathize and then allow them to have the natural consequence.

And remember, any learning a child gets is going to be a lot less expensive and painful than if they don't get the learning as a child and they have to wait until they're an adult. You want them to make mistakes with money. You want them to have some autonomy and they make choices that you wouldn't make, but maybe then they can learn from them. And really that will be a lesson they won't forget.

Don't try to insulate them from that. Have the empathy and let them have the natural consequences. The biggest one I see the parents do is the kids will run up a big bill from the games or from a credit card on Amazon or something, and the parents pay it and they might get mad at the kid, but they don't have their kids pay it off. And that's the biggest thing you can do with them is give them that lesson and that pain point of what it means when they overspend money that's not theirs. Don't protect them from it.

Amanda Agati: Great advice. All right. MJ, bring us home with your tip.

Melodie "MJ" Roach: My tip is two-fold. The first one is definitely stick to the money management. When they start little and you have the three, the spend, the share, and the save, stick to that. And then when they start to earn money, have them open up a Roth IRA. And if you want to put a little extra money in it, as long as you follow the IRS constraints, that's great. But that will follow them through and will give back to them for the rest of their life. So that would be my tip.

Amanda Agati: Mic drop. That's wonderful. Thank you. Finishing on that note. I just want to thank all of you so much for sharing your insights with all of us today. I know I certainly learned many things that I am going to continue to use in my conversations with my girls.

So this has been really great. And thanks to all of you for tuning in. We really appreciate your time and attention today, and especially considering you're taking time out of your busy day to be with us. So we hope you found the conversation helpful. As always, please don't hesitate to reach out if you have questions or want to learn more, and thank you.