Kids, Tweens and Teens: Future Ready and Financially Fluent

First Republic Bank
May 9, 2022

If ever there was a time to be resilient and financially fluent, this is the moment. In an ever-changing world, keeping kids grounded — and prepared for uncertainty — has never been a more crucial and challenging task for families. This session will address both: How and why to start the process of financial development in kids and how to connect that to nurturing resilience in a time of extreme change.

Read below for a full transcript of the conversation. 

Stacy Allred - Welcome everyone to a webinar today with Joline Godfrey. We are so excited to share with you kids, tweens, and teens, with the topic of future ready and financially fluent. And I am going to give a short introduction to Joline because it is our second webinar with Joline and we have many, many repeat attendees. Joline is a pioneer in the field of financial literacy. She truly wrote the book on this, and "Financially Fit Kids" in its updated edition is a go-to book for financial literacy, covering age five through, I think it's 26 with really practical strategies. And I think one of my favorite things about Joline, there are many, is the creativity that she brings to this space. I think Joline was one of the first to meld ideas like fashion and finance, and how much does it cost to feed a horse, to meet kids where they are at. So with a ton of creativity, wisdom, and practical application, we're so excited to invite Joline for another dialogue to share this wisdom. And one of the things Joline and I were really hoping for, again, was lots of questions in the chat or the Q&A, feel free to use either, but it made it feel so wonderful, and interactive, and relevant to our participant community last time. So without further ado, I'm going to go ahead and screen share here.

Joline Godfrey - Great. While you're doing that, I want to say to the audience that they're lucky to have you at First Republic, because you're one of the few people who doesn't automatically think I'm nuts when I bring some of my ideas to you. So that means you are a true creative kindred spirit and your clients are very lucky to have you. So it's fun to be here today.

Stacy - Wonderful, and thank you Joline. And just quickly checking, can you see the screen okay with the slides?

Joline - Yep, we're all set.

Stacy - Okay, great. So let's get started here. What do you mean, Joline, by your ideas around future ready? To get future ready from the 21st century?

Joline - Well, if you bring up the Norman Rockwell painting there, which I have always loved, it's one of the classics of that painter, but it's so emblematic of what used to be pretty much the only kind of financial education, people got two kinds of financial education. One was it was your parents saying to you, don't spend beyond your means, penny saved is a penny earned, you know, all those very helpful truisms, or for some families, it was the talk when somebody, usually a trust officer or someone of authority would sit down and explain the trust, and you'd nod, and hope that you understood it, and go away. But it was a little secretive and a little hushed. That was what we used to think of as financial education. But the 21st century rolls around and, you know, it's way more complicated now, the landscape is extremely different, and as the next slide points out, there are really four places it's different. One is, of course, I hardly need to tell anybody that the landscape is different because I bet there are very few parents or grandparents on this show who are comfortable, for example, explaining anything about crypto currency, and you know, their kids, and our kids, and grandkids, they're asking those questions. And of course money is just so much more invisible than it was in our time, and of course, it's also way less regulated. I mean, I remember when you had to dress up and go to a special place to invest.

Now you just get on the web in your pajamas, and kids who are quite young have figured out how to do that. So there is the whole difference of the way the world is when it comes to money and what kids have access to. The second thing is the competition. It used to be, I can hear my father saying, you're going to do this because I told you so. Well today, families have much more competition for authority from social media, and peers, and the popular culture. So parental voice isn't as strong as it used to be, and of course, what we know is kids need new skills because money is so invisible, trying to figure out how to calculate, how to make sense, how to make money more transparent so they can understand what they're managing, that's more difficult. And finally, there are stressors around money that in the last decade even have just become so much more intense and are feeding into the kinds of issues around depression and anxiety we are hearing about all the time with children. So future ready means to be able to manage those four things in a whole new way.

Stacy - And Joline, can you say a little bit more about kind of the financial stressors for kids? because we are all getting stressed from time to time, but this really is different, can you go just a little deeper on that? Anything else to add?

Joline - I'm happy to actually, and I do think the next slide is important. We are sharing these slides by the way, and I think this is going to be a helpful little tool for a lot of people watching. As I begin to look at, and I'm sure you're seeing the same thing, Stacy, I've begun to who categorize the kinds of stresses kids are really being subject to today, and I'm looking at four big ones. The first one is the one that certainly is affecting me every day right now, and it's, my regular life goes on, but over my shoulder, there is this big shadow, and it's so sort of talking about climate change, and COVID, and the pandemics, and what's going to happen with finance, and oh my goodness, there was a major league war going on. And so there are big things going on that I have very little control of, and certainly teenagers and young kids who are more tuned into these things than you can imagine are in this state of wait, what is this all about? And it's very hard for families to be very helpful there, we're going to talk about how you do that. The second one, situational. I mean, again, we all have this, there's an accident, there's suddenly a divorce, somebody gets sick, COVID certainly has created problems in lots of families when suddenly there's a serious illness. And so that makes kids anxious because it's, oh my God, what now, are we going to be okay? Is the question. There is, of course, the eternal self inflicted that is kids spending too much worrying about what their peers are thinking, worrying, do I have the right clothes, all those things. And finally, I've put in here the isms of life, because that's a big one of late. And that is, as kids are looking at issues of privilege and the gap between the haves and the have nots, there are really big worries about, how do I function with my peers, with my friends? How do I manage this? So these are big things, and I think every one of them affects kids in different ways, and they are incredibly tuned into this these days, even children as young as nine, 10 and 11, so it's not just an older teens problem. But I expect you're seeing this too with your kids and their friends.

Stacy - Absolutely, and the impacts on social media, and just the uncertainty, and it has, it's been a tough few years for everyone, and especially the kids. So Joline, you're known for your kind of practical ideas, so can you share with us a little bit more about what can families do

Joline - Yes.

Stacy - about all these stressors?

Joline - Absolutely. Go in the other direction, just a couple of slides now, right there. Again, there are four things, and it's not that I'm obsessing about four things, but it happens, four things families can do, and I am really practical, as you know. So anybody has a question about how do you translate this? Yell, and we'll get a little bit more specific. And as you know, I answer questions after this webinar as well. But the first one is really helping kids understand their own agency, their own empowerment. There are things kids can do, whether it is on the existential level, or on the situational, or whatever it is, and that's what we do just to help kids understand, they have power, they have some independence, and our job is to give them the skills they need in order to be managing these issues, and we'll get to that in a few minutes, but it's essentially just giving kids skills, and that's what we're here for. The second one is cooperative action, and it's why I'm such a great believer in family. At the end of the day, families have moved from places of shelter to really becoming platforms. They are platforms where you launch kids, where you have community, where you certainly do give shelter, but you also give a place of confidence. And so figuring out how families have cooperative action together is critical. Continuous learning and knowledge. You know, we used to think graduating kids from high schooler and then later college was an act of success in families. Now what we're understanding is that we are constantly learning. It's continuous learning, it's learning for lifestyles, and getting that into the culture of the family is another way to empower the kids and families. And then of course, helping kids explored opportunities for activism, for being part of change, for making things different. I think one of the things all four of these strategies speaks to is making sure kids aren't falling into resignation, because resignation is part of that whole worry around depression and anxiety. You want to tap into that normal energy that young people have, that I envy so much myself these days. So these are just strategies that we can really get explicit and clear on.

Stacy - Yeah. So agency, family community, continuous learning, and activism.

Joline - Yep.

Stacy - So if that's how we get them ready for the future, can you share with us some ideas on how we get them financially fluent?

Joline - Yes. So the bad news on this is that you are not going to leave this webinar with the answer. It is truly a journey, and I say that because I've worked with some families for three years, I've worked with others for 10. I've just graduated a young woman I spent two full years with, and it's like any of us, if we were going to learn a new language, then it would take us time to acquire that language. That's what financial fluency is, it's really a process that goes on over time, and I think what makes families, again, so important is that it's within the context of family that you have time, that you have an ability to match children's developmental stages with what they're ready for. So what we do pay attention to, and people who are in our last webinar will remember, I went through the financial stages, and we can do that again very quickly as a quick review, and then I'll tell some stories that will help explain how we really do this. But those stages are important because what we do for a 5 year old is different from a 10 year old, a 15 year old, a 25 year old. And I was actually with a marvelous family over the weekend, and it was astonishing the number of times that the grownups, and I mean the single uncle who has no kids and is an artist, the grandparent who is well experienced, the dad who would say to me, I've got a 10 year old and a 25 year old, I need to figure out both of them, but oh, by the way, I don't know this either. And so it turns out understanding those developmental stages is a big piece of, as you know, what I pay attention to. Yeah, we can just, you know, very quickly take a look at these. And Stacy, as you and I were talking, gosh, I think a week ago, you know, another reason to be sharing this deck is there's so much content on this slide.

What I've tried to do is summarize my book, which has a lot of content in it. But here what we look at is over time, you're acquiring a language, you're matching your values with basic skills. You're taking those skills and applying them as you get a little older, you're then managing those skills in a bigger way. And what I try to remind people is that whether you are a novice and you are, you know, 45 years old, and you want to learn this stuff too, or you're trying to figure out how to catch up your 16 year old, it's important to remember this is not about chronology, it's not about specific age, it's about where are you with what you know? Because no matter where you are, beginners or beginners, and so whether you're beginning at 16 or 26, doesn't matter, you've gotta begin with language, and values, and skills, it's just a little more intense, and we have slightly different way of going about it, obviously, for a 16 year old than a 10 year old. But it certainly is also true that you and I have both worked with 12 year olds who are more sophisticated than some 18 year olds, and 18 year olds who know more than 40 year olds. So it's really important to get a grasp on developmentally, where are each of the members of your family, and what do they know, and what do they want to know?

Stacy - Yeah, it Joline reminds me, I was doing the stock market game with a fifth grade class. And when I came in, kind of the second or third time, they all showed me their smartphone and they had all figured out, we hadn't even gotten there yet, how to check all the indexes. And so these are smart kids and lots of energy behind. Before we get into the challenges, sometimes, you know, families, they're not quite sure where to start, right, and I think the other thing is sometimes there's some confusion with money conversations and wealth conversations.

Joline - Yes.

Stacy - And you know, money conversations can start any time. So give us one example, maybe, of an on-ramp and then I'll put the challenges up here.

Joline - Well, you remind me that kids are really canny about asking questions about money, right at that moment when it's least convenient for you as a parent. And I think what parents are always trying to do is answer their kids and be informative, and all of that, but because they ask really tough questions at really hard times, it's easy to go in one of two directions, either, oh, I can't talk about that now, which is not a good strategy, or you know, that's a really important question, let's set aside time to talk about it. And I'm saying that because that on-ramp is important, but if you try to answer it too glibly or too quickly, you're going to miss a teachable moment. So for example, you know, I have one 12 year old boy in a family who is just insistent, he wants to know how much his family is worth. And it is the driving question that he does drive his dad crazy with. And of course, his father understands that he has no context for even beginning to understand that. And so one of the things we are trying we are doing with that 12 year old is setting aside time once a week to begin to get him ready to understand the wealth of the family, and we'll get back to what that means in a moment. So I think making sure that you as a parent are not bullied by kids and their questions is a really important start, just take a breath, make sure they understand you, take them seriously, and you plan to get them the information they want, but there is a way to do it, and a time, and you're going to set aside time and begin a process.

Stacy - Yeah. Joline, it reminds me of, there's a Don Draper film from "Mad Men", and Don Draper and his wife are sitting at the edge of the river, and they have a new Cadillac, and their young daughter says, are we rich? And Ms. Draper says, it's impolite to talk about money and shuts the conversation down.

Joline - Right.

Stacy - And you know, that's the exact opposite of what you're saying, this theme of sharing the right amount of information at the right time, acknowledging the importance of the question, and also, you know, taking the time to prepare. One last thing, and then if we could move to challenges, one of the taglines, I think it's your tagline of something around no transparency before preparation.

Joline - Right. Oh my God, that's my favorite. It is the one, for the parent who means well, and says, well, there are two ways to look at this. Parents will say to me, when do I tell them how much they are worth? You know, particularly for kids who will have substantial trust funds. And that's my response, until they understand what any of this means, doesn't make any sense to be transparent. And what is transparent is to really prepare them over time. So I think you're right to remind me of that one, Stacy, because I understand parental anxiety around, I need to tell them something and they're pressing for it. But I think that developing readiness is, of course, what the last webinar and this one is all about. It is a process, and this kind of explains how we begin to do that.

Stacy - Yeah. What do these challenges look like at these different stages?

Joline - Well, I'll just pick out two in the interest of time here, but look at stage two where I talk about one of the challenges of tweens, and I think of that 11 or 12 year old kid, is being taken seriously and taking on responsibility. There is a tension there, every kid wants to be taken seriously, and particularly as they begin to show signs of growing up, but understanding that there is a balance between being responsible and being taken seriously is a very tough nut to crack with a 12 year old, because taking responsibility is not nearly as attractive as being taken seriously. And so helping kids through that actually is one of the big challenges, I think, for both them and for parents. I will say though, that being taken seriously isn't just what happens in those tween years. I mean, you and I know it's an issue for us as young adults as we're going into those first career years, and helping young people onboard into their first jobs and their first careers is also a part of this process, because being taken seriously, developing gravitas is part of what is also important through this whole process. I'm pretty sure I told the birthday process on the last one. Does that ring a bell for you? Maybe not.

Stacy - I'm not sure. Go ahead and share it if you could.

Joline - Really quickly try to share this. So one of the ways that I try to help families really resolve this, helping kids be taken seriously and take on responsibility, or balance privilege with responsibility, if you will, is I encourage people to take their kids, whether they are 5 or 15, off to dinner the night before their birthday. And that should be a serious dinner with a white table cloths, and it's maybe just with the child who's having the dinner, having the birthday, forget the rest of the family that night. Because what you want to say in the course of that dinner is, honey, tomorrow is going to be so much fun, you're going to have a cake, and gifts, and friends, and it'll be just so full of fun. But tonight we are here to talk about what it means to be another year older. And then it's a process of asking the kids what they think being another year older means? And that first dinner can be puzzling to children, and say, what are you talking about? They'll not understand. But over the course of that dinner, you will be delivering a message that with opportunity, with fun, with the next day's pleasures and privileges, come responsibilities that go with it. You have to do the same thing the next year, and the next year they may well say, hmm, you've told me that last year. You have to do it the third year, at which time it may well be a rolling of the eyes. By the fourth year of doing this it becomes part of the family culture, and there is a repetition in which kids now understand, oh, okay, so tomorrow's going to be great fun, but I am expected to take on new responsibilities. And I take the time to really encourage families to do this in a real way, because the outcome is so powerful. You know, we don't often help kids make that equation or that formula between privilege and responsibility, fun and responsibility, that's our job.

Stacy - Yeah, love it. Joline, could you share some of the activities, in addition to that wonderful tradition of the birthday dinner, and then I'm going to go to an audience question, and I would like to remind our audience, please add to the chat, put questions in the Q&A, Joline and I have have built in time here to interact with your question, so please add those.

Joline - You know, I was just working on another activity that I really like for the teenage years, it's a little harder now, not every kid is clamoring for a car, which is a real difference these days than it used to be when you and I were growing up. But for young people who, they're getting their license, they're wanting to use the family car, one of the things that we do is give them an activity that we've turned into a bit of a game that helps them really figure out what it costs truly to own or to run a car. And of course, many families have kids take care of the insurance, or they ask them to put the gas in the car out of their allowance, or there is some attempt to use that. But we really make sure that kids understand through using a calendar and going through everything from, you get a ticket, you've gotten a parking ticket, you've gotten a speeding ticket, you need to go to the car wash, through the course of the year we have a process we take kids through so that they are constantly adding up what maintenance of a car is. And of course, whether it's an electric car, conventional car, new car, fancy car, the variables of course are different. There is something about helping kids understand the concrete nature of responsibility when it comes to finance that parents are quite ambivalent about sometimes. I mean the one will be, oh, they're so young and they've got much to worry about, I don't really want them to have to think about all that. But if you think about this as practice, then it goes away as a kind of punitive thing you're doing, which is not what I intend, but it now becomes a way to have a rehearsal for real life, which is what we're trying to do here. Rehearsal for real life is what kids are really hungry for, even when they resist it, because that's the only way we're going to get them ready for the lives they're going to lead if they indeed are going to be independent and responsible.

Stacy - I love it, it's doing a few things, it's bringing the future to the present with this rehearsal. And the other thing is it's, you know, we work with families with lots of layers of complexity, and family governance, building family governance, and taking a more formal approach is a skill, and skill requires doing. And so if you can engage with kids at these younger ages with the relevant things, take the car buying, you know, families can use a car buying policy, you know, that agreement where you sign off on all these little things, and it does, it takes is typically a really casual process and makes it more formal. Okay, Joline, let's go to our first question. This is one that we get quite often. This is a question from our participant who was raised in a very financially modest family with very strong ethic for saving and responsible spending. So very limited dining out, modest vacations, and now finds them themselves in a much more successful situation financially and with vastly increased discretionary spending. So the question is, what are some suggestions you have for balancing and enjoying an increased standard of living while instilling those same values that they were raised with that are still so important?

Joline - You know, this is one of those crazy opportunities where you have a chance to use the concept of scale. And I don't know where that particular family is living, but I know scale is a word in the financial vocabulary that if you've become financially successful, you've probably been the beneficiary of scale at some point along the way. And one of the things that I think matters here is using that as a tutorial moment. And what you can do is you tell kids about your modest upbringing, you don't shy away from that, but then you begin to use that as an entree into discussion about what it means to move from there to scale, but maintain consistent values. So obviously when part of that is we've talked about over and over is you've gotta be explicit and annoying when it comes to transparency around your values. But I think it's a place where you say, look, when I was young, when I was able to give $10 to something, it was a big deal, and I felt really good about it. Now I have to look at, what does 5 or 10% our income or our net worth now mean in terms of scale? We have to think in bigger ways, both about how we make impact with our investments, but also with how we make impact on the community. I think you don't have to be inconsistent as a family. I think you keep those values, but you introduce the fact that you think about it in more impactful ways. And that is yet another way you empower kids. There are real issues around financial stress with kids who are embarrassed and ashamed about the fact that they have such a big house, or they have a pool in the backyard, or their parents have so much more than their friends parents do. What you do is begin to make sense of the fact that, you know, family A gives away as much as they can to United Way every year, we give away as much as we can, the numbers are different, but we both care about making impact. And I do think introducing scale is a way to help kids make sense of it is one of the strategies that is really very helpful.

Stacy - That's great. Another question, Joline, is around a participant with a 10 year old daughter, and she's trying to, you know, kind of do the allowance thing. And when she forgets, the kid doesn't remind her, the kid's not motivated by money. And you know, we all have different money personalities. And the question is, do I need to try and instill a better appreciation of money and money management or should she just wait?

Joline - The kid is absolutely never going to remind the mother of the allowance because that child already has what I refer to as an invisible allowance, and an invisible allowance is, you know, she's going to get money one way or another, it may not be in the form of an explicit allowance, so it doesn't have any meaning for her. This is what's so hard for families, it takes so much time, attention, energy for parents to make sure that the money their kids are getting is all transparent and visible. So when I put an allowance together for families, and maybe that's a future webinar we should do, Stacy, because just doing allowance is tough. But an allowance really has to be less about giving kids a sum of money and telling them to spend it wisely, it has to be an opportunity to teach them what income is, for example. And income in a family for children, even children as young is so 7, 8, 9, 10 has to do with earned income, the allowance, which is practice income, windfall. And so, yeah, earned income, windfall, and practice money, those are three of the big income forms. And if you just give them allowance and don't have a way to account for the other two, you're not really teaching them about money, you're just handing out more money and confusing them, because it turns out children have cash flow problems too, and that's part of why you want to have them do an allowance, you want them to have money in order to practice managing cashflow, managing savings, philanthropy, all those things. But you know, it's a lot for a parent to take on. I understand why so many families are frustrated by it, but it may be that we could just do one whole webinar on how to do a successful, transparent allowance, and that could be really useful for families.

Stacy - Yeah, I mean, allowance is such an important tool, and you're kind of getting at the driver of necessity at the core of that.

Joline - Right.

Stacy - But what many of our participants experience is that the financial lessons that happened so naturally in a family of limited means, just don't happen in families of affluence, and you know, just the definition of opportunity cost and understanding we get the TV or go on vacation, and those things that are happening so naturally just don't happen. And so you know, allowance done right is so worth the effort though, just the ripple effect on all of that, and so I would say, don't give up, you know, kind of keep at it. Okay.

Joline - Well, you know, I would just add to that, you've really laid it out brilliantly. If you have limited means, you don't have to be intentional about it, it happens by default, but if anything is literally possible for your kids, the responsibility of the family is to be intentional. To be intentional, requires so much more energy. And it's why I think, in the future, we may want to do something on this, because I think it's one of the hardest things that families have to tackle.

Stacy - Yes. Okay, so we have some more questions about kind of spending and allowance. And this next one is, you know, they're giving a cash allowance to kids around age 10, this is from a different participant, and they're wondering, are there apps on the smartphone or how do you recommend doing that? because the problem is they give cash allowance and then they want to spend it when they're out, and they don't have the cash with them. And so now they're borrowing and paying back, and it's a little problematic. So just the practical of how to handle that?

Joline - So I have one family that I think conquered this. There are many apps, I'm not sure there are any I'm crazy about, but there are apps and I encourage families to use them and just see what works for them. But for example, I have one family with a 10 year old who they were lucky in that this kid really likes to read and wanted still to buy books that you hold in your hands. And so they decided just to do an allowance for books. So I think that's actually a really good key, find one thing, don't make it sort of general, particularly for younger kids, find one thing, and help them get really good at figuring out how far $50 a week, or a month, or whatever the number is, is going to go around that one thing they care about. Once that's mastered, add a second thing that they are now in charge of. I think part of what happens is parents give kids opportunity that just exceed their ability to really make judgements about. And so of course they're not making good decisions about it. And I think it's better to start with one thing and build on it over time.

Stacy - Joline, I'm looking at time, I'm wondering if we can shift into 10 money skills, have you talk a little bit about FISH, and then I have some more questions, and participants, keep 'em rolling in, because we're going to follow up afterwards on some of these questions as well, and I have one you're going to love about financial education.

Joline - Oh cool.

Stacy - Okay, so 10 money skills.

Joline - So these are the 10, and as you know, there are multiple more, but I have come to understand that kids who master these 10 go on their own in their own lives to get better at everything. And so I also don't think these are linear. You know your kids, find one to focus on for a while and then move on to the other one. We do something called money score, which allows kids to self-assess. But one of the great things about actually giving kids a list like this and saying, look, over the course of your growing up, these are the things you're going to know, in part because you want to go from this abstract, we want you to be financially responsible, to, here are 10 things you're going to need to learn over the course of your growing up. You need to make it as concrete as possible. We help kids understand how they need to brush their teeth and learn to read, and we know how to make those things concrete. We need to do the same for each of these skills. And you know, I don't mean for example, I've got in here, how do we invest? Obviously we are not suggesting you're going to have a 10 year old Warren buffet. What we do suggest is that given wherever they are developmentally, they're going to begin to hear you talk about investing, you're going to talk about investing in the family, investing in education, investing in things that have value afterwards. Give them as many metaphors and ways of applying those ideas as you possibly can. Same with handling credit, you know, I do think lots of parents are really smart about saying to kids, well, you know, I'll give you a credit now, but you have to pay me back. But it's easy to forget that. Again, give one thing and allow them to have some real experience in the house where they're secure and safe with the consequences and the possibilities of credit.

Stacy - Joline, I've gotta just interject, another participant question came in on this slide, which is, of the 10 money skills, which is "By far and away the most important and why?" Is there one single one that's really standing out to you of these 10?

Joline - Yep, number two, how to keep track? You know, it's not just for kids, it's for grownups too, it's every person's monster in their head. As you know, the world is incredibly sophisticated at making sure we don't know how to keep track of our money, that's good for the companies making money off our money, it's not so good for kids and family. And this is where I usually start. We have all kinds of ways to do that. But one of my favorites is to take a six foot piece of drawing paper, roll it out on the floor, put 12 months on the year, and just then put in every holiday, including Halloween, by the way, and birthdays, and birthday parties, put in travel, whatever you can that gives color to that child's life, and have them start filling it in. Because again, life goes so fast, it's so busy and full now that things happen and we don't have an opportunity to take time to say, oh, this is where money is going. Again, is a case of making it concrete and less abstract, and certainly less invisible. But yeah, if I could do one thing, it would be to help families help their kids keep track. Yes.

Stacy - Okay.

Joline - But no, let's go on, because I know time is going. This is the other piece that, of course, we talked about last time, but I think is worth revisiting. Again, this is a family activity and you get out the pens and pencils and you sit around over, whether it's a dinner table or the beach, wherever you are. But you know, most adults on this show has somebody, if not themselves, who has a pretty tidy listing of everything in their portfolio, what you own for real estate, stocks and bonds, and so on and so forth. But when I think about financial capital, what I'm thinking about is exactly this, it's not so much what's in the portfolio, but what is your fluency? What is it kids need to learn? Well, they need to understand a balance sheet, they need to read the business pages in the newspaper, whether it's online, or something that comes in on a Sunday, or whenever. They need to understand what due diligence is. They need to understand what your expectations are around a FICO score. The one thing I would say to families is please do not magically make kids FICO scores high because it doesn't give them any room to figure out how to do it themselves. So these are, again, skills of development and responsibility that will help them build character, as well as financial competency. But again, the intellectual capital, I really encourage and work with families to create a very concrete list of collectively who knows what in the family? You know, if you have an uncle that is an expert in, I don't know, building houses or construction, and you can send that kid off to learn about the costs of construction, that's one thing. I have a family right now in which the teenager has an uncle who runs a guitar store.

This kid is obsessed by guitars, this is an amazing place for me to build on that kid's interest, in order to help learn the skills that they also need. Make sure everybody knows what the intellectual capital in that family is, and list it, and inventory it, and keep track of it. This tells you, or tells kids in particular, that the value of your family isn't in the size of the house or the portfolio in the bank, it is, by far and away, what you all have collectively learned. And it's why continuous learning is such a critical asset in terms of getting ready for the future for families. You've gotta keep learning in order to be adaptive and resilient. So intellectual capital is obviously the next thing. Social capital, you know, this one's tough, a lot of kids self-identify as introverts and helping them be social, especially as we come out of COVID, is tough. And yet it is those connections, and I don't mean transactional connections, I mean really having friendships, and goodwill in the community, and being part of something that really gives them a way to be part of the fabric of their community, and their extended family, and the country. I think we all see the need for building our social fabric in a way that we've clearly not done very well at over the last few years. And again, I'm talking about a very explicit process of building the social capital inventory in the family. Human capital, the next one, I was with the family this weekend, and this was a really interesting one. This particular family has done a magnificent job of helping that all of the members of the family to understand their history, and their origins, and legacy of the family. But one of the teenagers said to me at one point, you know, we've all done that, we understand the family history really well, somebody needs to talk to us about the future.

Really so touched by that, because obviously that is a question that young people will have. And our job is to make sure that the young people know that the origins of your family, the strength of the family is part of what builds their readiness for the future and helps them go with lots of strengths into the future in a very resilient, adaptive way. You know, I'd look at the love of hiking, for example, that is there in some families. You know, and in the particular family I'm referring to, I know what is being planned five years out in terms of family meetings, and I'm going to start talking in that family about what we will do in the future, that is built on what we have done in the past, that will make a difference going forward. So this is, again, complex stuff, it is harder to, I know that's not true. I often get on my high horse about the fact that we've been talking about innovation in companies forever, we think that's completely normal. And we know how complicated that is, we know how complicated onboarding employees is and nurturing employees. We need to start paying the same kind of attention to families that we have done to companies and employees, because whether it is nurturing innovation or onboarding new members, I mean, that's the stuff that makes families cohesive, and strong, and ready for the future.

Stacy - Love this. Before we go into values, one family is they were thinking about, you know, kind of distributions and money requests from family members, they used this framework of FISH, and they said we are in, you know, growing the financial, intellectual, social, and human capital. So any request that you had for money had to go directly into growing the capital, the financial, intellectual, social, or human. And so it wasn't about consumption, it was about growth and investment, whether it was experiences or funding a, you know, kind of a trip abroad that was with a real purpose, all sorts of different things, but a very different mindset.

Joline - I love that family. We should have them on to talk with us next time.

Stacy - Yeah, and the kids came up with proposals, and they were really creative, empowered, but it really just got away, what they were trying to avoid was this consumption mindset and what they were looking for was fostering flourishing, and growth, and kind creating resilience building experiences. So Joline, all families have values, but these families that succeed over the long term take the time to be much more intentional about their values, making them explicit, looking where there's shared values, and really creating this values framework, which collectively help them with financial estates, lifestyle decision making. Can you share a little bit more about how you use values at work in families?

Joline - So this is just a sample map, but it's meant to make a point. If you look at, in this case, what I said to all the family members is, give me your top five, most important drivers of financial decisions, what are those values? We did more with this, but just for this purpose, if you look at dad, he has marked tradition as one of the drivers of his financial decision. Mom didn't mark tradition, but she did mark relationships. So one of the reasons that I really love mapping out everybody's key drivers is that it is true that it may be mom and dad share a lot of values, but if they're not also looking at what their priorities are, then when they get in tension or when they disagree about something, and it doesn't have to be just mom and dad, it can be mom and mom, and mom and grandma, and the daughter and whoever, you will see though, in this example, if tradition is driving dad and relationships are driving mom, and they both share interest in those, but have different priorities. They won't be able to understand, unless it's explicit, where their differences are. And so I have come to understand that it's not just mom and apple pie to come up with the things you share, what you want to understand is what are the priorities you assign to those values and how do you use them? And when do they come up as something that help you align? And when do they come up as something that gets you in conflict? And it's when they're in conflict that kids will most often suffer from the mixed messages that come in from families.

Stacy - Yeah.

Joline - I don't mind mixed messages. I think it's unrealistic to think that everybody in the family's going to have the same values, but when they are transparent, when it's clear what those differences are, then you can talk about the differences, not the conflict itself, because the conflict of course is just the symptom of these different values. So I would just urge families who are being mindful about values, go the next step and really map them out.

Stacy - Great. Joline, we have six minutes left and we have so many great questions. So I am going to rapid fire, we're going to go, folks, right to the top of the hour, I'm going to get as many questions as I can.

Joline - I'll be fast.

Stacy - Someone's asked us to show the intellectual capital slide again. So let me go to this question around financial literacy.

Joline - Yes.

Stacy - And this listener thinks that financial literacy is just as important in math and English, and how can we incorporate more financial literacy and the wonderful suggestions you've offered into school curriculum and other school programs?

Joline - Oh man, this is a hard one. The research is very disappointing, and the reason is, schools have tried to do this all over for a long time. It turns out that because financial literacy is so tied to family values, that trying to do it apart from family values means that the information, the learning in schools just isn't that impactful. It's one of the reasons I moved away from trying to, you know, press my information into schools and started to work directly with families. I think that it is the holy grail, everybody's trying to figure out how to do that. The research on why it's not happening is partly that schools are under siege, they're trying to teach so many things, and this is hard, it takes a lot of time, and it's expensive to teach. So we should go on to the next question. That's a fab one, and I'm happy to chat farther, but.

Stacy - Yeah, I'd love to dig in deeper at a later time to that one. So much there. Okay, so the next question is kids think of the family wealth as theirs, but the parents created it through hard work, maybe a little bit of luck, and how do you communicate that it is theirs in some sense, but they need to go out and earn it on their own?

Joline - There are two ways. One is in that income story I told earlier, I said there was a line in there for earning, kids need to be imbued with an earning ethic very early on so that they get that for themselves. And then the second thing is that families are reluctant to start working on what is a trust and how do we teach about beneficiary behavior, beneficiary development. I am a great believer in starting beneficiary development around the age of 10, 11, or 12, because I think it's important to help kids understand they are stewards in many cases, and also they have responsibilities, it's not just that they get windfall from parents.

Stacy - Joline, at what age should I give a kid a credit card?

Joline - When they are ready. For some kids that's, you know, when they go off to private school, there are some kids who are ready at 12, there are some who are still not ready at 18. And I really mean, readiness is, are they balancing the privilege of having the card with the responsibility of keeping track of where that money is going, and how it gets paid, and how it affects their credit score? So those are all factors that go into when you decide. And you never pay off a child's balance to get their credit score better, it's just self-defeating

Stacy - So those bailouts, well intended, backfire.

Joline - But dangerous, yes.

Stacy - Should I freeze the credit for my children for identity theft safety?

Joline - Sure, I mean, whatever would do for your own identity theft safety, you certainly want to do for kids. We haven't even talked about financial identity theft or security, another whole topic, but that's, again, a big one because kids are tracked from womb to tomb these days. And you probably aren't even aware of all the ways they are tracked, and that too is something to be mighty conscious of. So I would say, you know, it's probably up to me to make sure I add a slide on here about financial safety. So yes, whatever you do for yourself, by all means, do for your kids. Oops. Are you there, Stacy? I can't hear you. Oh, there you are.

Sophia Smith - Oh, no, we still can't hear you, Stacy. It's Sophia on the back end from marketing. Well, Stacy, I mean, we wrapped up anyway, we're right at the top of the hour. So why don't we wrap up here. Joline and Stacy, thank you so much for this fantastic conversation. I just want to remind everyone, if you'd like a copy of the slides, you can email our SVP at and we'd be happy to provide those to you. And a recording will be available on our website in a week's time. Thank you so much everyone for joining us. Joline, any last words?

Joline - No, I just hope you all, if you've got questions, add them in now, because I'll also be respond to people who've put questions in the chat box, and Stacy and Sophia will get that out to you.

Sophia - Awesome. Thank you all, have a great day.

The guest speaker(s) is neither an employee nor affiliated with First Republic. Opinions expressed by the guest speaker(s) are solely their own and do not necessarily reflect those of First Republic. This information is governed by our Terms and Conditions of Use.