Ep 262: The Yes Problem: Raising Grateful, Grounded Kids When You Can Afford Almost Anything

Quick question.

Did your parents ever sit you down and give you a formal money lesson like a full on PowerPoint presentation about compound interest over dinner?

Yeah.

No.

Me neither.

Most of us learned about money in one of several ways either.

Our parents talked about it constantly and it was stressful and they talked about how money was a limiting factor.

Before we get started and dive into the meat of this episode, let's make sure that you are doing all the things.

Check out our Instagram page, check out our YouTube channel, and make sure to go to Facebook and type in Weekly Wealth Podcast.

We're doing the best we can to put out some really incredible content and I want to teach the world and I want to grow this tribe.

Like I always say, how we handle our money should positively impact our lives and the lives of those around us.

And I hope that this podcast and our social media content can be a little piece of the puzzle and in your life.

Welcome to the Weekly Wealth Podcast.

I am certified financial planner David Chudick.

This podcast and my wealth management practice are both designed to help the mass affluent to live better lives by how they handle their money.

We talk about financial strategies, prosperous mindsets, and simply how to build true wealth.

So come on and let's enjoy this journey together.

All right, so let's paint a picture of the average American adult's financial life.

And I want you to listen to this and not feel bad because some, some of this may or may not apply to you.

But here are the numbers and these are current as of 2025 and 2026, so the average American households are now carrying 18.8 trillion.

That's T R I l l I o n in debt.

That's an all time high.

That works out to over $105,000 per household.

The median emergency savings in this country is $600, not 6,000.

We're talking 600.

And nearly one in five Americans has zero emergency savings at all.

Nearly 37% of Americans say they couldn't cover an unexpected expense of $400.

46% Of credit card holders are carrying a balance at an average interest rate of 21%.

And the median balance in America for 401ks is $44,115 for people approaching retirement age.

That's it.

That's what they've built.

And yes, some of those adults that are part of those statistics are adult children of wealthy and high net worth.

So a lot of where we end up financially is because of our long term behaviors and habits.

And today I want to talk about how to Train your children to have the right long term behaviors and habits.

Because here's the thing, schools aren't fixing this.

As of today, only 27 states require a personal finance course to graduate.

That's actually up from where it was a few years ago, but it still means nearly half of the country sends kids into adulthood with zero formal money education.

So if it's not coming from schools and it's not coming from the culture, where does it come from?

Well, it comes from us as parents.

From dinner table conversations, from.

From the car ride to the grocery store, from the first paycheck conversation.

One of the biggest mistakes that parents make is waiting until their kids are old enough.

But research shows that kids form money beliefs and habits as early as three to five years old.

They are already learning.

The only question is, what are they learning now?

One of the reasons money conversations feel so awkward is because we've been taught that money is private, money is shameful, or it's complicated, or maybe even that it's the root of all evil.

Right?

But here's how to flip the script.

Let's talk about money like it's normal, because it is.

But let's watch how we speak about money to our children.

Now, people on the lower end might say things like, we can't afford that.

But instead, what if you use a different set of words to your children?

Maybe that's not in our budget right now.

Or we're choosing to spend our money on something else.

And that's crazy, but it shifts the, shifts the mindset from scarcity to intention.

So we can't afford that.

That's a scarcity mentality.

If we're saying we're choosing to spend our money on something else, that is we are empowered.

We are choosing to spend our money on something else.

And we have the power to affect our financial position.

We don't have to be hushed over conversations about bills when the kids go to bed.

Age appropriate transparency is healthy.

So maybe when you take your kids to Chick Fil a or you take them out to eat, ask them, like, how much do you think this dinner cost?

Right?

They need to know what basic household items and services cost.

Now here's the thing that's really important.

And this goes with every area of life, specifically now we're talking about money, but in every other area.

So your job as a parent.

My job as a parent is to model the behavior that you want to see.

So you understand, right?

Kids are watching us.

And if you don't think they're watching you, you wait Just wait until you first get your kids their learner's permit to drive and you're telling them what to do.

You're telling them make sure that they have their signals on and everything else.

And then you just wait until the first time you change lanes without a signal.

They are going to get you because they're watching you.

So if they see you stress spend or impulse buy, they are going to stress spend or impulse buy.

If they see you avoiding opening your mail, opening your, then that's what they are going to absorb.

Now, if you are like many of the listeners of the weekly wealth podcast, you are successful, you are a high earner, you are high net worth, and some of the habits that got you there, your kids are seeing those as well.

So maybe your kids have seen that you strive to offer value to the world and that's why you have a higher income.

Maybe they've seen you and you've talked to them about putting money aside out of each paycheck.

Maybe they've seen you give intentionally.

Right?

So these are some of the habits that we might want to model for our children.

So when do you start talking to your kids and how do you start talking to them?

Well, I think like age 3, age 4, age 5, age 6.

I mean, these are times when kids can start to grab very basic concepts.

Now, you can keep it visual, you can keep it tactile, and this might get a little bit complicated in today's world of Venmo.

So we're gonna use physical money, but how about like a good old fashioned piggy bank or maybe a three jar system?

So you give them three physical jars.

They can spend, they can save, they can give.

When they get money for birthday, for chores, for whatever, they divide it up.

This teaches them that money has different purposes.

Maybe when you go to the grocery store, maybe when you go shopping, you could say, hey, we have $10 for snacks this week.

What should we get?

Now that'll do two things.

It'll help them to learn how to prioritize, and it actually will maybe help them with some basic math.

Right?

So if, if you only have $10 to spend, you need to start doing some basic math to figure out how many items will equal less than $10.

So these are life lessons, right?

And then you can name, you can tell your kids what you're doing.

Like, I'm using my debit card.

This takes money right out of my bank account.

Kids don't know what a card is.

So demystify it.

Let them know that what a debit card is let them know what a check is.

Even though probably at this point we don't know what checks are because they're almost outdated.

But you get my point.

So start at the early ages and let's help our kids to learn at age appropriate levels how to direct money to where they want it to go and how to prioritize.

Now, as you get to age 7, 8, 9, 10, 11, 12, you know, kind of the preteen years, let's introduce allowance tied to contribution, not just existence.

So some age appropriate chores should equal earning money.

Now, I don't care who you are, your house costs a lot of money, right?

And your kids are part of the family, so they should have some responsibility in keeping it clean.

And yes, I know when your 6 year old cleans something up, even under the best circumstances, you probably have to go behind them and clean it again.

But you get my point.

So let them make mistakes, let them take some of their allowance and if they blow some of their money at the dollar store, that's great because wouldn't you rather have them make a three dollar mistake now instead of three thousand thirty thousand dollars later?

And let's start talking about wants versus needs.

So this isn't like making people feel guilty, but we can say, hey, is this a want or is this a need?

Right?

And it doesn't have to be that wants are bad, because wants aren't bad.

Wants only aren't optimal when you haven't taken care of the needs.

Of course, you can open a savings account or some sort of an investment account with them.

You can take them to the bank, help allow them to help you to open an account online and show them the account, help them watch it grow, make it real.

I think that's really important.

Then introduce the concept of the future you.

So hey, if you save $5 a week, in a year you'll have $260.

What would you do with that?

So make it real.

And let's talk about the things that are important with regards to money for our kids.

So do you think these are good habits?

Do you think these are good lessons for our children?

Be really interested to know.

Go to www.weeklywealthpodcast.com and click on the microphone icon and leave me a voicemail.

Now, as we get to age 13, 14, 15, up to 17, 18, when they're really right on the cusp of becoming adults, this is where they can be motivated by autonomy and relevance.

So give them a debit card with an actual budget, so not an unlimited Budget set in a monthly amount for their spending and then let them manage it if they run out.

Hey, like if I run out of money as a grownup, I have problems.

So yes, you can bail them out to the extent that you feel is appropriate, but let them learn to start managing money.

Because in all of our lives, when the money's gone, the money's gone.

Here's some things that I think a lot of people shy away from.

So talk about your actual finances at a high level.

So our mortgage costs $1,000, $5,000, whatever that number is.

Our groceries, our ex.

Here's what we have left over.

Teenagers who understand real household finances make better decisions and think about if your teenager knows a ballpark amount of what it takes to support their current lifestyle, don't you think that might affect their career choices?

Don't you think that might affect their expectations when they're first going out into the workforce?

Because if your parents took them 30 years to get to that lifestyle, the odds are it's going to take you a while to get there as well.

Some other things you can do with your teenagers is help them to invest.

So you can open a custodial brokerage account and you can put some money into it every month, you can watch it together, you can explain what it means and you can can start building some true wealth.

Talk about the cost of college, honestly.

So I always say that one of the biggest decisions that your teenager and one of the biggest decisions that you as a parent of a teenager can make is where you're going to go to college or where they're going to college and how it's going to be paid for.

So don't shield them from the numbers.

Help them understand debt, help them understand scholarships, and help them understand trade offs before they sign anything.

Okay, so just because your favorite football team is at a certain university, that does not mean that that university is the right university for you.

Maybe you shouldn't even be going to university.

Maybe some sort of a trade is appropriate for you.

So I don't have the answers for your kid with regard to college, but I do want you to talk about the costs of college honestly and especially if student loans are going to be a reality.

And make sure you understand the ramifications of the student loans.

And then, you know, most kids start getting little part time jobs when they're teenagers.

Well, when they get a paycheck.

Let's talk about what is this FICA stuff?

What does that mean?

What is Social Security?

What about federal taxes?

Here's where, you know, here's where that goes.

Most kids are shocked by how much money comes out, and they would be even more shocked if they saw your paycheck.

So we want to give our kids the basic financial literacy training, but we want to teach them positive and proactive and money philosophies that suit them well.

I talk about it all the time.

Money is such an emotional subject.

Money is such a qualitative subject that, yeah, our money mindsets become really important in relation to our quality of life.

All right, so now I want to talk about a challenge.

If you are doing well financially, if you've worked hard, you have a high net worth, you have high income, like, how do you raise kids who are grateful but not entitled?

And this is a tough one.

This can be really, really hard because when you give your kids too much, maybe they tend not to work as hard, but if you don't give them enough, then they're not enjoying the fruits of your labor.

So, like, how do you know, like, how do you raise good kids when you've done well, who are not, let's call them spoiled, entitled little brats, right?

Because nobody wants a spoiled, entitled little brat.

So I'm going to spend a few minutes on something that doesn't get talked about enough because it's actually one of the harder parenting challenges that I see among my clients.

And that's, what do you do when the end.

If you're a high income earner or a successful business owner, you've worked incredibly hard to build a good life and you want your kids to have opportunities you didn't have.

That's a beautiful instinct.

But here's attention.

The very success that lets you give your kids everything can also be the thing that robs them of the lesson they need most.

So I want to give you some numbers here because this isn't just anecdotal.

There's real research on what happens to kids raised with unchecked access to wealth.

So studies published in the Journal of Positive Psychology found that children raised in affluent households are much more likely to struggle with entitlements.

And that's believing that success is determined by external factors like their family's wealth and status rather than their own effort.

They were also more likely to have difficult understanding the value of hard work.

Research from the American Psychological association found that upper class children can show elevated rates of anxiety, depression and substance abuse, and that two of the primary causes are excessive pressure to achieve an emotional isolation from parents who are consumed by the demands of building wealth.

There's also a well documented pattern in multi generational wealth.

In fact, the research, and I've seen this with client families, suggests that fortunes built by one generation are frequently wiped out by a third, by the third generation through a combination of overspending and a weakened work ethic.

There's actually a real life example of this worth sharing.

Tom Rogerson, who is now a senior managing director at Wilmington Trust, grew up in a family where his great grandfather had built a fortune of more than $78 million in today's dollars.

But his family never discussed money, never involved the kids in financial decisions, and gave them unlimited access to everything.

By the time Rogerson was in his 20s, the family had gone through seven planes and six yachts.

And when it came time to inherit, there was almost nothing left.

Today, he counsels wealthy families on exactly this problem.

His message, if you can prepare your children to be responsible with your wealth, then you don't have to worry about leaving them more.

And here's what's fascinating and what I find validating is that some of the wealthiest people on earth have landed in exactly the same place on this question, and they're being very public about it.

So the guy named Warren Buffett, you may have heard of him, worth somewhere north of 100, but billion with a B.

He's giving away 99% of his wealth.

His quote on inheritance is one of my favorites.

He says he wants to leave his kids enough to do anything, but not so much that they can do nothing.

Bill Gates is leaving less than 1% of his fortune to his three children and recently explained why.

It's not a favor to kids to have them have huge sums of wealth.

It distorts anything they might do.

Creating their own path.

Now, what about Gordon Ramsay, a guy worth $220 million?

He says his kids fly economy class because in his wor, they haven't worked hard enough to afford business class.

His inheritance plan for five children, a 25% deposit on an apartment.

That's it.

And he means, and he says it's not mean, it's intentional.

Shaquille o', Neal, who earns generational wealth level money, he's told his kids directly, quote, we ain't rich, I'm rich.

He requires his kids to earn degrees before he'll even discuss investing in their ideas.

Now, these are all very different people with very different backgrounds, but they've all landed in the same place.

They've seen what unlimited money does to kids who haven't earned it, and they're choosing intentionality over generosity.

A recent survey found that 67% of millionaires are worried about leaving too much money to their kids, concerned that it will make them lazy, unmotivated or financially irresponsible.

Two thirds of these people who actually have built wealth are scared to pass it on without guardrails.

That should tell you something.

So here are some strategies for high net worth families and I'm really interested to know what your thoughts are on these.

So the first thing is you can create artificial cre.

So the first thing is that you can create artificial constraints on purpose.

Even if money's not an issue, give kids a budget and make them stick with it.

A clothing budget, a weekend spending budget, a fun money amount per month.

Make the budget and stick with it.

This constraint really isn't about the money, it's about the decision making muscle.

That muscle only grows when we exercise it.

So if your kids feel like there's really no reason to be purposeful with their spending, there's always going to be money there, then that is going to maybe give them less decision making ability when they get out on their own later on in life.

We could buy you anything we want, but we're choosing not to because we want you to learn how to choose.

So try that on as a mindset, as a parent.

So another thing you can try is to make them earn something, even if you don't need the money.

So don't hand kids an allowance for just existing, tie it to a contribution.

Even wealthy families should be having kids do real chores and earning real money for them.

Better yet, as a business owner, you can put your kids on payroll, give them a real job, let them feel what it means to earn a check with their name on it.

The psychological difference between money you earned and money you were given is enormous.

And your kids need to feel both sides of that to appreciate.

You can also delay and teach and not just give.

So when your kid wants something expensive, maybe a new phone, a gaming setup, a car, don't just buy it.

Make them research it, wait for it and contribute towards it.

Even if you buy it in the end, the waiting and research teaches them that something, something has to be done and that the instant gratification is not always the best idea.

So one strategy that I love is like, why don't you match some of your kids savings so they put in 500 towards something.

You put in five something, now they have skin in the game and you're still giving them an opportunity.

It's almost like a family version of a 401k match.

Now, how about let them see the other side of wealth and see how other people live.

So what about volunteer work, mission trips, working in the community?

Giving should be a cornerstone of any healthy relationship with money and high net worth.

Families are uniquely positioned to model generosity in a big way.

You can also involve your kids in the family's giving decisions.

So we have X amount of money to donate this year.

What causes matter to you?

Let's research them together and let's see how we can be generous to them.

When kids understand that their family's wealth can change lives, they start to see money as a responsibility, not just a perk.

And number five, let's be honest about wealth.

Let's be honest, but without making it their identity.

So a lot of high net worth parents avoid talking about money because they don't want their kids to feel entitled or tell their friends.

But what does this silence do?

It creates its own problems.

Kids either feel shame for what they have or they discover the wealth later and have no framework for it.

So have age appropriate conversations.

You know, maybe our family has been fortunate and we've also worked very hard.

And with that comes some responsibility.

If you have a family, business or significant assets, consider a family meeting or even working with an advisor to discuss what that means for the family.

Estate plans, inheritance expectations, values around money, etc.

But I would involve my kids on an age appropriate level and I would keep them in the loop.

Let's talk about a mutually beneficial strategy that business owners can use when trying to teach their kids about money.

So if you're a business owner listening to this, and a lot of you are, I want to give you something extra because there's a strategy available to you that W2 employees simply don't have access to.

And it comes to two things that I love, teaching your kids about money and reducing your tax bill legally.

So I may save you some tax money here.

Now remember, I'm a cfp.

I'm not an accountant, I'm not an attorney.

So check with your professional advisors to see how this fits in your personal financial situation.

But why not consider hiring your children as actual employees of your business?

And before you roll your eyes and think that sounds very sketchy, stick with me here because the IRS explicitly allows this and the benefits can be significant.

So why would you do this?

Well, the wages that you pay your kids are a legitimate business deduction.

They come off your vid, they come off of your business income, which reduces taxable.

If your child is under 18 and works for a sole proprietorship or partnership owned entirely by the parents.

Those wages are exempt from FIC taxes.

That's Social Security and Medicare.

So that's saving you 15.3 right off the top.

The child will pay income tax at their own rate, which will almost certainly be zero.

So that means your child in 2024 could have earned up to $14,600 and pay no federal income tax.

So you deducted it at your higher rate and they received that money tax free.

That's genuine wealth transfer right there.

And the tax code allows to it.

And if you structure it right with a Roth IRA contribution from their earned income, yes, a child with earned income can open up a Roth ira.

Now you've turned a tax deduction into decades long compounding machine for your kid.

I'm going to do real, real simple math.

If you have any questions about this, email me davidarallelfinancial.com but let's say you're a business owner in the 32% tax bracket and you pay your 15 year old $8,000 for real work to do in your business.

Now again remember, this has to be real work.

You have to keep a log how much you're paying them.

You can't pay your kid $200 an hour to sweep the floor of your lobby.

It has to be real work at a reasonable wage.

Okay, so you paid your kid $8,000 and at a 32% tax bracket you're going to save roughly 2,560 in federal taxes.

Alright?

So your kid will owe zero in taxes.

And even if you drop in 3,000 of that into the Roth IRA for them, that money has potentially 50 years to compound.

That's not a loophole.

That is the tax code working as it is intended.

So now this is important.

It has to be real work.

So they have to be legitimate document work, documented for services.

So social media content, cleaning, data entry, landscaping for your office, stuffing envelopes, helping out events, whatever age appropriate work is actually needed.

Pay has to be reasonable.

So yeah, you don't get to pay your 10 year old $150,000 per year to hand you paper and to empty the trash.

The wage must be comparable what you'd pay a non family employee for the same work.

You have to follow payroll procedures.

So issue paychecks, run them through payroll file A W2, all that good stuff that you're doing for your other employees.

You have to keep documentation and make sure that your entity structure is correct.

So work with your CPA and your tax preparer.

But here's where it gets good when they're getting a paycheck.

They now have some money that they can personally deal with.

And writing them that paycheck also gave you a tax deduction.

So that is a pretty cool thing.

I want to give you one more strategy that we used for one of our children for college.

Now, this may or may not work, depending on the real estate market in your area, but when our oldest had finished his freshman year in college, we decided that the dorms were really expensive, apartments were really expensive, and we looked around to buy a rental house.

Now we were able to find something.

And this is back, I don't want to brag, but during the COVID 3% interest mortgage rates, so that worked out really well.

And we bought a house, we put a little bit of money down and our son is listed as one of the owners of the house.

So that made it a property primary residence for tax purposes.

And we rented out two bedrooms and that rent paid all of the mortgage and the expenses.

So during his college career, after his freshman year where he was required to live in the dorms, we did not have any housing expenses for him and the tenants paid the bills for the home.

Now the home has gone up in value and the mortgage value has gone down.

So that's a really, really great scenario for us.

I don't know.

Look and see if that works in your area.

See how the real estate number works.

See if it works for you.

And that may be just a little trick of the trade on how you can get free or almost free housing for your child in college and also build a little bit of worth, build a little bit of wealth.

All right, so let's do a little bit of soul searching here while we are wrapping up the podcast.

Think about some of your financial philosophies.

Think about some of the, the ways that you think about money and the relationship that you have with money.

And now let's think about.

You probably got those from your parents, didn't you?

Or at least a lot of them.

And in what way are you passing along money mind?

What money mindsets are you passing along to your children?

So are you one of those people maybe on the lower incomes, lower income scale, and you're constantly kind of criticizing those rich people who are greedy?

Are you someone who's saying, well, if I just I would have more money if xyz?

Are you someone who's constantly talking about thankfulness and gratitude to your children?

Are you someone who maybe has your net worth, your self worth, a little bit too tied up into material things and your kids are seeing that.

Are you someone who stress spends?

Are you someone who puts off major purchases for a day or two to make sure that it actually is something that they should do?

If, if you're married, are you and your spouse, are you dealing with money as a team and modeling how to deal with money as a team for your children once they get married?

All right, so again, how we handle our money should positively impact our lives and the lives of those around us.

And how we think about money ultimately affects how we handle money.

And a lot of how we think about our money comes from what we saw as children.

So this is really scary and this is a huge, huge responsibility because money is important.

People say money is not important.

Money is very important.

Not in the sense that it can buy us cool stuff, but money is good for the good that money can do.

So if you're a parent, think about how are you teaching your kids that money is good for the good that money can do?

Those are some deep questions.

All right, everybody, until next episode, I wish everybody a blessed week week.

Don't forget to share this episode with your friends, families, colleagues or co workers.

I would really be indebted if you helped us to build this tribe.

The information presented on this podcast is for general educational purposes only and does not constitute financial investment, legal or tax advice.

Parallel Financial is registered with the U.S. securities and Exchange Commission as a registered investment advisor.

Registration does not imply a certain level of skill or training, nor does it constitute an endorsement by the sec.

All investing involves risk, including the potential loss of principal.

Please consult a qualified financial professional before making any financial decisions.

And here is this week's bonus content.

There's no perfect time to start teaching your kids about money, but there is a cost to waiting.

So make sure that that at an age appropriate level, you are teaching your kids about money.

You're being purposeful.

You're teaching them how to have a proper and healthy relationship with money.

All right, until next episode.

I wish everybody a blessed week.

Thanks everybody.