Banking on Digital Growth
Banking on Digital Growth

Episode · 6 months ago

179) #ExponentialInsights - How to Teach Kids Sound Financial Habits

ABOUT THIS EPISODE

After graduating from high school, most schools have taught us what the insides of a frog looks like or that mitochondria is the powerhouse of the cell…

But how many teach taxes or investment strategies?

For Chad Willardson, Founder and President at Pacific Capital and author of Smart, Not Spoiled, sound financial habits begin early — and the financial brands who help kids learn are poised to gain loyal, life-long customers.

Join us as we discuss:

  • The challenges parents face when teaching financial literacy
  • The best ways to inculcate sound financial habits in kids
  • Why learning to earn is as important as learning to manage money   

You can find this interview, and many more, by subscribing to Banking on Digital Growth on Apple Podcasts, on Spotify, or here.

You're listening to banking on digital growth with James Robert Laigh, a podcast that empowers financial brand marketing, sales and leadership teams to maximize their digital growth potential by generating ten times more loans and deposits. Today's episode is part of the exponential insight series, where James Robert Lay interviews the industry's top marketing, sales and FINTECH leaders, sharing practical wisdom to exponentially elevate you and your team. Let's get into the show. Greetings in Hello, I am James Robert Laigh and welcome to the one hundred and seventy ninth episode of the banking on digital growth podcast. Today's episode is part of the exponential insight series and I'm excited to welcome Chad Willardson to the show. Chad's been almost nine years as the senior vice president of investments at Merrill Lynch before Founding Pacific capital. In Two Thousand and eleven. He is also the CO founder of gravy stack, and APP and baking platform designed to empower parents to teach kids to be smart with money. And in two thousand and twenty one, Chad wrote smart, not spoiled. which became an Amazon number one best seller, and is exactly what we're going to talk about today, as I'm a big believer in empowering the next generation for financial success. Brings a tremendous growth opportunity for financial brands to capture today. Welcome to the show chat. It is so good to share time to today. Buddy, grateful to be here. Thanks for having me. Absolutely before we get into your book, smart not spoiled. I always like to start things off on a positive note. What is good for you right now, personally or professionally? It's always your pick to get started. Vicen is great, first and foremost. I'm looking out the window and it's eighty seven degrees and sonny in early March, so there's no complaints here in southern California. Business is great. We were growing exponentially right now and adding a lot of great people to our team. Personally, I would say one thing I'm excited about my daughter, my oldest daughter, who's seventeen. She just got signed and sponsored by Air Jordan and Nike for basketball, which is a really big deal. It just happened last week, so that's something that we're super excited about. Unlimited Air Jordan and Nike stuff coming to the FAM starting next week. So that is that is definitely something to be excited about. And it's interesting you say that because I am watching and I'm a little late to the game on this one, the last dance. I don't watch a lot of TV. Actually we had canceled Netflix and then we got our subscription back to watch Cobra Kai and then I was like, well, everyone's talk about this last dance and maybe it's worth ten hours of my life. And it's brought back so many memories as a kid for me, you know, watching Jordan growing up and to kind of get just behind the scenes of that story. And I just finished up the one talking about the sponsorship deal that he did with Nike. So, man, it's interesting to kind of bring that full circle with interesting with where you're at with with your daughter. So congratulations. So that I know. And another thing that you've been doing too, and had a great conversation with Scott back on episode one hundred and thirty five, gravy stack. Yeah, how are things progressing there on that front? And and as we have many listeners from marketing sales leadership teams at banks crediting and S Fintech would have been some of the lessons that you've learned on this journey of starting up a Fintech. Yeah, so it's very exciting. gravy stack is our kind of our tagline motto is game, learn, earn, much more than just a debit card for kids, better than allowance. We're helping kids have fun, earn money and get ahead, and so it's it is much more than a debit card for kids. We're really incorporating...

...a lot of cool game features that will keep kids engage. We've got an in game currency called Grit so they can earn grits, but it's also a chance for them to earn real money and become entrepreneurs and learn about what they're good at and how to how to make money, how to manage money. So it's exciting. Our launch state is actually five hundred and twenty nine, not coincidentally, but five hundred twenty nine, two thousand and twenty two. So we're just a couple months away from there and Scott Donal all I've been working daily on developments, just getting feedback from parents and kids and teens and trying to work on making that experience as kids log into the APP is as fun and engaging as possible. I think it's important the way that you frame that, because I'm a big believer. You know, it's not just about managing money, but it's also about making money. I think that's an exag a huge gap that we have right now within, quote unquote, financial education, financial literacy, which we're going to talk about, and that's where your book comes into play. SMART, not spoiled. It does connect back to the work that you're doing with with gravy stack, as I mentioned in my opening comments, and I see a tremendous growth opportunity to here for financial brands, for fintext to create or capture by educating and empowering parents to educate their children to feel financially confident, to be financially successful. Why did you write this book in the first place? I wrote this book because, Number One, I have five kids, my wife and I had five kids, and we understand how important it is to teach kids how to be smart, not spoiled. Everyone talks about how will kids today have all this stuff that we never had, and that's true. Technology has changed the game and they also maybe don't have an appreciation for money because everything is digital and so they don't see necessarily the dollars in and the dollars out. That's a group, but that's not really their fault, and the schools aren't teaching money. So I felt like I had to put something out there. As a father of five and as a financial expert, I had to put something out there that was geared towards promoting financial literacy and financial independence and helping that become more of a family conversation, something that people avoid talking about at the dinner table. I wanted to make it more normal. So that's that's why I wrote the book. That's a great point to make. It, I would say, normalize some of these conversations, normalize these discussions. I had jill are Grio on. She works in the mortgage space and we are talking about this idea, even just her own personal struggles financially. She has a financial coach, she works with the Financial Gym, and I think the more that we can facilitate these dialogs and discussions, the better off we're all going to be. I have a tremendous amount of conversations with financial brands, banks, credits around the world. When it comes to looking for growth opportunities. They ask me a lot of questions about future generations. Ten years ago, you know, the big the big buzz was millennials. But millennials, they're now all grown up. And and then now it's Jin z. If we look ahead in the future, it's going to be Jin what some are calling Jin c generation, covid. What do you see, and you touched on this, but maybe we can have a little bit deeper what do you see as some of the greatest threats for future generations when it comes to financial success, when it comes to feeling financially confident? I think it's having a base foundation. Most most of these kids graduate high school not knowing anything about investing or debt or stavings or compound interest or financial planning. You know, they can graduate high school and know about dissecting a frog or where to the inner parts of a cell, and yet they have no clue about taxes. And yet they're going to be filing taxes after they get their first pay check and their first job out of high school. And so there's just a lot missing and I think that the more we move towards digital currency, it's even less tangible. So these kids need a base foundation. They're not, you know, it's like when you go on a Disney cruise or, let's say you're at a casino or...

...you're at a an amusement park, you're using let's say a membership card or a token or wristband to pay for things, and it's a proven fact that when you're when you're not using actual currency or using a substitute like a token, a chip or a card, you're you're more likely to spend a lot more because it does doesn't seem real to you. Don't feel this the spending effect. And so, with that being the movement towards this digital age of, you know, spending and consuming, kids see you punch something in on your phone and then there's boxes on the flows next day. Yeah, that so that they don't see the reality of money and how it works. And if they don't know how it works, how are they ever going to really manage it or earn it? That's a great point. It's almost like we have to figure out a way to make the intangible of digital tangible again, because when you think about, like you transforming behaviors, I look at four different stages. People have to see things differently so that they can begin to think differently. But just because you think differently doesn't mean that you're going to act differently. There's the feeling in the emotion that bridges the gap between the the thinking and the action. You know, even looking at some research, more than half of JEN Z and millennials are investing in Crypto as, and so there's that intangible piece. Once again, you're solving some of this problem, you know, through the work that you're doing with with gravy stack. But I'd like to get your take. Where might there be opportunities for incumbents like banks, credit unions, maybe even other fintext to address some of these threats here? How do we begin to solve some of these problems that are going to, I think, have some pretty big implementations for US culturally societally? I mean, we already know eighty five percent of Americans fill some financial stress right. Is that going to grow in the years to come and what can we do about it? Yeah, I think there are a lot of different answers to that question, but I would say the challenges we face as a society financially is that we're overloaded with information and it's difficult to sit through what matters to me and what doesn't matter to me. So family reading the financial news is bombarded with things most likely to be afraid of. Fear based. Operating out of a space of fear is very challenging. It's hard to be successful when you're afraid that the world is going to collapse every time you wake up. So I think one one thing is where do I get my information from when it comes to financial things and do I have a base foundation? Do I had? Do I understand where what it comes from? Do I have any sense of where I'm headed financially? I think that's important people that people just have no idea. So it's not their fault. They're not experts, but they they don't know where they're headed. If I continue doing the things I'm doing today financially, where am I going to be in ten years and twenty years? And the sooner that banks, credit unions or Fintech companies can reach and teach people, the sooner they can get that process and that foundation and the more successful these people and kids will be in the future. It's interesting and I've never really had this thought before, but the negative news cycle. It kind of creates that fear based behavior, the scarcity mindset. There's an opportunity, I think, to maybe even transform some of that. You mintioned financial literacy, financial education. Another opportunity that I'm seeing is really building in financial coaching, as I mentioned before. You have the financial gym out of New York is starting to do some of that, but building this into the actual operational model to put the transformation of people's lives over just to commoditize transaction of dollars and sense where's maybe expand upon the thought from your mind. Yeah, I think that it's easy to make money as a financial...

...firm of bank or whatever, just having transactions and debit cards and credit cards and things like that, but if you actually engaged in the teaching and coaching process and helped people answer the questions that they have no one else to go to. You know our clients at Pacific capital. That's a different class of people. These are people with significant means and wealth and resources, but the average person out there doesn't have a financial advisor, financial coach, and so, as a bank or credit union, if you can offer, if you can offer some kind of personalized coaching on the main issues that your customers have and maybe just be that that sounding board for big decisions they have, and I think that's something that would really make a difference rather than, like you said, just transactionally working with customers, yeah, but actually becoming partners in their financial success in some way. Well, I see I see a lot of opportunity even to create some income, new income streams, through programs like this, because I know a lot or the freaking out about the whole idea of overdraft protection and what's moving in that space. And if we lose that income, than what can we replace it with? This, to me, is one of those it's like lowhanging fruit. But it's a matter of transforming the mindset within the organization to think once again beyond the transaction. A lot of a lot of financial brands to I think, are held back, you know, when it comes to educating and Empowering Future Generations Because, oh well, that's a problem that we'll have to deal with in the future. But I look at this as more of like in both of us are in strategic coach with Dan Sullivan, who's been a guest on the podcast as well. It's a free zone opportunity because if we can go in and identify, and this is where some data analytics come into play, how many of our count holders are parents? Okay, well, then we can segment that list. Those parents have kids, those kids are future accounts and we know we see an accidus, particularly at like a community level, a Community Baker, Community Credit Union. They tend to go either on. They're going to the fintech route, the crypto route, they're going into the you know, the big nationals. Where's there the opportunity to do if almost a free zone of empowering parents to empower kids, because as you know that in your book, Seventy five percent of parents think providing financial guidance for their kids is part of a duty as a parent, but only thirty six percent have clarity on how to do that. Put that another way, sixty four percent of parents probably feel confused, frustrator overwhelmed when it comes to just talking to kids about money. How did we end up here? I think it's just it's become less and less common to talk about it and I think maybe it just came from the confusing financial world that we're in. HMM, with so many different sources out there is so much different things going on. You've got the markets all over the place. You've got defive've got nft's and CRYPTO. Well, you got people don't are not sure what that even is, and so it's like there's so much out there and it's accelerating at such a fast pace that I think a lot of people just kind of have thrown in a towel. It's like I'm just trying to get by and I'm not really sure what I should teach my kids because I don't have it all figured out myself anyways. So that that really is why I wrote the book and why I also created a free zone and joined with Scott, you know, me, me bring in financial content and him bring in the tech visionary expertise, and that's why I think maybe stack will be a big success. Digital growth is a journey from good to great, but sometimes this journey can feel confusing, frustrating and overwhelming. The good news is you don't have to take this journey alone, because now you can join a community of growth minded marketing and sales leaders from financial brands and Finn text who are all learning, collaborating and growing together. Visit Digital growthcom slash insider to learn more about how you can join the digital growth insider...

...community to maximize your future digital growth potential. Now back to the show. Yes, and I think that idea of the collaboration. I've spoken about it, you know time and time and get on this podcast. It's where one plus one has the potential to equal eleven. In the book you share seven money skills that kids must master before leaving the nest. And as a parent, you know with four kids of my own, I'm like this is this is beautiful, this is so well laid out, it's so easy to understand and and we were already having conversations around, for example, making money, like entrepreneurship. My my nine year old daughter, she's just a hustler. She's always looking for ways to make money, even my oldest son and and it's funny because even with with the coat the books that we get from strategic coach, I've made a deal with my kids. I'm like, particularly too oldness, who are nine and eleven, about to be ten and twelve, read a book, do a report and then present that to me and you can earn five dollars. And it's the conversations that have transpired from that have been phenomenal. But if you come back to these seven money skills that kids must master before leaving the nest, what is one that you would recommend the dear listener to who comes from a bank accrediting in our Fintech and they have kids? What would be the one that you would say start here, focus in on this? What would that be? If you could just pick one tough question answer, but I would say that invest early and often. I think helping kids getting gain investment experience as teenagers is extremely important. So it's not a brand new concept. Learning, you know, investing is just delayed spending. Yes, just a gratification. So if can we teach, can we teach and train people at a young age to become smart investors and have a make small mistakes when the money is small and not wait till they're almost retiring to make those big mistakes when the money is big? I think banks and credit unions would do great to have programs of maybe video programs or things to engage kids and investing. That could help them have a little brand loyalty so that these kids say, I want to bank with such and such company because they're the ones who helped me learn about investing and get excited about it. You know, there's a lot of opportunities there to really incentivize that that kind of a learning process for these young people. But teaching them to invest early and often is going to pay it the biggest dividends in the long run. What about learning to earn, which is what you noted in Chapter Five? Where might there be opportunities there to facilitate some of this at a local level? I see almost, for lack of a better word, Shark tank like scenarios. Yeah, of to really facilitate entrepreneurship and and I'm tell you why. I was just doing a career day for our oldest at his school and I got invited to come and speak to like ninety six graders for classes and I ask, you know, what's entrepreneurship? Just open it up like and maybe maybe one, maybe two in the entire class of around thirty kids they had an idea of what it was, and the remaining I'm like, let's talk about this, and it's like everyone left energize and excited. They're going to go out and start lemonade stands and, you know, Hawk jewelry to their friends at school. And you know that they've been making at home. Where's there the opportunity there? I think, once again, coming back to a local back to your point brand loyalty, to facilitate some of this at an early age, working with high schools to maybe bring entrepreneurship into the fold. I think there has to be partnerships in the community, with with...

...local schools and local kids organizations to where you're facilitating those opportunities, given them ideas, maybe even offering mentorships and coaching, maybe riding up resources and saying, basically, if you're interested, this is these are some of the things that we suggest or we've seen young people do to be successful. That's something in that word I've learned to earn is important, because it's one thing to manage money, but where does it come from and how do you get it? So teaching, teaching young people to be valuable, to find their sweet spot, find what they're excited about that also people are willing to pay for, and then helping them actually go out there and learn by doing. I think that's critical. It also might be kind of like a local Free Zone frontier play as well, because now you working with the schools. Now just for financial education now, just for financial literacy, but then you can also bring in local businesses as well, to your point on Mentorship, particularly like the SMB. And we know how critical the local community bank or Credit Union was during the whole covid crisis. They were the ones who stepped up, they were the ones who provided the PPP. I think that might be be an opportunity as well to do some more local collaboration and it all everyone would win, as like a win win win for everyone. As you look ahead towards the future of will just call financial services banking, what are you feeling most hopeful and excited about? Personally, as I look forward, I think I'm most excited about just the the way that things have become accessible to everyone. People can learn so much and there's so much access to investment opportunities. I think everything is become brought down to the average family that they can afford some kind of investment opportunity or financial literacy. I mean you can learn a lot on youtube even yeah, I started on Mary Lynch almost twenty years ago. You know, people had to call us to get stock prices. Like they couldn't even look up stocks, so they would call us to get stock prices and we would place stock trades for them on the Stock Exchange. And it's now, you know, a kid can open up a Roth IRA and began investing in all kinds of different things that they've studied about and learn about on their own. So I think the information wave has really opened up and there's there's pros and cons to it, but I'm excited about the fact that there's just so there's so many resources out there now that weren't there twenty years ago. Yeah, you know, it's interesting because we look at what Peter Diamandas writes about how everything you know gets digitized and then it gets democratize and then demonetize, and we're seeing that with like the decentralization. But but I feel like what you're you're tapping into here is almost demistification. We have to see mystify all of these things that have historically been very complex to make these ideas very simple, and you've done such a fantastic job of doing this in smart not spoiled. As we begin to wrap up, and it's been a great conversation, what is one simple thing, very practical, that a financial brand, a bank, credit infintech could do when it comes to educating and empowering their account holders, particularly parents, to educate and empower their kids to be smart and not spoiled. What's one small thing, one small step that they can take going forward if parents specific conversation topics that they can have with kids? We want to make family conversations about money healthy and consistent, and so I would say providing your account holders and your parents that you're working with here a list of things that you can talk about with kids about money and...

...you know, here's what here's what we recommend. Here's some resources, websites, videos, whatever you might want it to take your family too, but here are topics that you should start teaching them at a young age and I think just giving them the resources. It's hard to know what to talk about as a parent, and giving them ideas, sourcing those ideas is is going to be very beneficial and create some brand loyalty for sure. So a little bit of curation, a little bit of collaboration. I even I'm going to build upon this idea. I have seen and I've worked with a couple of financial brands that have built programs around thinking like this that are facilitating more of pure group dialog and discussion that they didn't leave and then they talk at home and then they come back and then they're like what it would what happened, what came out? What would maybe be a great talking point or discussion open or, as a parent, to bring back in and have a conversation, say around the dinner table, maybe even just family budgeting. HMM, talking about the bills of the house. You know what is, what does it cost to to do live the way we live? You know, maybe you don't want to share your income stuff with your kids yet. That's fine, but you could talk about how much we spent on groceries, how much we spend on the light build the electricity, the you know, the AC and the gas, the rent, the mortgage, whatever it might be. But I think having a conversation so the kids can appreciate what what we're paying to live the life that we live. I think it goes over their heads and they don't understand, but I think that's something that we can start to have a conversation about. I remember my first job, one of my very first jobs, was an old navy and I was making, I think, like six dollars and ten cents an hour. I was like eighteen years old and I'm having some of those conversations with my kids like, for example, groceries or going out to dinner, like it would take this many hours to pay for this meal right here, and like that's where like light bulbs start to go off. It's like Ah, I'm starting to see, I'm starting to understand right. And the other thing too, that that we have done as a family, and I think it comes back to a point you're making before about scarcity mindset versus an abundance by set. My kids will call me out on this if I don't ask them this one question at dinner. Now the like Dad, dead, are you going to ask me what what was good for me today at school? And I'm like, Oh, yeah, so tell me what was good for you. It's like they just it's everyone goes around and they talk about, like, you know, what was good about their day, and it really just it's a great conversation that I think you know. It's not hard, it's just one that we have to commit to make going forward because even to the point in your book and as I've shared on stage many times before, it's far easier for parents, even for couples, to talk about sex. Then it is to talk about money, and I'm right there with you. I want to normalize this because once we start talking, we can bring some new awareness going forward into the future. And back to your point on tools and resources. Smart not spoiled, the seven money skills kids must master before leaving the nest, is a great resource to facilitate that. Where can someone grab the book? Who is listening? Where can they go to get this? Best Place, honestly, is just Amazon all formats and we got the audiobook to Kendle, the ebooks, the hardcover and the soft copies. So Amazon's the best spot get the book. Have great conversations. And speaking of conversations, this has been a good one, Chad. What is someone? What is some way that someone can continue to the conversation with you going forward to kind of just ye neck to reach out. Very active on Linkedin. So if you can look me up Chad willards and on Linkedin and follow there, and then Pacific Capitalcom is my main, main business page. So those are the two places you can find me connect...

...with Chad, to learn from Chad, and Chad, you are always sharing good insight on linkedin. I can attest for that. So so connect with him for sure. Chad, thanks for joining me for another episode of banking on digital growth. This has been a lot of fun today, Buddy. Thank you. Appreciate you having me on as always, and until next time, be well, do good and make your bed. Thank you for listening to another episode of banking on Digital Growth with James Robert. Play to get even more practical and prooven insights, along with coaching and guidance, visit digital growthcom slash insider to join a community of growth minded marketing and sales leaders from financial brands and Fintax. Until next time, be well and do good.

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