$10,000 Lands in a Teen's Account — Here's What to Do First

15:04Elizabeth Ayoola:what would i have spent the money on as a teenager i was obsessed with sneakers i had a whole collection especially converse sneakers i had them in every single color i also was obsessed with changing my hair every two weeks at 12 years old i learned how to braid my own hair I started doing all the kids at school's hair. And then I had my own clients. So throughout my teens, that was my hustle. And I made hundreds of dollars doing that. All my money went to clothes, shoes, and changing my hair. So I would have probably spent the money on that too. Yeah.

15:32Sean Pyles:Well, hey, you could have opened a business with that seed money.

15:35Elizabeth Ayoola:Right? Exactly. And at that time, I did want to be actually a salon owner. But look at how your life changes. Now here I am on the podcast. Great path still. It's not too late.

15:43Sean Pyles:If you come into a windfall, maybe you win that lottery ticket and you'll open the salon.

15:47Elizabeth Ayoola:My hand cramps say no, but yes, good thought. Thank you.

15:50Sean Pyles:Yeah, that's totally fair. Well, I so appreciate how many more tools there are at teens and parents' disposal nowadays to be responsible and to have these conversations and facilitate strategic savings. So that brings me to the second part of Deb's question, which is about other financial tools that they can maybe use to set their team up for success. So, Kate, you have teams, as we've discussed. What kinds of tools are you using and what's maybe not been as effective that's out there that you think people might come across? So the thing that we're not using that we should be using is a checking account with a debit card, which we tried forever to think about setting up.

16:29And for some reason, Inertia could not do it. So we actually use an app. We use an app called Greenlight, and it's like a little fee every month, and they have a debit card that goes to a Greenlight account that I can put money in, they can put money in, so that I can just send them their allowance. I can tie allowance to chores. It's actually a pretty nice little app. It allows them to sort of see their money in the same way that they would be looking at money in a checking account. So I kind of see it like a checking account.

16:55Sean Pyles:It's functionally the same, right? Functionally the same because no one is spending cash now. I never had cash to give them. People are using plastic. So they got to manage their money, manage their balance, understand what they were doing when they handed a plastic card to someone. It helped make that part of spending real versus not really understanding the concept of owing the money that you're swiping the card for. Did you ever think about going all cash or having a period where they were dabbling with how to use it? Because I feel like there are some, you know, maybe more traditional financial management people who would say, you got to have that tangible money in your hand and really feel the loss of it going to whatever store you're spending the money at.

17:35Sean Pyles:Or did you just totally go all digital, all plastic? We thought a lot about going all cash and it just was so difficult to manage because we never had cash. And every time it got cash, it disappeared so quickly. They actually had a lot of cash because for the early years of babysitting, people paid them all in cash.

17:53Elizabeth Ayoola:Oh. So they did have to spend their babysitting cash. But now they will take their babysitting cash and give it to me. And then I will deposit money into their green light. So they turn it into their green light card because it's burdensome to have that much cash lying around.

18:08Sean Pyles:They can't receive payments to their green light account like Venmo or anything. It's just insular to the family. They do not. But now they do have the Mose, which makes it easier for people to pay them because, again, no one ever has cash.

18:19Elizabeth Ayoola:Well, Kate, can you list maybe some other financial products aside from an account like Greenlight that people could use to kind of stash away the money or invest? Oh, yeah, absolutely. So a high yield savings account, we mentioned that to start. I do think that's still worth mentioning here. For the longer term goals that people are making, the things they're saving for for later, this is a great place to put that money. You're going to earn interest. You can watch it grow. You learn about the power of compounding over time. and there's a little distance between you and that money. It's not as easy to spend it.

18:48So you can't just decide you want to use it to do a fun thing and you pay that balance down. It sits there and it earns interest over time. A Roth IRA is a nice thing to play with if your kid has some earned income. So it doesn't work with gift cash and you would have to let the IRS know your kid has made this money if they're making it babysitting or doing other sort of cash jobs. But$1 ,000 in Roth IRA teaches them to invest. You know, investing doesn't have to be complicated. You can look at target date funds. You can look at index funds. They can sort of see how it goes up and down, how it works.

19:23And over time, that grows and it's there for them later. Like, it's a nice little tool to play with when they're teenagers.

19:30Elizabeth Ayoola:Or you can get them to invest. I always bring this up because I think it's a brilliant idea in companies that they spend money at. If they like to go to Claire's all the time, you could ask them to buy some stocks. They're on McDonald's. My niece loves McDonald's and Chick-fil-A. And anyways, wherever they spend their money, you can get them to invest as well. That's true. That's true.

19:50Sean Pyles:OK, well, Kate, do you have any other words of wisdom for Deb or for their teen, frankly, about how to make the most of all this money? I do think it's worth thinking about that future calculation. You know, as you mentioned, if you took$1 ,000 and you put it in a Roth and it made 5 % over the next 50 years, you would have something like$12 ,000 without doing anything else with it. And if you deposited a little bit each month over time, you would have six figures of money in savings. And that is such a useful exercise because so many people don't save early. And the truth is, the earlier you save, the less you have to save because you've got so much time.

20:28And I think it really is a valuable lesson to learn early. So to the extent you can make that happen, that's a good idea.

20:35Sean Pyles:Time is really your greatest asset when it comes to investing. That's right.

20:39Elizabeth Ayoola:Remember that you can put that money in a trust, which gives you the ability to determine when they receive that money versus receiving it all at once. So some teams may be set up to receive, I don't know,$100 ,000,$20 ,000, whatever it is. And let's be honest, many teams are not ready for that big bulk of money. But putting in a trust gives you more options so that you can spread out the payments. over time.

20:59Sean Pyles:Great. Well, Kate Ashbury, thank you so much for coming on and talking with us again. Yeah, thank you for having me. I always enjoy myself. We'll be back in a moment with more Smart Money. Stay with us. Today's episode is sponsored by Rula.

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23:21Sean Pyles:I recently picked up a pair of European linen sheets for my bed because I'm such a warm sleeper and I don't want to be sweating through my sheets all summer long. And let me tell you, I am sleeping so nice and cozy and cool. And I just love these sheets.

23:32Elizabeth Ayoola:And I'm super excited because the pool is back open. And I recently rocked my blue one-piece bathing suit. And it is a hit, I must say.

23:42Sean Pyles:Elevate your summer wardrobe. Go to quince.com slash smart money for free shipping on your order and 365 day returns. Now available in Canada too. That's q-u-i-n-c-e dot com slash smart money for free shipping and 365 day returns. Quince.com slash smart money. So Elizabeth, I've been trying to think about something to discuss with my finances because we hear from our listeners all the time, listeners, viewers, all of the people that are consuming this podcast about how they appreciate what we share about our finances. And I've got to be totally honest with you. My finances have been super boring recently.

24:19Sean Pyles:Do you ever feel that where you're like, there's nothing kind of exciting or new going on and you almost want there to be just to add some variety. But there's part of me that's also really grateful that I don't have some tumultuous thing going on with my finances, like knocking on what does I say this? Do you ever experience that? I do.

24:37Elizabeth Ayoola:Yeah. When I'm not spending$400 on Azul tequila shots, I do feel that way. You know, so I had that chaos, you know, a little while back now. But now I'm back also in a very boring place in my finances where it's just, yeah, checks and balances, making sure I'm not overspending and everything is automated. So I will admit, yes, it can be boring. And but I think, Sean, during these periods, that's when you can just enjoy spending your money in a balanced way. No. Yeah.

25:06Sean Pyles:I have to remember that there's always a season to everything. Sometimes there's a season where you spend$400 on Azul tequila shots at a Mexican restaurant unexpectedly. Sometimes there are months where you're actually just kind of doing normal things, hanging out with your friends, saving money like you want to, and dealing with pets that are moving around behind me in the video frame for those watching this. For those who aren't watching on YouTube, my pets are regular guests on this show, so you should really check us out.

25:36Elizabeth Ayoola:Exactly. My dog is licking my knee as I say this.

25:39Sean Pyles:you can see pets at least see the pets yeah honestly i feel a little left out because i

25:43Elizabeth Ayoola:feel like your pets come in the frame some of the nerds pets come in the frame so i feel like i'm gonna move my fish up stairs okay so that they can be i was gonna ask if you were gonna finally

25:52Sean Pyles:get a dog because didn't your son want to get a dog for a little while he does want a dog but

25:56Elizabeth Ayoola:we're going back and forth about this i ain't getting no dog okay because listen dogs i know people will argue with me on this but to me dogs are similar to having children in terms of the responsibility. And you know, I travel often. Sometimes I'm not home because I spend the weekends at my man's house and I'm not getting dog sitters. I'm not paying all those extra expenses. I could use that money on myself. Okay. My kid already takes enough of my money.

26:18Sean Pyles:So that's one way to spice up your finances though, is add a puppy into the mix. Cause suddenly you'll have to buy some, you'll have to do dog training lessons, dog food, dog toys, maybe some carpet cleaner. I mean, all of these things that come with getting a pet.

26:30Elizabeth Ayoola:You're trying to fancy up a basically another way to spend more money. No, thank you. Not on that. but I'll live through you guys.

26:37Sean Pyles:But think about all the joy and love and fun you would have if you had a dog in the house.

26:41Elizabeth Ayoola:I'm thinking about margaritas, more vacations, more thrifting, not a dog, but thank you. No, thanks. But yeah, I think that's a good topic though, about your finance getting boring, but I feel like that's a hallmark or a goal that everybody should work towards, right? You start off with your finances, especially if you, you know, weren't giving all those financial tools as a young person and everything is in chaos and you spend so many years or depending on how long It takes you, whether you're paying off debt, trying to put the frameworks in place for healthy finances, doing all that financial education, you do all of that.

27:12Elizabeth Ayoola:And then you should get to a place where the system is working and you don't have to do as much and you can do more hands on finances, personal finances, hands off. Sorry.

27:20Sean Pyles:It's actually a privilege to have boring finances. And I should be really grateful to be at a point in my life where I'm not like as scarcity mindset focused as I was when I was in my early 20s and just didn't have money to cover my basic necessities. Or I was there's. being wildly irresponsible with my money. So I'm going to actually really appreciate that.

27:39Elizabeth Ayoola:But Sean, you have a birthday coming up where you can be irresponsible now.

27:42Sean Pyles:I do. Yes, I'm so excited. I'm turning 35. I know I look wildly younger than that. 25, of course. And yes, and I'm meeting up with my twin sister in Chicago and we are going to have so much fun. My sister is pregnant right now. And so I think this is kind of our last hurrah. I mean, we're not going to be going as crazy as we would maybe if she wasn't pregnant, but we're going to be having a really fun time in our old home city. And I think that is my chance to maybe have a little bit of irresponsible fun with my money and like splurge a little bit, take us out to some nice meals, see old friends, buy extra things at the gift shop, just because this is our time to do it before the baby comes.

28:22Elizabeth Ayoola:That's right. And if you remember what I said in Scottsdale, when we were recording, I do think it's okay to blow up your budget just a little bit, just a little bit every now and again. So that might be your fun.

28:33Sean Pyles:I had forgotten about that, but thank you. So if you can give me some guidance, someone who tends to not blow up my budget because I like to keep things steady and secure, where would you think I could blow up my finances just a little bit on this vacation? Oh, wow.

28:48Elizabeth Ayoola:Well, Sean, you like a good outfit, don't you know?

28:52Sean Pyles:I do. Okay. I really do.

28:54Elizabeth Ayoola:So you might need, just like with wedding looks, I don't know how many you had, but you might need three different birthday looks, no?

29:00Sean Pyles:You're so right. I think I need to go shopping. I think that's what you're telling me. And Chicago actually has great vintage too. So maybe I'll go vintage shopping with my sister. And we'll find some fun outfits for our birthday. When we were kids, our mom never dressed us in matching outfits. We had one that was like a cute little matching sailor outfit that our grandmother gave us. Our mom put us in it, took one photo, and immediately took us out of it. But I think now that we're turning 35, maybe this is our era of having matching outfits, which could be cute.

29:30Elizabeth Ayoola:Sean, I have more ways for you to spend your money based on that. Oh, my God. Please, please, please. We're flowing. Can you tell I'm good at spending money? Okay. So up next, you got your matching outfits. And then like my family did for my mom's birthday recently, you can go and do a JCPenney photo shoot. Yes.

29:47Sean Pyles:Yes. I remember you saying that, Elizabeth. Okay. I'm making a note. I'm going to add this to the itinerary. Because we were thinking for our daytime activities, you know, going to the Art Institute, having a beach day. maybe throw that out a little bike along the money who needs these things we're going to jc

30:04Elizabeth Ayoola:penny when we're in chicago and then just one more tip they're going to try to upsell you on the printouts get the biggest frame and put that in your house and then so i'll be spending more

30:16Sean Pyles:money on the frame and then i'll be spending more money trying to get that frame back to portland with me so great i i'm wildly and irresponsibly blowing up my budget already thank you drops my

30:26Elizabeth Ayoola:I'm done.

30:28Sean Pyles:Okay, but you said your money is also boring now that you're over your whole tequila incident. So what are you going to do to maybe spice up your money? Even if it's not doing something irresponsible, how can you shift things up just to keep it feeling fresh?

30:39Elizabeth Ayoola:Well, I was going to say, help me get back to this point because my ADHD takes me in a circle. So, Ken.

30:45Sean Pyles:Yes, yes. Have you heard about the term dolphins with ADHD conversations? Where it's like you have one topic and you dive down to another and you come back up to the original topic?

30:53Elizabeth Ayoola:This is my life. So you're going to be the guide for my dolphin right now. But I just wanted to quickly say, as we're having this conversation, you know, I love a little reflective, soppy moment. I'm currently at a time in my life where it's very peaceful. And I think back to all the times where, you know, I was maybe struggling with not maybe struggling with a bit of depression, you know, having a hard time, just very sad. And I'm finally at a place where I feel content. I'm not happy every day because that's, you know. But my point is I feel content. I feel peaceful and there's nothing chaotic happening in my life.

31:28Elizabeth Ayoola:And every time those moments come to me and I reflect, first of all, I'm thankful that I get to have this peaceful season of my life. And second of all, I remember that the seasons of life say that chaos is coming and that is not a curse. It's just how it goes. Right. So the same with our finances. Right. You're going to have some peaceful seasons. You're going to have some more chaotic ones. So the chaotic ones are on their way. All right. Unpinning Sean.

31:52Sean Pyles:Okay, so here's what I'm thinking. You are saying that you're really prioritizing and valuing the current state of contentment. And part of that is just your personal situation right now. But a lot of that is also coming from what you've done with your finances. So as a bit of a thought experiment, you could put yourself back into a chaotic period of your life, where maybe things aren't as stable. And you can use the resources and the time and the calm you have right now to get ahead of whatever chaos is coming next. and shore up your finances a little. But there's something a little exhilarating about going down a thought process of, okay, what could go wrong?

32:31Sean Pyles:How would I feel? How can I get ahead of it?

32:33Elizabeth Ayoola:That's right.

32:34Sean Pyles:And so now is the time to do that.

32:35Elizabeth Ayoola:Exactly. And then tying it all back into blowing up your budget. So I do have a Canada trip coming up in August and I was looking at the flight tickets today and I can already tell that's where my budget is gonna be a little bit blown up. But guess what? I'm okay with it. We're going to make great memories. It's going to be a fun trip for me and Iowa.

32:55Sean Pyles:Do you have any credit card points for the air travel?

32:57Elizabeth Ayoola:I do, but I'm being stingy with them. Travel gals, we need you back on, okay? I'm being stingy. Why are you being stingy with them? I'm hoarding them because I keep telling myself there's something in the future that I will spend them on, like a birthday trip, because you know I'm going to travel on my birthday, or my sabbatical next year where I want to do this little world travel to Japan and to Nigeria and to a few places in Europe. So I'm just telling myself maybe there'll be a better use for that.

33:20Sean Pyles:Can I give you some unsolicited advice? Yes. Since it's kind of my job here? Yes. I would say if I were you, I would use those points now because we know there's an immediate sting of how expensive airline tickets are right now. In the future, who knows? Maybe the world will suddenly become a calmer, less chaotic place where fuel and jet prices aren't what they are right now. So airline prices might not be as bad. And also another idea for you, ahead of your sabbatical next year, you could look into a new travel credit card, earn a sign-up bonus, use the sign-up bonus on your travel.

33:53Elizabeth Ayoola:Look at you knowing how to do your job and giving me some good nerdy advice. I love it. I love it. And you're absolutely right. And thank you for saying that because now I'm going to go and book my tickets for the Canada trip in peace using points. And like you said, I doubt that we're going to have this utopian world where gas prices are normal and flight prices next year. But hey, let me just live in the now and save myself the hassle because them ticket prices are high. Yeah.

34:18Sean Pyles:And I mean, I recently got lunch with Megan Coyle, one of the hosts of the Smart Travel podcast. And she was talking about how she has kind of a revolving door of credit cards coming in all the time where she's just working to get their sign-up bonuses. She's churning them is what they call it basically. So you could just take a page out of her book and do the same thing. You know, there are so many travel credit cards out there with many points and sign-up bonuses to be had. So might as well take advantage of them.

34:41Elizabeth Ayoola:That's true. And it's been about two years now since I've gotten a new one. So why not introduce another one? But we'll talk about that later. But the sign up fees is not the sign up fees. The annual fees is what's making me a little, you know, I already have quite a few annual fees. I don't know if I want to add another one on, but we'll see. Yeah.

34:58Sean Pyles:Well, in the meantime, I think that we can both enjoy this moment of calm in our finances. I really hope we're not summoning something horrible down the pipeline by saying all of this right now, knocking on wood. But I'm really proud of all that you and I have done individually in our lives to bring this kind of calm to our lives because not a lot of people have it and we should be really grateful.

35:18Elizabeth Ayoola:Thank you, Sean. And I'm proud too. I'm especially proud I'm not going to stop talking about it, about my sinking funds that I created this year because I'm using that to pay for some of my travel too. Hooray to me.

35:28Sean Pyles:I'm so proud of you for that. Yes. Thank you.

35:30Elizabeth Ayoola:That's all we have. We're leaving. That's it. But we still want you to come and join us next time for another episode. Remember, we are here to answer all your money questions. Maybe you're soppy like me and you've had a beautiful transition with your finances and you don't know what to do next and you want to share it with us. We want to hear it. Whatever your money questions are, please call us or text us on the Nerd Hotline at 901-730-6373.

35:55Sean Pyles:You can also email us at podcast at nerdball.com or drop a comment on Spotify or YouTube. Join us next time to hear about whether all financial advisors, myself included, are evil. Follow Smart Money on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download every new episode.

36:14Elizabeth Ayoola:And our brief disclaimer, we are not your financial or investment advisors. This nerdy information is provided for general, educational and entertainment purposes, and it might not apply to your specific circumstance.

36:27Sean Pyles:This episode was produced by Tess Vigland, Hillary Georgie helped with editing, Eve Krogman edits our audio and video. And a big thank you to NerdVolet's editors for all their help.

36:36Elizabeth Ayoola:And until next time, turn to the nerds.

36:44Thank you.