Teaching Financial Responsibility to the Next Generation
Explore the topic of How Financial Responsibility is Critical to the Success of Children, featuring Robin Taub an award winning author and accounting professional.
Key issues to be discussed on this podcast:
• Strategies for discussing finance with children
• Developing open and honest lines of communication
• Resources available for parents to develop financial literacy
• Reinforcing strong values in a cashless society
Robin Taub is a Chartered Professional Accountant (CPA, CA), keynote speaker and award-winning author. Her latest book, The Wisest Investment: Teaching Your Kids to Be Responsible, Independent and Money-Smart for Life, gives parents the information, strategies and inspiration they need to teach their kids about money.
Robin has held professional positions in both audit and taxation at two of Canada’s largest accounting firms, and spent five years in the complex world of Derivatives Marketing at Citibank Canada. She is also passionate about improving opportunities for women CPAs to advance into positions of leadership. From 2008 until 2017, she was a member, and then Chair, of the Chartered Professional Accountants of Canada’s Women’s Leadership Council.
Robin graduated with a Bachelor of Commerce degree (with High Distinction) from the Rotman School of Management at the University of Toronto. She earned her Chartered Accountant designation and went on to complete the Canadian Institute of Chartered Accountants’ (CICA) In-Depth Tax Course. Robin values lifelong learning and participated in the Canadian Board Diversity Council’s Director Education Program.
She lives in Toronto where she and her husband have raised two (mostly) money-smart young adults, a son and a daughter. For fun, she loves to snowboard, cycle and go to concerts.
Make sure to check Northland Wealth’s YouTube Channel for more episodes.
SPEAKERS: Arthur Salzer, Robin Taub
Arthur Salzer 0:10
Hi, I'm Arthur Salzer, and I'm hosting Northlands, The Artisan Podcast. I'm here today with Robin taupe, who is a proud Torontonian born and raised. She has her CA and CPA designations and has written one of the greatest books on educating your kids. And it's called a parent's guide to raising money smart kids. Now Robin, you know, you've you've done a lot over the years to come to this point and write this book. Maybe you can talk about your experience. First on, you know why you fell into the accounting field and how that happened?
Robin Taub 0:50
Yes I will. Let me just first mentioned that a parent's guide to raising money smart kids was the first edition and the book has been updated. And it's now called the wisest investment, teaching your kids to be responsible, independent and Money Smart for Life. So yes, it was originally called A Parent's Guide to raising money smart kids,
Arthur Salzer 1:08
and you've added it and then expanded onto it.
Robin Taub 1:11
I have and I've updated it for the digital world that we live in now. And because it was originally published 13 years ago, so a lot has changed as we've moved away from cash. So just wanted to set that straight. But to answer your question, I kind of fell into accounting. When I was in high school, I really didn't have a clear idea of what I wanted to study. My father was a lawyer, my mother was a teacher by training. And unusually, I'm good at math. I'm good with numbers. And I'm also good with languages and words. So that's an unusual combination. And as I applied to university and I went to the University of Toronto, initially, I was studying a whole bunch of different things, but somehow a stroke of luck right before the deadline for course submissions. I changed my courses to the prerequisite for the commerce and finance program. So I had to take accounting, which I had never taken economics and statistics which I had taken. And then I took English and French because I liked languages. So once I was in university, I realized, Oh, this is really interesting.
I really like business and finance, and economics, I'd always enjoy it. And my school there were a lot of people. There were a lot of the professors were chartered accountants. That was what it was called, at the time CIA's now, were chartered professional accountants. And as I got deeper into the program, by the end of my fourth year, I decided I was going to pursue the designation because I just liked the idea of having a professional designation on top of a business degree. I didn't think I was going to stay in accounting, necessarily, but it's a fantastic grounding and foundation for the business world.
Arthur Salzer 2:56
And after there, you transitioned into real estate. Was it because you understood how the financing works from from the accounting side? Or yeah, was there something else to it? Well, I
Robin Taub 3:07
worked at two different accounting firms. I worked at KPMG. And then I went to Ernst and Young EY, and I was in tax. And one of my clients at EY was was, was an organization that was putting together limited partnership, real estate deals. So they were the general partner, and they were raising money through limited partnership structure and buying real estate. At the time they were buying, they had done some properties in Canada, but when I joined, they were buying shopping centers in the US that came out of the savings and loans crisis. So it was a two tiered limited limited partnership structure. And because I had the tax background, I had worked on their file in the accounting firm, like issuing the tax receipts to the investors, I joined them. And it was they were almost a startup. So it was quite an underfunded organization. And I learned a lot but I only stayed there for two years. It was they were really I call them the Horrible Bosses, you know that movie?
Arthur Salzer 4:12
Oh, I can imagine. And then, I mean, I was reading your bio. And then you've jumped to derivatives like yeah, which is crazy. I know. So for for people that that aren't in that market place, maybe what are what are derivatives and what drew you into sales in that area?
Robin Taub 4:30
Right. So derivatives examples, most well known examples would be options, or futures. So it's a security that derives its its value from the underlying security. So a stock option would be an example. Commodities future will be another interest rate. Swaps is another example. So it was just one of those serendipitous things like I wanted to get out of that real estate syndication company and somebody I knew from High School happened, I happen to run into him and he said, We're he'd been at Citibank for probably seven years. At that point, he was like we're hiring. But my boss, he's gonna want to see your marks from University. And I was like what I've been out of university already for, like, at least five years, I have my seat, you know, I pass my CPA exams, and like he wants to see my marks. Yes, that was one of the screens. So I had to submit my transcripts, I had a bunch of interviews, and I ended up joining the marketing team. So we were almost in between the client and the traders. And the type of clients I had, where financial institutions were, which was the same kind of clients I'd had when I was in audit. So banks, brokerages, insurance companies that were looking to hedge their balance sheets, or to hedge a particular product that they had maybe a guaranteed investment certificate that was linked to the performance of a stock index or something like that. So that's what I did there. It was, it was really interesting. And I worked with literal rocket scientists, like guys that had their PhDs, really smart people worked on an open trading floor, like you see in the movies, it was really cool.
Arthur Salzer 6:13
That that would be but I mean, it doesn't add a lot of benefit, or at least, you know, families don't see a lot of benefit, you know, from derivatives markets. Again, you said it was something that that's institutional, our clients were Yes, yeah, to go down the path of trying to help families and help kids and, and communicate better with them and to have them learn, really, the fundamentals of finance. How did you pivot into that? It seems, you know, finally, you're applying some of your skills in the in the right way?
Robin Taub 6:49
Well, it wasn't something that I actually planned. So what happened was, I was at Citi Bank I had, I was in my late 20s, early 30s, actually, and I had two young children. And my father passed away unexpectedly. And he left behind a fairly complicated estate, there was just a lot to do File, Canadian tax returns, file US tax returns, there was litigation, there was just a ton to do. And because of my background, and I have a brother as well, we were very involved with winding the estate up. And it took quite a long time. And I ended up taking, initially just a leave of absence from Citibank to try and get the tax returns done both in Canada and the US before the deadlines. And then when that was finished, I just there was still so much to do, and I had young kids, and it was just too much. So I ended up leaving, regrettably, because I really did enjoy the job. But that's when I first started realizing how my background was really valuable in terms of personal finance, as well. And around 2008, after the global financial crisis 2009 Really, there was a taskforce in Canada, you may know this on financial literacy. So there was suddenly a lot more awareness around the fact that the government felt that financial literacy was critical to Canadian economic growth and prosperity. So that's when it kind of hit me that I could bring my experience, my expertise, my education, and my again, my skills with both numbers and words to try and help people make better financial decisions. And the way the book came about was that CPA Canada, the governing body of accountants in Canada had done research that show that parents in particular were struggling with teaching their kids about money. So they asked me to write the book that sort of started
Arthur Salzer 8:55
and parents probably still are today, though, yeah, I know, governments, you know, left to, to say things and that they're going to do things. But we're probably just as challenged today, as we were then if, if not even more so.
Robin Taub 9:09
True. And I think, again, I'd have a crisis, sometimes. There's this awareness and I think with the pandemic, it was a wake up call, that you have to be prepared financially, because you don't know what's gonna, what's gonna happen, like who saw that coming. So I agree that parents today are probably just as or overwhelmed by this as they were when I first got into this 13 years ago.
Arthur Salzer 9:39
So I mean, that's really something that that's quite important to us in Northland and into our families, and in a lot of people, it's fun to talk about the financial wealth, you know, what's going on in the stock market, or is there interesting, you know, limited partnerships to invest in or private companies. But really the time when it's spent on the human capital, the education side, even more so than than creating special tax structures or trusts and estates, that that human capital development is so critically important. And, you know, I guess the question to you is, you know, what ages should parents be, you know, bringing that money discussion, and educating their kids around wealth, whether they have it or not, and really how of finance plays such a large part in their lives,
Robin Taub 10:38
whether they have it or not, is an interesting point. And I still think you start early. So in my book, I suggest starting around the age of five, when your kids start going to preschool is often when they start asking about money, or they, they see what other kids have and do. And as soon as your kid expresses any kind of curiosity or interest really isn't a time, but I usually find that it does start at around five years old. And the reason I suggest parents start early, is you want to lay a foundation, and then build on it. And you want to make sure the information that you're sharing is age appropriate. So with young children, you're going to make sure that the lessons are things that they can relate to. And if you start when they're young, then you can make mistakes when the stakes are low. And you know, they're going to start to build knowledge, skills and confidence, which is the definition of financial literacy, for when they get older, and the stakes become higher, especially if they're going to become stewards of wealth.
Arthur Salzer 11:44
Do you do you have any tips or suggestions on on that five year old stage?
Robin Taub 11:49
Absolutely. So no matter what stage your kids are, so the way I think of that, I broke it up into four distinct age groups. So young kids, five to eight, preteens nine to 12, teenagers 13, to 17, and emerging adults 18 And over. So no matter what stage your kids are at, there are what I call five pillars of money. And those five pillars are earn, save, spend, share, and invest. So those five pillars never changed. But the specific topics and examples for each of the five do as your kids get older. So with a young child, like people think, Well, young kids aren't earning money, but they do get money, whether it's a small allowance, or money for birthdays, and holidays, and from the tooth fairy. So as soon as you have any money coming in, you're gonna have to make choices. And the choices are, do I save it? Or how much to save, spend, share and invest?
Arthur Salzer 12:51
And I guess, I just that brings the question about money itself, from a savings perspective. You know, for the last, you know, 10 years up until recently, you know, savings accounts didn't really pay a lot of interest. It was basically zero and yeah, today's rates, they really still still haven't moved up at all, either. So how do you how do you deal with that conundrum of, you know, putting money aside, but then not earning interest on it? How does a parent? I mean, do parents understand that? And then how do parents educate their kids around that to put money away, then?
Robin Taub 13:31
Yeah, no, that's a good question. Because you try to explain to your kids that when you save money, you can earn interest on that. And, again, you know, you can get into compound interest. But let's just say, when you're starting out, just introducing the concept of, let's say, a bank account, going from a piggy bank to a bank account. So most banks offer a youth account, and they traditionally don't pay much interest at all, because they also don't have any fees attached. But I think you can still explain that this is a special account for young savers to introduce them to, you know, the benefits of using a bank account, which are your safety and security, and they're gonna get a debit card that they can use to buy things in stores or to withdraw cash or to shop online. You can explain that, once they graduate from a youth account to a student account or regular account, there is that opportunity to earn interest. And once they're older, again, age appropriate information. You can explain what compound interest is that you're earning interest on your interest as well as your original principal. They may also, at a certain point, maybe when they're preteens take the money that's in their bank account and invest it in a GIC for a year and you can explain again how locking it in means that you're going to earn a little bit more money and now as you say, with rates at the highest levels, so they've been in a while, you know, you can get a pretty decent return on a GIC. So maybe it's really good to Have a moment, you can also just explain how banks work. Because kids don't know I mean, this is new to them, that they take money from you. And they pay you for the use of that money. And then they in turn, turn around and lend it out to someone else who needs it. So just there's so many teachable moments. And that's one of my favorite strategies to help parents teach their kids is just to find these conversations in their everyday lives.
Arthur Salzer 15:26
So for for parents that that aren't literate, that they know themselves, that they're they're not comfortable, maybe, or they haven't been taught, or they, you know, they didn't go to school for accounting or finance. Is your book really sort of a way maybe that they can help themselves and then also help their children?
Robin Taub 15:49
Yes, you got it. So that is one of the problems that a lot of parents think like, How can I teach my kids about money, if I'm not good at this myself, if I don't know myself? How to how to do things properly. So I try to encourage parents that yes, you and your kids can learn together, it's such an opportunity for you to level up your money skills. And in fact, the first chapter of the book is really, to help parents get their own financial houses in order so that they can be good financial role models and learn alongside with their kids. And to this end, I created these 11, healthy habits of financial management, things like knowing where you stand financially. So your net worth and your cash flow, the importance of paying yourself first of knowing the difference between good debt, good debt and bad debt. Those are just three examples. But there are 11 in the in the book,
Arthur Salzer 16:45
and they're probably usable, really, for anybody have any, you know, economic economic needs.
Robin Taub 16:52
Yes. So they are general principles. Now, obviously, when we're talking about high net worth families, or ultra high net worth families, the context is different. Or families who are struggling, it's it's different. But the principles, the foundational principles of personal finance are pretty universal.
Arthur Salzer 17:11
Yeah, I would, I would, I would actually, you know, very much agree with that. Because I think one of the challenges, when you do have a large net worth or a lot of cash flow, most people don't find finance fun, in any way, shape, or form. They might like to speculate on the market, because it's a thrill. But the actual, you know, work of putting together a balance sheet, you know, looking at cash flows, like you mentioned, they really don't want to do that. They don't want to spend the time doing it, they'd rather go to the golf course, or do something else. So they, you know, they pay accountants they pay, you know, financial advisors and family offices, and if, if they're not careful, they end up paying the lawyers through litigation. Because that's, that's what happens when you don't do you know, some of the work ahead of time. But what do you find, you know, do you find that's the case where, you know, a family growing up with a wealth there, they're just the expected or they, they think that trust money is going to come in every month. And they really don't have to, you know, pursue their, their, their dreams and passions as much as they should?
Robin Taub 18:26
Yeah, it really depends on how the kids are raised. And I guess the access they've had to the money. I mean, I've worked with family where there was only access to the money in terms of their education. This was a very, very wealthy family, but the kids did really not have access on a day to day basis to spend that money freely. They they knew that there were trust, they knew that there was wealth, but the only benefit that came to them was that they could pursue higher education and multiple degrees. So, you know, every family is unique. But I think a common concern amongst the wealth creators about the next generation is how do we raise kids who are grounded when we have all this money? How do we raise kids with a sense of purpose, not a sense of entitlement, and I think that's what you're getting at.
Arthur Salzer 19:24
It's, it's an absolute issue, or maybe even a sense of guilt. Some I've seen some families that the next generation feel guilty, give their money away as fast as possible. So that they somehow are equal with with everybody else, which which causes all sorts of, you know, challenges, but maybe, you know, if you know, the family earlier on, you know, started with the steps that you outlined in your book. That really can be the right approach. So, I mean, what are, you know, what are some of the initial discussions? You know, it's always better to start early. But what happens for families that are starting today that have? Maybe they're teenagers? Maybe they're in their early 20s? How do you do this, this introduction to, to finance in money and how to get them to do the work?
Robin Taub 20:25
Well, first of all, you got to jump in at the stage that your child is at now, sharing information that's age appropriate. So if your child is a teenager, and you've never had any money conversations, you're obviously not going to start with topics and examples and discussions as if they were seven years old, even though they don't know a lot, they've probably learned through the school of hard knocks, and from osmosis, and from their friends, some stuff. So you have to jump in, at the teenage stage. And again, the things that are are important at that stage, for example, are they working? Do you expect them to work? Or they work in the family business? If you have one? Or are they expected to get some kind of a job working for somebody else? In terms of spending? Do you give them guidelines or a budget, so that they don't feel like money is no objects? When it comes to saving? are they setting goals? Are their goals meaningful to them? Are they tied to their values? So there's going to be specific things, you know, again, we could get into investing and sharing as well at that stage. But again, the book is really structured so that there's specific topics and examples at each and every stage that are really relatable for any family, like just even an open ended conversation, like, you know, what does having a lot of money mean? What is the meaning behind being rich? Is it just a financial measure? Or are there some other things involved in terms of giving back and legacy? So there's so many interesting conversations, and again, take the cues from your own kid, and, you know, you know, how they learn best and when is a good time to talk about certain things? And, you know, everyone knows their own child best. So you also have to keep that in mind.
Arthur Salzer 22:21
And and what's the trick to you know, people today are a lot fitter. I mean, they're, they're happy to go to the gym as they see results. How do you how do you coach or get people interested in their money so that they're, they're constantly working on it? And in improving, improving it? It doesn't seem like it's as much fun. It's fun to spend, you know, yeah, shiny car or the nice house, but it's not always fun to save. How do you how do you deal with that those attitudes,
Robin Taub 22:56
again, I think it goes back to your savings piece goes back to your values. So your personal values, meaning the things in life that are most important to you, that you're willing to take a stand for, and a lot of wealthy families have strong family values that they want the next generation to embrace. Once you are clear on your values, then it's easier to set goals, savings goals, investment goals, life goals, that are meaningful, and compelling. And I actually created an exercise, it's in the book, but you can also find it for free on my website, Robin tugg.com. And it's called the values validator. And it's 20 statements that are designed to help you determine what your top five values are. You just write them.
Arthur Salzer 23:47
So instead of so instead of taking I mean, I guess people don't even play desktop games anymore. We used to work family. But instead of instead of video game time, you take this out, you say alright, you know, before we play video games, let's let's talk about, you know, what you think is important. And you would ask each family member? Is that sort of the approach?
Robin Taub 24:10
Well, I think everyone has, everyone wants to do it individually, because values are very personal. And it's also very revealing when partners or spouses do the exercise to see where the values overlap and where they differ. And then again, with your children, you want them to do it separately, too. But absolutely, then gather and compare and talk about what my top value is this my least important value is that and see where there's overlap and have a discussion about why why those things are most important to you because I'm sure you've had this experience when when you're not living in alignment with your values when you're not spending and along in alignment with your values. There's a sense of dissonance or discomfort like it just doesn't feel good. But when you on the other hand when you do stand in line with your values, are you Live in line with your values that everything has purpose and meaning including money. So I think it's a great idea, you can make it part of a family board game night too and play a game that teaches about money, because that is one of one of my little tips like you could play the game of life or monopoly. Those are still great ways to teach younger kids about money. So you could do a whole combination of things as a family. No,
Arthur Salzer 25:26
that's, that's, that's very cool. So I mean, from the first edition of your book till till today, I mean, a lot of things have happened over the past decade. What, what things do you think, you know, have significantly changed the the way people view or the way families view finance today? Is there? Is there a difference? Is it
Robin Taub 25:49
yes, I'd say it's the fact that we've really moved into a digital almost cashless society. And before a popular way to as sorry, and that was accelerated by the pandemic, I want to add. But before, a popular way to teach kids about money was with jars. I'm sure you've, you've seen that. You've heard that. In fact, it kind of came back into fashion with this envelope stuffing thing on Tik Tok. But, you know, jars are really tangible and concrete. And it was just a way to say like, Okay, here's your, your, you're saving jar, you're spending jar, you're giving jar, your investing jar. And you could see literally, like, right through it, how much money was in each of those things? Well, you know, we're living in a world where no one's really using cash anymore. Like I hardly ever use it, I always have someone me for emergencies, but it's not very often that I need to use it. Some businesses will only use, you know, digital forms of take digital forms of payment. And our kids are growing up in that environment. And it just makes it in some ways, more challenging, because spending is so frictionless and it is more fun, as you said earlier. So how do you stop and go, right? Yeah, exactly. Just tap your phone, your your plastic, whatever it is, is there, it's just, or you're in social media app, and you see an ad and you can just purchase it, like right within the app without even having to go out. So it's really tough. We live in a world that stresses instant gratification and consumption. And it's easy to spend. It's frictionless, whereas it's harder to save. It's just there's more friction around it. They, you know, we live in a commercial world. So that has become a challenge for parents and for kids. But on the other hand, all this tech, like FinTech, financial technology, has given us a lot of great tools to. So now that we spend mostly digitally, there are great tools built into our mobile banking apps that can help us creating set budgets and notify us about spending levels or bank account levels. So there's definitely ways to harness the digital world in our favor, to stay on top of our finances.
Arthur Salzer 28:14
It's like having a an assistant from the time that you're 15 and on
Robin Taub 28:19
in your pocket. And kids are so good with tech and with their phones, they're really not it's really natural to them to use those kinds of tools.
Arthur Salzer 28:26
So are there solutions today for for digital budgeting, where you would set up? I don't know withdrawal or transfer on a regular basis to go somewhere that you can't spend it or to go into some type of Yes, up investment solution? Yes,
Robin Taub 28:42
certainly. So you can set up automatic transfers most of the big banks in Canada, I'm sure in the US as well, you can do it probably online, you don't even have to go anywhere or speak to anyone, you just set up an automatic transfer most people do at the day they get paid or the day following payday. And it just puts the money into a separate savings or can go right into an investment account. And that's what we call paying yourself first. Because you're as soon as you get paid, you're taking some off the top and putting into a separate savings or an investment account, work and grow. And then you learn to live on what's left. So you don't wait until the end of the month to save. Because sometimes you get to the end of the month or at the end of the money in this this case, you're prioritizing saving you're paying yourself first, which is
Arthur Salzer 29:31
really the right way to do it. I mean, that's it's it's common sense. But it's so it's so difficult for some people to do but I think the automatic feature makes it makes it much much easier.
Robin Taub 29:41
It takes the self discipline out of the process. Exactly. Absolutely.
Arthur Salzer 29:45
With you know, with Canadian families today, you know, do they need to learn about the different legal structures for for investing or for savings like should they know the difference between a Registered Education Shouldn't savings plan and a Registered Retirement Savings Plan or a Tax Free Savings Account? Where, where should they be learning those things, if you
Robin Taub 30:08
don't like paying tax any more tax than is absolutely necessary, then yes, you have to learn how to take advantage of those types of registered accounts. So obviously, your bank is going to have or your broker is going to have information on these types of accounts. I do talk about them in my book, just in terms of when to introduce them to your children. But there's a great in the Ontario Securities Commission created a website called get smarter about money. And it's a financial literacy website full of terms and definitions and examples. And I used to contribute to it. And that's a really good place to learn because the information is unbiased and objective, they're not selling you anything, it's just the whole purpose is to is consumer education. So yes, understanding, you know, our ESP Registered Education Savings Plan is to help save for kids post secondary, our RSP is for retirement TFSA Tax Free Savings Account, now we have the new first home savings account FH S A, there's an alphabet soup of acronyms and acronyms out there. And again, there's advantages to using them, they all have different features and benefits in terms of is is a contribution tax deductible or withdrawals tax free. So I suggest that you take a look at get smarter about money, because it will have comparison charts, so you can educate yourself about the differences. And the uses when you know when you use these types of accounts
Arthur Salzer 31:44
for for for you know, kids that are that are keen, you know about finance or families that are, you know, is sharing the details, or how a Registered Education Savings Plan is invested with, you know, with the kids is that where you could get into a discussion about, you know, different types of asset classes or, you know, investing areas, and then how they, how they commingle or work together to, you know, to provide, you know, diversification and potentially better risk adjusted returns.
Robin Taub 32:20
Absolutely, that's a good example of a teachable moment. And I did that with my kids, because I did set up RRSPs for them when they were, you know, when they were in school before they were ready to go to university. And we did talk about what the funds were invested in, and whether they were growth assets, or as they got closer to going to university, you know, I didn't want it in that I didn't want to invest in riskier assets, like stocks, because I knew I needed the money fairly soon. So I was selling things and leaving into more liquid assets. And then, you know, they were involved every year when when we had to withdraw from the RSP, because they had to get a certificate from the school indicating that they were enrolled in a full time post secondary qualifying post secondary program. So they were they knew what was involved. You know, I think I tried to explain that some of the money we were taking out was the money we'd put in some of the money was the growth, the income that we had earned on it, as well, as you know, with RSPs, the government, when you contribute, the government matches your contributions up to a certain amount. So we talked about that as well, because again, the way when you withdraw the way it's tax, some of it is taxed in the hands of the student, like everything, but the original capital is taxed in the hands of the students. So that would show up, they would get a T for a with the withdrawals. So when they had to file the return, so it's such a good opportunity to talk to them about investing, about education, about saving about future earning. Great,
Arthur Salzer 34:00
it really seems the place to start and, you know, setting an example. And and doing, you know, the path together the journey together. Yeah, is is is incredibly important. And I think, you know, you're talking about values, but by spending that time together, and communicating the values of of saving, of budgeting of of trying to, you know, minimize, you know, tax leakage, you know, gets passed on to, to your kids very, you know, very easily and I'm sure, you know, once that they're in their 20s They'll be off on a much stronger foot then than they would have if you hadn't spend that time with them.
Robin Taub 34:47
Yeah, I mean, my kids used to tell me that when they were at university, they felt like they had a much better understanding of their finances and their just their day to day managing a budget because you know, they said are living at a town off campus, they have to pay rent to a landlord. They've got food, budget, transportation, all that kind of stuff. My kids felt like, some of their peers just were like, clueless, they just didn't know. But because again, I'd always talk to my kids about this. It was I was lucky because of, as I mentioned, my background, and I knew it was important for them to learn and understand. And it was priority for me. So they felt like they were much more prepared. And they did a good job of managing.
Arthur Salzer 35:29
Now, do they do their own tax returns? Or do they hire mom?
Robin Taub 35:33
Well, my daughter is also an accountant by training. And no, my I've made sure that my kids understand how to do their own returns. And it was a bit complicated, because I originally put them all under one account, and then it became very difficult to split it off. But what I usually do is I have them come over, and they sit at my desk, and they do their own returns, and then on there because we use a product like turbo Turbo Tax, and then I'm there to answer questions. And if it gets a little trickier, complicated, but it's actually again, I look forward to it, because they come they bring their slips, and we just go through everything. And it's a good opportunity to to have a discussion and do some financial planning. But yeah, like, I don't want to be doing their returns for the rest of my life. So I taught them how to do their own
Arthur Salzer 36:21
learning, you know, by doing is incredibly important. You must you must run into situations, though, where either people haven't started or they're actually doing the exact opposite of what they should be. You know, maybe you could share, I don't know if you've if you've seen it, but could you share sort of a worst case story? Yeah. And and maybe how you saw it corrected? If you were lucky?
Robin Taub 36:48
Well, a lot of people are, do say to me, like, Well, my kids are already teens, and I haven't started teaching them about money. You know, is it too late or, you know, if it's a wealthy family, their kids spending is totally out of control, because they're using a supplementary card on a family visa, instead of their own using their own card. So in that case, and that's often the case for kids who are under the age of majority, 18 or 19. They have, you know, a card for emergencies, but they never see the bill, they never make the payments, they have no idea how it all works. And it's as we just talked about, it's so frictionless and easy to spend. So I do hear a lot of that where their kids spending is just out of control. And they don't understand how much it adds up to or they don't have a good appreciation of the value of the dollar. So again, it's never too late like that expression that the best time to plant a tree is 20 years ago, but the second best time is now so just start don't let the fact that you haven't started deter you. So just start jumping to the stage your children are at. But if it is one of these cases of like excessive spending, and even when you have or make a lot of money, you can still spend more than you can still live beyond your means. Like it is possible think of all these broke and bankrupt professional athletes, celebrities, you know, your it's not about the Jets, private jets are expensive. Yeah, when you get to that level, yeah, or yachts, we're talking about huge budgets, but you can still get yourself into trouble. So you know, you want to start teaching them again about these five pillars of money, explain how to budget, get them their own credit card, once they've reached the age of majority, set the limit low, make them pay their own bill, as much as they can be spending their own money and not yours. So money they work for, even if it's an allowance, if it's if it's their own money, they're gonna think a lot longer and harder about spending if they're going to feel more accountable for it. If they're just spending your money, it just doesn't, it just doesn't register. So get them to start spending their money, talk to them about needs and wants. That's a really important conversation to have. And, you know, you want to try starting to put things in perspective for them. So, talk about giving back, talk about gratitude. There's so many ways to address these issues of entitlement,
Arthur Salzer 39:24
you hit the nail on the head, one of the things that I noticed between Canadian families and American families is probably the level of giving back to society to creating foundations to ensure a livable work. It seems here under you know more of a socialist bent. There's less either less desire or maybe less money to do that. We always think the government is going to do that, you know, for society whereas, you know, in the US you know, creating foundation and giving back and spending that time to, you know, to share the wealth, you know, with with, with areas that the family believes in, seems to be a much higher proportion of families doing that.
Robin Taub 40:12
That's really interesting. Maybe like you say, because we have a social safety net here, that there's, there's a feeling that there's less need, but I don't I don't even think that's necessarily true. And obviously, if you're supporting the arts, there's never enough money. Even like, you know, our health care system, like it's free. I mean, we pay taxes. So it's, it's free, but it's it's underfunded, right. So a lot of people want to support hospitals, and fundraising for those for those types of institutions. So, I don't know me, I feel like in the US, there's just so much more generational wealth than in Canada. And that might be again, one of the reasons like, you don't see as much big foundations or big philanthropy here. Maybe we just don't have as many billionaires and, you know, generational wealthy families, we're starting to, obviously, but I feel like we're behind us, like, we are in many things.
Arthur Salzer 41:17
Yeah, but we're gaining ground catching out. Yeah, you know, big because of because of education, and books, like you've you've written for some of our families, and maybe this will just sort of wrap it up. When families do have significant wealth, relative to too many Canadians. You know, stewardship is really an issue, do you? I mean, do you have any words of wisdom on on stewardship, and you know, how, you know, how to protect that wealth over over generations,
Robin Taub 41:53
I think education is the key. And making sure it's a priority for your family, if you're working with an advisor or an office, to make sure that they're helping you with that, because often, parents, if they don't feel comfortable, taking the lead on it, they have advisors that they can turn to, so make sure that you're leveraging those resources. But I think like most families would want as a bare minimum, their kids to have some financial literacy education, in order to become stewards of wealth. And now, you know, there are programs that you can do that accredit these beneficiaries. So that the parents, the wealth creators know that they have some basic level of education, they also know how to work with advisors. And it takes away some of that fear and concern, that they're not prepared to manage or handle a windfall that they might blow their trust fund or inheritance. So I think I'm not I'm not saying every kid is going to be a financial expert, but having some basic level of knowledge that they can work with the experts, and quarterback and ultimately be the one that makes the decisions and is accountable, I think is is really important. And and I think most parents, most families would agree.
Arthur Salzer 43:17
No, absolutely. And I just want to thank you today. Robin taupe. I mean, you're the award winning author of the wisest investment, you know, teaching your kids to be responsible, independent and Money Smart for Life. And that's definitely going to go on the reading list the recommended reading thank you here at Northland for a family Hey, and and, you know, we'll we'll talk about getting some copies for for families with, you know, the next generation starting out that we'll, we'll get from you and give out to them. That'd be great. Thank you so much for your time today. It's it's, it's greatly appreciate it.
Robin Taub 43:54
SUMMARY KEYWORDS: Parenting, Finance, Financial Literacy, Recommended Readings,