This special series is as part of CentSai’s commitment to financial literacy at every level. We’re collaborating with financial education advocate Sam X Renick on a series of short interviews, videos, and tips. In this installment, Kristy Wallace, CEO of the Ellevate Network, tells Renick some of her childhood money lessons and shares advice for teaching kids about money.
Sam Renick: What is the most important money habit you learned as a child? Please share the story behind how you learned the habit and what impact it has had on you throughout your life.
Kristy Wallace: I started an investment account — mutual funds — when I was in my teens. Actually, I should clarify that my dad started it. He opened the account (shout out to USAA) and put in a small seed investment. He then encouraged me to add to the account with my summer job paycheck and the financial gifts I received for birthdays and holidays. I kept adding to the account for years — $20 here and $40 there. When I graduated from college and moved to NYC, the money I had saved helped me sign the lease on my first apartment.
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Renick: If you could only teach a child one money habit, what money habit would you teach them and why?
Wallace: I'd teach the concept of long-term gains vs. short-term satisfaction. When my son gets money (for chores, birthdays, etc.), he wants to spend the money right away. We’re typically talking about a few dollars, so he'd be able to get some candy or a small toy. We've encouraged him to save his money, so then he'll have a larger pool to draw from when he really wants something. I'm proud to say that he asked to open a savings account and has been very diligent about keeping track of his money and spending it wisely.
Renick: What was your biggest money mistake as a child or teenager?
Wallace: If I'm being honest, I've always been a bit of a miser. Money is important to me and I try to spend it wisely. I'd say the biggest money mistake was probably restaurants, convenience stores, coffee shops, and fast food. I was always on the go and would buy food and drinks rather than bringing something from home.
Renick: What was one of the smartest money decisions you made as a child or teenager and why?
Wallace: I loved working during the summers. I was an assistant at my dad's dental office during the day and a waitress at night. I worked seven days a week because I enjoyed what I was doing and appreciated the fact that I could still hang out with friends after work or spend time on the beach between shifts.
Working so hard during the summer helped me save enough money that I didn't have to work during the school year.
This became incredibly important, as I was then able to do other activities at school (sports, leadership, etc.). This helped me get into a great college.
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Renick: A variety of surveys indicate that teaching kids about money is a challenge for parents. What would you say are one or two of the primary reasons parents find it difficult to talk about personal finance with their children? And if you have a suggestion on how they can overcome the obstacle, please share that, as well.
Wallace: My partner and I always discuss money with our kids. We talk about the things that cost money (home, bills, vacations, app and movie downloads, toys) and try to translate the concepts into something they understand (e.g. this game will cost $5, the toy you want costs $10, our groceries cost $100).
Renick: Why do you believe there is not more personal finance being taught in schools? And do you think schools should teach it? Why or why not?
Wallace: I don't have a good response to this question because, frankly, I'm surprised there isn't more financial education in schools. Budgeting, saving, and investing money are very important concepts. I applaud organizations such as the Girl Scouts, Rock the Street Wall Street, and I Sow for the ways in which they encourage financial literacy in children.
Renick: Cambridge University research indicates that adult money habits are set by age seven. What if the research is wrong and adult money habits are formed earlier — perhaps around the age that the “give mes” set in? What does this mean for families, schools, and the financial education industry?
Wallace: My family starts talking about money at an early age, but media, toys, and early education programs don't incorporate a lot of content and experiences around financial concepts and literacy. I think it is never too early to start these conversations.
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Have a money conversation with a child and encourage them to save money so they will have a larger pool to draw from when they really want something.
Discover more about Kristy Wallace on the Ellevate Network website or on Twitter @EllevateNtwk.