Welcome to Pro Tip$! There are so many excellent humans out there crushing their personal finance goals and teaching others to do the same. Talking to these folks seems like a pretty good idea to us as we offer you as many resources as we can dig up to give you the tools to teach your small humans how to become personal finance aficionados! In our Pro Tip$ blogs we will be interviewing financial literacy gurus from around the globe in order to glean their best advice for meeting #finlit goals while teaching your young ones to be goal-oriented from the get-go.
As you may recall, last week you got the dish from Liz about how she and her family successfully made over their financial mindset and their money habits to make incredible progress in just a couple of months. Today, you get to hear the good word straight from the source of that wisdom – meet Liza Witonis: mom, wealth coach, former teacher, and current debt crusher. We snagged a few minutes of her time to learn about her personal money journey and ask what her key takeaways are for getting money-smart in no time.
Brain Arts Productions: What sparked your interest in personal finance?
Liza Witonis: My personal journey started six years ago. My husband and I were newly married and had just bought our first house. We thought we were living the American dream by both working secure jobs, buying our new beautiful house and enjoying life. What people didn’t see is that we couldn’t talk about money. At. All. Everytime I would bring up a budget, student loans, or big purchases, the silence was crippling. My heart was craving security. Knowing where our money was, having a plan to tackle our $310,000 consumer debt, and the ability to talk to the one I loved about money was all I wanted.
I had no idea where to start. Feeling overwhelmed stopped me in my tracks. One day, we received one of my husband’s student loan bills and just one payment was the same amount as our new mortgage. I was so scared. I knew we couldn’t live this way. I knew something had to change but had no idea We had a deep, heated, very involved conversation. This lead to us wanting to learn and do whatever we could to help us in this area of our life. We invested in a financial program that taught us the strategies to get started.
We had the tangible tools, but I knew there was so much more with our communication, and our relationship with money that needed support. I read books, asked for help, and all of this has led to us paying off over $310,000 in just six years. $250,000 was in 3.5 years and I went from working three jobs, to working from home and building to help others do the same in their lives.
BAP: Do you think that financial literacy for parents can have an impact on their children’s relationship with money?
LW: Parent’s knowledge and experience can impact their children’s relationship with money. You only know what you know. I grew up talking about money, and I know my parents did the best they could to teach me. Two specific things I learned are how to do a yearly budget and only charge what I had in my savings. This is what my parents learned and they only wanted the best for me, so they taught it to me. But in my personal experience I learned that no month is exactly the same, and so yearly budgets are not effective. I have to do a budget monthly. With the credit cards, I only spend what I have set aside in my monthly budget for my credit card. Not my savings. My savings is for emergencies and it has been save specifically for that, not to pay off past purchases. Many of my clients come to me saying money was never talked about while growing up. Parents mean well, often wanting to shield their kids from money concerns, but this doesn’t allow children to learn, ask questions, and know how to use money when they become adults. Money is needed in nearly all things we do, so not speaking about actually causes more harm than good.
With our daughter, I specifically make sure she is around when we’re working through our budget for the month, even though she is only three and a half. Once she gets older we will include her in these meetings. We try to pay for many things with cash. This allows our daughter to see the exchange of money when we purchase things. One really cool experience happened when she was two and a half. She received $20 for her birthday. She LOVED going to the library, so I thought it’d be really cool to bring her to the bookstore and purchase some books. I had her carry the cash in her handup to the register. Then, with Curious George Goes To The Aquarium in one hand and a $20 bill in the other, she suddenly stopped and said, “Mommy, I don’t want to give the $20 away.” I said, “Oh love, I understand. If we want these books though, this is the exchange we make so we can keep them forever.” Then she said,“Mommy, but then I won’t have any money.” I paused, not sure what to say. But before I could respond,she shrugged her shoulders and said, “That’s okay, Mommy – I’ll get more!” Then with a jump in her step, she marched to the register. I thought, “That’s right baby girl, you will get more. Money is always flowing to you.” This whole conversation was maybe two minutes, but I feel this was a big moment in our little girl’s life. We talked about it, and even though I didn’t know the right things to say I was honest with her and helped her navigate through her first money-spending experience.
BAP: As a parent, what are some of the most important behaviors you model for your daughter with regards to personal finance?
LW: Sometimes as parents, we’re so scared to do or say something wrong. It’s important for us to get comfortable with our own relationship with money before we try to include our children. Once we have a healthy relationship, it will be quite a bit easier to talk through what we are doing with our money and why. As young as age three, children are able to understand simple chores, and they want to help. I recommend picking three jobs your child can have and then pay commissions when they complete it. At this age, you can choose to do a nickel, dime or quarter. Your choice. Then I’d recommend having three clear jars each labeled “give,” “save,” and “spend.” Having organic conversations about where they want their money to go allows them to feel empowered in the choice rather than the money just disappearing. If they wanted to save for a toy, put a photo of the toy on the “save” jar and help them see the progress of saving for it. Pick a special place they can give their money to. Sometimes animal shelters are a popular place to donate at a young age. Finally, the spend money is what they can bring when they go to the grocery store with you. These are physical experiences of creating a budget and telling your money where to go rather than it just disappearing.
BAP:What would you say to parents who are feeling overwhelmed with their own finances about starting to educate their young ones?
LW: Take it one step at a time. In my opinion, it is okay to focus on you for a little while before moving into educating your little. If we’re insecure and uncertain as to how to manage or treat our personal money, it will be more of a challenge and maybe confusing when we try to help our young ones. Take a moment to invest in yourself to get some help, so that you’re able to truly step into the discussions and actions that will help your child shine.