Balancing Financial Independence and Enjoyment

Dan Sheeks, author of First to a Million, gives us a run-down of what early financial independence could look like for your teen and how they can get started on their journey. It’s not about making enough money to laze around all day—it’s about having more options.

Full show notes

Do you ever wish you learned smart financial planning earlier in life? Maybe if you’d just had some more information, you could have that sports car you’ve always fantasized about...or maybe you would’ve just avoided making some rough mistakes! In order to set our teens on a better path, it might be wise to get them started on a financial education while they’re still under our roofs–so that when they step into adult life, they’ll pay bills and crunch numbers like a boss.

The only problem is….kids don’t want to talk about money. They’d love to talk to you about the things they want to buy. But when it comes to investing, saving or planning, you might as well be talking to a wall. How can we get kids excited to learn more about their personal finances? 

Dan Sheeks is here to answer that question and many more! He’s a high school business teacher and author of the new book, First to a Million: a Teenagers Guide to Early Financial Independence. Dan’s been teaching business to teens for nearly two decades, making him pretty qualified to give financial advice to you and your kids. He knows just how to make finance palatable to teens, and all the juicy secrets for making money while you’re young!

In our interview, we’re talking about what we can say to teens to get them interested in financial planning. Plus, Dan is explaining the difference between real and false assets, outlining different kinds of debt, revealing how teens can get a “next level” job, and much, much more. This episode is bursting with great financial advice for both teens and parents!

Getting Teens To Care About Their Finances

Although kids may seem bored by discussions of dollars and cents, they probably aren’t tired of telling you their dreams. And it’s pretty likely that their dreams include travelling, making art or accomplishing things outside a 9-5 job. Even if teens do aspire to be lawyers or doctors, it might be because they’ve been conditioned to think this way their entire life, says Dan. He encourages parents to sit down with kids and ask them what they’d like to do with their lives, especially if money wasn’t a factor.

When prompted with questions like these, Dan finds that many of his students express frustration with what’s expected of them. They don’t want to be on a preset path for forty or fifty years; they want the freedom to explore, try new things and pursue their passions. Although it may seem impossible for them to have all this and still have a stable income, Dan believes the contrary. With Dan’s advice, teens might just be able to have it all.

Dan’s methods for saving money can help kids follow the path they dream of–making finance seem much more fascinating to them! If you can frame smart money-planning in a way that helps teens realize they can have their cake and eat it too, they’re much more likely to lend an ear when it’s time to chat about equity, savings accounts, index funds and tax breaks. 

But how is this possible? How can we make our money work in our favor? Well, Dan is giving us some expert advice this week to help both you and your teen make smart decisions and unlock the life you deserve.

Assets, Debt, and Jobs (Oh My!)

You may know a thing or two about assets, but did you know there are two different kinds? Dan explains in the episode the difference between false assets and real assets. No, false assets are not a scam...although they may cause you to lose money over time! False assets are assets that depreciate in value, meaning that by the time you sell them, they might not be worth as much as you bought them for. A car is a good example. Dan tells us in the interview about the incredible value of real assets over fake ones.

When it comes to losing money, Dan believes that not all debt is bad. Although debt like student loans and credit card debt are definitely not good, there are also ways a person can accumulate debt that will actually benefit them in the end! Dan recommends that teens look into the possibility of debt if it comes with purchasing a piece of property. Although they may find themselves paying off the purchase over time, they can also rent it out and not only make payments, but turn a profit! In this case, Dan believes it’s wise for teens to consider taking on some debt.

For teens getting a head start thinking about money, jobs are definitely on the table...but Dan thinks teens shouldn’t just go for any old job. In the episode, he explains the concept of a “next level job”, or a job kids can get now to help set them up for success later. This depends on what kids hope to do with their future, but it could be anything from  a secretary in an office to an unpaid internship. As long as it’s getting kids prepared for their future, it’s better than a simple part time employment that doesn’t round out their life, says Dan.

All this talk of assets and debt makes it seem like the only thing there is to do is spend…but what about saving? In our interview, Dan drops some expert tips for teens to save money the right way.

Secrets to Successful Saving

Dan doesn’t believe in budgeting. Well, ok, he’s not against it...but in the interview, he explains that it’s wiser to track expenses then create a fixed limit for doling out funds. When we create spending limits, we too often tend to start thinking of them as spending goals...and then we find ourselves going out to dinner one last time before the end of the month just to fulfill our $100 restaurant budget! Instead, he suggests we look at how much we naturally spend and see where we can cut down.

In order to make the most of saving accounts, Dan recommends teens open up three different ones. That’s right, three accounts! One for emergencies, in case they fall out of a tree or crash their car. Another for future investments like a house can be helpful. And finally, Dan recommends having a third savings account for fun stuff! It’s not wrong to want to vacation in Costa Rica for a week or two, says Dan, and we should be able to save accordingly. He suggests teens create an automatic income transfer system, so that their money goes into those accounts on it’s own.

But what about investing? Should teens be risking their money in the stock market with the possibility of multiplying their cash? Maybe not, says Dan. Although the stock market can be lucrative, Dan suggests most people, including teens, simply stick some money in an index fund and leave it to collect compound interest, instead of throwing money around into different companies. Unless you’ve got the next Warren Buffet under your roof, Dan recommends teens play it safe when it comes to stocks.

In the Episode…

If you’re looking for some seriously sound financial advice for your family, this is the episode for you! On top of the topics discussed above, we talk about:

• Why early financial independence is so valuable
• What “house hacking” is and why you should know about it
• How to talk to kids about the cost of college
• Why we should always pay ourselves before our bills.

If you want to find some more wise words from Dan, check out his website, sheeksfreaks.com or email him directly at