(upbeat music) - You have children, I now have children. You've spent a lot of time thinking about money at a level and purpose and identity at a level that I haven't yet. And I certainly haven't for my kids, two months, two years old, maybe it's too early. But given what you've thought and for any parents listening, what advice do you have for taking some of these lessons, whether they're purpose-driven, whether they're financial-driven, and teaching them to children as parents?

- Get it together yourself, and then model that behavior and your kids will follow suit. I think we often talk about what exercises we should do with our children, what we specifically should teach them didactically, what we should get them involved in. I'm thoroughly convinced that the way your kids actually learn is watching how you navigate the world.

So it sounds a little funny, but I think that we as adults should concentrate on ourselves, develop these great, meaningful habits, and live them out in front of our children so they can see. And I think that, more than anything else, will give them a good handle on what living a purposeful life, a full life looks like.

- I'll add a caveat to what you said, which is for some of these lessons, just doing them only works if you also expose your children to it. So from a financial standpoint, I might be organized and thoughtful about my personal finances, and maybe at two years old and two months old, it's not the time, but at some point, I can't just live that, I also have to bring the family into it.

So whether that's talking about what you're doing, making sure that you're not just doing it, but you're also sharing that you're doing it, for some of these things matters. Maybe for doing a job you're fulfilled, people will kind of get that through osmosis with you in the house. But I do think that when it comes to finances, some of the things that I want to do in the future, or at least just not make them taboo topics that we don't talk about as a family.

- Yeah, and I think also part of that modeling good behavior to go the next step forward and be a little more explicit, is also giving them the space to then try those techniques and fail safely, right? So in our household, one way we did that is our kids could watch how we dealt with things financially, but then we started giving them a yearly allowance, which we gave to them the first of the year.

We clearly stated what they were responsible for and what we were responsible for. And then they had to decide what to do with that allowance the whole year. They weren't getting any more from us. And so that was a way we'd been modeling for years good behavior, but then we could actually set up a controlled experiment where the truth of the matter was, there was no real risk for them, but they could then experiment, try some of those things, those techniques that we had been modeling, see what worked for them, see that hadn't, make some mistakes, have a little egg on their face when they did something wrong, and then learn.

So I think that's part of that modeling is then to give them some space. - And how did the allowance for the year upfront experiment go? - You know, in some ways it did some unexpected things, but then at least we could address it. So for instance, my daughter, we found became ultra scared of spending and always had way more left at the end of the year than she probably should have.

My son, on the other hand, was confident everything would work and often spent too much in the beginning. And then a catastrophe would hit and he'd find that he didn't have enough money. A perfect example is, you know, he spent most of his money. He had just a little bit left and he had about three or four months left, and then he dropped his phone into a lake when we were paddle boarding.

And so all of a sudden he's like, I have zero money. I can't buy a used phone, I can't do anything, but I didn't foresee this coming 'cause I thought I was doing a good job, but I didn't see that something unexpected might happen. So, you know, it plays out differently with different kids, but the idea then is then they can, you know, to have those gentle conversations.

With my daughter, it might be, hmm, you know, it's great. You had a lot of money left over, your bank account's really growing, but are you enjoying that money, right? And then for my son, it might be like, yeah, money's a powerful tool, but if you're not careful and a good steward of it, you may find you don't have it when you need it.

And so those are different conversations you can have, but it all starts with the modeling, then kind of those simple experiments, and then the talking to him. - So did you loan your son money against his future year of allowance, or how do you handle that one? - The darn problem with my son is he's so goddarn innovative that I think he, here's a perfect example.

My son is known as the electronics guy on the neighborhood, so people give him old or broken electronics. The other day, someone gave him an old or broken phone, and he realized it was still under warranty, sent it back to an Apple, and they sent him a new phone.

- Okay, so he figured it out himself. - So he's a pretty savvy guy. He figures out either how to fix most things or to find his way into something new. The problem with this phone is it ended up at the bottom of the, above the lake. He couldn't get it back.

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