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Come join a groundbreaking new podcast that promises to change the way you think, the way you live, and the way you manage your future. Grab a cup of coffee, a 6mg Zyn, some noise-canceling headphones, and get lost in the world of the Fiscal Firehouse. With your co-host Jon Beattie and Louie Barela, the Fiscal Firehouse is your guide to financial freedom. Tailored to union firefighters, we will discuss problems, solutions, and benefits that are unique to our profession. Change your finances, change your life at the Fiscal Firehouse. Brought to you by Local 1309.
Welcome to the Fiscal Firehouse,
a podcast dedicated to promoting
financial literacy to firefighters.
I'm your co-host, John Beattie, executive
board member of Local 1309, a lieutenant,
and also a certified financial planner.
With me, I have the other co-host of the
fiscal firehouse, Louis Barella, executive
Board member of Local 1309 ambulance
driver, and want to be financial expert.
Together, John and I hope to bring
clarity to the world of personal finance,
specifically relating to firefighters.
Firefighting is a
difficult job making sound.
Financial decisions shouldn't be.
Introduction: Welcome back to the Fiscal
Firehouse where we break down money.
Investing in financial
independence for firefighters.
Today's show is a special one.
We're calling it the Kids episode.
John and Louis dive into why teaching
your kids about money early can be.
One of the most powerful financial
decisions you'll ever make from 5
29 plans and Roth IRAs to custodial
accounts and the new Trump accounts.
We'll walk through practical ways
to start investing for your kids'
future goals if you're building
wealth at the firehouse and at home.
This episode's for you.
Without further ado, let's kick it
over to local 1309 studios and the
recording of the fiscal firehouse
Jon: Welcome back to another
episode of The Physical Firehouse.
I'm your co-host, John Beatty.
We're recording here, live in local
1309 studios, and as always sitting
across me, the person that's really
bringing it every episode, my
partner in this endeavor, Louis Ella.
Hey Louis.
What's going on buddy?
Louie: Hey, jb.
Good to see you, man.
Jon: It be good to see you man.
Good to see you as well, bud.
unfortunately we're gonna kick off
this episode with some somber news.
obviously all those, in the West Metro
community know and have been infected by
a pretty significant tragedy in our go.
Organization, we lost a brother and a
friend, engineer Kyle Bartlett passed
away exactly one week ago today.
and our hearts are just broken.
Honestly.
We're all healing as a
group and as a community.
our thoughts and prayers are with
Kyle's family, his wife and his kids.
And, it's just been, it's
just been devastating.
So we're not gonna elaborate too much
more on that, except, our hearts and
prayers really go out to Kyle's family
and everyone else affected by this.
but we did want to take the opportunity,
obviously, in previous episodes
we've talked about the importance
of, beneficiary updates and making
sure all your information is tidy up.
So if something does happen,
and all these things are.
Are tragic and they're unforeseen.
We just wanna make sure that, as people
are healing and as they're recovering,
all the things that go around with
accounts and all that other information
is already handled, and it's just one
less burden that the family has to endure.
You agree with that, Louie?
Yeah.
Louie: I think it's important, not
just for, firefighters, but for
everyone to have their beneficiaries
updated and to have a will or
a trust if you have children.
and, we've talked about
doing an episode on that.
That's not this episode, but maybe
we'll do an episode in the future.
and look, we're not trying to
avoid the hard conversations.
The truth is, John, you and I
had a lot of conversations about
what we wanted to do with this
episode and what we wanted to say.
and the truth is we just, we're
not in a good space to, to want
to talk about that in detail.
We don't, we're not experts in that field.
So we can only talk about, the
financial side of things or that
benefit, because that's what we know.
That's what we're good at.
And We, we do wanna say you
should update beneficiaries.
Make sure that those things are taken
care of, as well as your wills and
your trust as well, if you have those.
And if you don't, you really need
to get those, you really need to
get those taken care of as well.
And then on top of that,
it's also important that we
just take care of each other.
Like it's hard and it is, this job
can be very difficult at times.
And we are in a unique position where
we live with the people that we work
with for a roughly a third of our life.
So it is, incumbent upon us
to take care of each other.
In the best ways we can and to
notice if something is off or
something is weird about our crews.
and I say that without
saying anything negative to
Jon: yeah.
No judgment.
No judgment.
Which is
Louie: is great, and Kyle knew all
the things, like he was really good
about, knowing his own mental health.
problems and probably being
able to hide those as well.
But for other people out there, for other
crews out there, be diligent about the
people that you work with about paying
attention to how they're acting, how
they're, what they're going through.
And, I know that's easier said than done.
It's a hard thing to do, but
we just encourage you guys
to take care of each other.
Reach out to the brotherhood, the
sisterhood for help when you need it,
because we are here for you and we do
want to help you in any way we can.
your union reps, whatever department
you're at that you're listening to, I
can just almost guarantee you, especially
if it's a Colorado professional
firefighter union, they will go outta
their way to make sure that they help
you and get the resources that you need.
If you say that someone on your
crew is struggling, they'll be
there for you in an instant.
So take care of each other.
Take care of yourselves.
Jon: Yeah, absolutely.
that's well said, Louie.
And, I'm just proud of everyone really,
coming together in this time of need and,
just the outpouring of support, not only
on a financial basis for Kyle's family,
but just really surrounding them and
shrouding them in love and support and,
yeah, it's just a, it's, we've, there
are no words and we've tried to have
these conversations and unfortunately
this is not the first, tragedy, that
West Metro has had, had to an endure.
I really hope it is our last.
but nonetheless, we love
you Kyle, Kyle's family.
We love you guys and
everyone's surrounded.
we're there for you.
That's really what we wanna talk about.
and really moving forward,
really what this episode is.
And, this was actually on a
suggestion from one of our listeners.
it seems like at West Metro, and I'm
sure, throughout a lot of the other
departments, man, there's been a lot of
babies being had, we're in that turnover
phase of the organization, honestly,
where we have a lot of people retiring.
Obviously we have a lot of newer
folks coming in and where they
are in their lifecycle, a lot
of 'em are getting married.
Some of them are not getting married,
but a lot of people are having kids.
Yeah.
so there's a lot to, a lot to unpack
when you're talking about kids
and finances and all the things
that go in with raising kids.
So Louis and I thought this would be a
good opportunity to talk about some of
the challenges that Louis and I are both.
Parents of boys and they're crazy.
but we wanted to talk about just some
of the things that we consider when
we were talking about our kids and
money and teaching them about money.
And then also what are some of the
accounts, that you can use to help,
establish some financial security for
your family and your kids moving forward.
So that's really what the episode,
moving forward is going to talk about.
I think when we're talking about kids,
before we talk about the accounts,
I think it's important to teach
them about money, how to use money
responsibly, what is money, and all
the things that go around with it.
You agree, Louie?
Louie: Totally.
I think it's weird.
I get a lot of questions about money
and kids, but all the conversations or
all the questions that I get are all
about how do I save money for my kids?
Or what account should I open for my kids?
Or how do I set money aside and
I rarely get asked The really
important question, which is, how
do I teach my kids about money?
How do I model for them good behaviors
when it comes to finances or to investing?
And that's the real question.
I think your heart's in the right
place as a parent, if you wanna
save money for your children.
And I'm not saying you shouldn't.
There are ways to do that we'll
talk about, like John said, but
before you do any of that, it,
that all counts for nothing.
If you don't do a good job at
teaching your kids how to be
responsible with money, the
value of money, how to use money.
So that's why we wanted to take this first
time to talk about like the education
side of it, the teaching kids about money.
I think we have failed in our
society, in our school systems
by not teaching kids about money.
the one thing, regardless of what your
child is gonna do in life, whether they're
gonna go be a his history major or they're
gonna go to college, or they're gonna
become a firefighter, whatever it is.
The one thing that is common to
every child is that they will 100%
have to deal with personal finance.
They will have to manage their own money.
They will have to save, they will have
to navigate the pitfalls of debt and
of buying a house and all those things.
And they're not gonna learn any of
that from the public school system
or from the private school system.
there's no personal finance component
Jon: They're gonna learn it from TikTok
is where they're gonna learn it from.
Louie: Yeah, exactly.
They're gonna learn it from their
friends and from TikTok and from other
terrible ways, or Wall Street bets.
and so it is really incumbent upon
you as a parent to teach them about
money, to teach them good money habits.
So that's what we wanna focus
on first with this episode.
Jon: Yeah, that's, a really
good point there, Louie.
And this is something that, I'll be
honest, I did not really even think
about even before becoming a parent
or even my upbringing in my childhood.
But, as I was doing my coursework,
a lot of time was spent around
like the psychology of finances
and money and how do you really
develop, your feelings around money
and how you think about money.
that's not something that I really
unpacked until I went through some
of these, some of these courses.
Then did it internally.
And dude, it's man, it's like
going through therapy when you
start to think about like, why
do I feel this way about money?
Why do I feel like
certain ways around debt?
Like some people, it's
a much more visceral
Louie: Oh yeah.
Jon: response and other people
are like, what's the big deal man?
I use it all the time
and it's not a big deal.
But other people are like, man, I
will never take out a loan ever.
I will live under a, bridge so
I don't have to take out a loan.
And it's like, why does
someone get to that point?
And it almost always goes back to
their upbringing and seminal events
that happened in their life that
really burned or etched a certain.
Visceral emotion around
Louie: Sure, yeah.
Jon: can and cannot do for you.
Yeah.
And that was one of those things
that I didn't really consider, but
as I have kids and raise kids, that's
something I've been very attuned to
is how I talk about money, openly.
Yeah.
With, my wife and the kids around us so
they can hear mom and dad talk about this.
I think it's very healthy because
for so long in our society, and
even today, money is still one of
those things that's very taboo.
Like some people are very secretive about
it and a lot of it has to do with debt.
And being in debt and talking about
the challenges of getting outta debt.
but really I think it starts with
just having open conversations now.
And Louis and I will talk
about how it's age specific.
Yeah.
Because dude, you talk to a kid
that's three years old, right?
You've got some kids that are
around that age and you start
talking to them about compound
interest and they're gonna be like.
Sure Dad, what's, I wanna watch
the, Sesame Street or whatever.
Bluey or some of these other, it is just
gonna be way over their head, right?
So Louis and I will talk to you guys,
today about some of the strategies
based on where your kids are at
and maybe some more age appropriate
education, for where they are.
But the one thing that I did want to talk
about really quickly, and this is more not
for your kids, but more for the listeners.
And one of the things that was a really
strong takeaway for me when I was going
through school was, and I've talked
about it here, on the episodes before,
but just a quick little brief, overview
of something called money scripts.
And money scripts are an
unconscious belief about money
that we learned in childhood.
These beliefs often drive financial
behavior, sometimes in ways that
don't align with logic, all right?
Or being what, the finance
community we'd call rational.
And this is something
that really hit me strong.
Alright, so there's two, two guys
that really drafted this and came
up with this, Ted and Brad Klon,
their psychologist by trade.
and then one of 'em actually
became a CFP, so he's got more of
the financial backing behind it.
But as they did all their studies,
it basically came down into four.
I don't know, different quadrants.
If you want to think about how
you view money and the behaviors
that are associated with this.
And as I was going through each
one of these, I've definitely seen
it in all of our firefighters.
Oh yeah, they all have, some level
of this, some more than others.
But once you understand what you're
more susceptible to or just how your
brain is wired, you can then really
start to think about how you want to
potentially change some of this behavior.
'cause a lot of it is not healthy,
it's not healthy behaviors.
so I just wanted to bring those to light.
and then I'll also reference a
book for you guys that want to do
a little bit more research on this.
if you find that it's, beneficial to you.
So the once is money avoidance.
So that's the concept that money is bad.
Rich people are greedy.
These people typically have
scripts that associate fear,
shame, and anxiety about money.
they just avoid money at all costs.
Yeah.
I'll be honest, I'll throw
my dad under the bus.
Dude, my dad is 100% money avoidance.
I love you, dad, but he just,
it's outta sight, outta mind.
Doesn't want to talk about it,
doesn't really wanna, engage with it.
And unfortunately, it's left him
in a position now in his life,
where he's having some challenges
with some of his finances.
'cause all the money has run out
now and now he's being forced to
engage in those conversations.
Yeah.
And this is something common,
I've seen this around our folks as
Louie: Oh yeah.
Jon: outta sight out of mind.
Like as long as that money just
keeps coming in, we'll be fine,
like paycheck to paycheck kind of
behavior, but they don't really wanna.
They don't wanna engage with money, they
just want to have it be an afterthought.
And, man, it leads to
sabotage a lot of times.
Louie: there's a lot of negative opinions.
People that hold this script have a
lot of yeah, rich people are greedy,
money is bad, the system is broken.
which, could be true depending on the
circumstances, but if, but let's be real,
you need money to survive in this world.
And that's just part of the process.
It's part of the world that we grew up in.
And when I say world, I literally mean the
entire world, no matter where you're at.
So to say something like that,
which, money is bad, or to have that
kind of script, and to associate
having money with, I don't know,
being bad or being evil or something
like that, it's not healthy.
It's not healthy for your
own personal finance.
Jon: Yeah, that's, yep,
that's very true, Louie.
so the second one is, something
that, they termed money worship.
And this is more the concept
that, the more money I have, it
will help me solve my problems.
so what with this is
a lot of overspending.
I mean, we see this with some of our
firefighters where they're working a
ton of overtime, and they really tie
their happiness, to their net worth.
This typically where I've seen this
play out a lot is, people that maybe
came from humble beginnings, right?
and now they have the opportunity
to make money or they have had
some success in either business
or promotions and stuff like that.
And then they continue to just
strive to achieve more and more.
but really they tie a lot of their
happiness to their net worth.
Yeah.
Once again, from a healthy
perspective, probably not the
most healthiest of behaviors.
as Louis mentioned, there is a certain
amount of money that you need to have
in order to feel safe and secure,
and we want everyone to have that.
But a lot of the studies show that,
the incremental, a level of happiness
that you derive from each dollar
goes down after a certain threshold.
Yeah.
money status.
Is another one.
so once again, this has to do with
more my self worth equals my net worth.
so they're constantly
comparing themselves, to
their friends and coworkers.
they tend to have, a tendency
to wanna overspend as well.
and they really prioritize
image over stability.
when I was thinking about,
firefighters specifically in status.
Tied to money.
What do you think would be
a status symbol with the fd?
Louie: Oh, please.
Dude, that Ford 1309, dude,
Jon: 100%.
And as I was going through this, this
book that these guys wrote was really,
more for the general public and just
some of the behaviors that they've seen.
But when I went more into our industry,
one of the status symbols for sure,
and something that you're always feel
feeling pressure to compare yourself
to, has to do with a new truck or
what version of a truck, how much
lift you have on that truck, what
Louie: size?
You got a raptor, you
got the trimmer package.
Like what do you got on that fancy truck?
Oh my gosh.
Jon: So we as an industry have been
culpable in promoting some of these
not so healthy financial behaviors.
Louie: 100%.
100%.
Jon: And then the last
one is money vigilance.
And this is one you can never
be too careful with money.
So typically these folks
have traits of frugality.
they typically tend to
have strong savings habits.
they tend to be more private
about their finances.
They have anxiety about scarcity in
the future of running out of money.
And at the end of the day, they have a
really difficult time spending money.
'cause their whole habits,
they're hardwired to save.
So the minute you go from
a saver to a spender.
They don't get happiness out of it,
it actually gives them more anxiety.
this is the one that I probably
resonate with the most.
and I, once again, I tried to think
about where I came up with this,
and not to get too personal, but
when I was growing up, I lived in
Wisconsin and my dad was a professor.
And, I was very comfortable.
We were very comfortable as a family.
I grew up there for about 14 years, had,
a strong community and strong friends.
Long story short is, my dad's contract,
didn't get renewed to be a professor.
So he grew up in Colorado and
always wanted to move us out here.
so I moved out in middle school
the last year of middle school.
And it was a challenge, man.
It was a challenge moving to a new
place, in eighth grade, and all
those things that went around that.
So I think that as I
did all of my kind of.
Interior work as they would call it.
Like I think this is where I really
developed this concept of money vigilance.
'cause we went from having a pretty
comfortable lifestyle, right?
To, we were never poor by any
means, but we definitely had a big
reset in what our lifestyle was.
We went from a really nice house to, we
went to a rental house and not so great
of a community and like all those things.
And I'm 14 years old.
At the time I didn't know any better.
But as I got older I'm
like, where do I really.
Why do I feel so, I don't even
say guilty, but why do I feel so
concerned about running out of
Louie: anxious about money?
Yeah.
Jon: And I really think it goes back to
that, that one big pivotal movement in
my life and my family's life, where I'm
like, oh, I kind of wanna understand now.
and as a father and as a husband, I don't
wanna put our family in that situation.
So I'm extra careful
Louie: Oh dude.
Jon: stuff, probably to a not healthy
Louie: honestly.
Yeah.
I mean that's, Katie
Jon: helps me spend money
Louie: in That's great circumstances.
Jon: but just from my own personal
anecdote, and I'm sure every listener can
think back, if you really think about it,
why you are the way you feel about money,
it can almost always be tied to some type
of, emotional response you had as a kid.
Yeah.
Both good and bad.
Yeah.
Louie: I grew up in a single
parent family, so very similar.
My mom, I mean, we made poverty line
of income for most of our childhood,
and it was hard, like it was hard
for her, but stressful for her.
We always worried and she.
She would let us know that she
was struggling financially.
And that was growing up with a little
bit of that insecurity really has
probably made me have some of this
money vigilant script, traits where,
you know, I wanna be frugal, I wanna
save, I'm not sure if I have enough,
even though I know the numbers and
I know the math behind it, Yeah.
You're still like, I don't know,
are we really saving enough?
Shouldn't we save more?
Shouldn't we do more?
and I think it's easy for us,
especially being, financially minded
people to be like, Hey, that's
good that you wanna save more.
that's good.
But at some point it could be unhealthy.
And when you're sacrificing your
future, or I'm sorry, your present
happiness, and your family's happiness
because you have these unsubstantiated
fears of the future, that's a problem.
that's, that is a problem.
And you should address that.
Jon: Yep.
No, I think that's well said, Louis.
So each one of those is not supposed to
be, it's not supposed to be good or bad.
It's supposed to just be an
awareness of this is how you're
pre-wired to view money in finances.
And I think some of 'em are more
healthy than others, but more
than anything, it's an awareness.
So if you do find yourself, and
you will find yourself pretty
much in one of those four buckets.
It's just to be aware.
and then there is certain things that
you can do if you're wanting to or
willing to change some of your behavior.
So just a shout out to, Brad
Klontz and Ted Klontz for really
doing the hard work on that.
if you are interested in learning more.
recommendation for the book is
called Mind Over Money, overcoming
the Mind Money Disorders That
Threaten Our Financial Health.
so I will start, linking some of
the stuff, into the show notes,
into the description so you guys
can just find it so you don't have
to remember any of this stuff.
So just strongly recommend it if
this at all has piqued your interest.
If you've ever wondered why you feel the
way about money and finances, I think
this is a good, foray, a good first
step into learning a little bit more
about yourself and how you view money.
But let's talk specifically
about money with our kids.
Louie: Cool.
So when it comes to teaching your kids
about money, I think the first thing
that you need to do is be a good example.
you can talk to them all you want about
it, but if you are someone who sets what
I'll call bad examples to your children,
they are going to pick that up and that
is what will stick with them, regardless
of what you tell them to do with money.
So if you are an impulse buyer and
you're buying the snacks and the toys
at the checkout lines or whatever,
when you go to Walmart or Target,
they're gonna learn that and they're
gonna grow up to be impulse buyers too.
Same thing if you, if If you set good
examples, like you talk openly about
money and why it's important that
you save money or that you set money
aside, or that you give some money
to those in need, they are going to
develop those habits from an early age.
So whatever you do, whatever example you
set, regardless of what you say to your
children is what they're gonna learn.
I think that's the number one thing
you have to, if you don't take away
anything else from this episode when
it comes to kids and money, it's
that the example you set will be the.
Way that they think about money and the
way they handle money when they get older.
Jon: Yeah, no, that's good.
Louie: and then I'll say this too.
I think it's okay to start early.
There is a lot of, we treat children
in a way where it's like, Hey, I don't
want them to have to worry about money.
Especially if you maybe struggled
with money or if your parents
struggled with money, you're kinda
like, I wanna shield them from that.
And I totally get that.
That comes from a good place.
But it's important to start early when
it comes to teaching kids about money.
You don't need to wait until they're in
high school to teach them about financial
possibility or financial responsibility.
And if you do, they're
probably not gonna learn it.
It's hard to raise a 16 year.
To develop good habits to, with a
17-year-old when it comes to saving
their money or using their money
responsibly, it really needs to
start at a younger age than that.
there's an idea that
you should train them.
starting when they first get their
first dollar, whatever that looks like.
If that's a 4-year-old or a
5-year-old doing a chore around
the house, that is where you should
start teaching them about money.
And you should use those money moments
when they get money to teach them
about money, if that makes sense.
Jon: Oh yeah, no, that makes a ton of
Louie: I'm gonna give you
example of how that kind of
looks in the Barilla household.
obviously I've thought about
this a lot with three kids.
I have a 5-year-old, a 3-year-old, and a.
18 month old.
So I've been thinking a lot
about how to handle this.
And one thing that I've done, which
is actually really fun, the boys
like it is I bought them, these
little, it's like a three tier or
a three sectioned out piggy bank.
There's one section for spend, one section
for save, and one section for give.
it's a really great bank and
maybe I'll link that to, it's a,
actually a Dave Ramsey product.
It's a,
Jon: oh really?
Louie: the Children's Saver
Bank or something like that.
but anyway, we, the way we set it
up with our kids is when they get
money, we make them split it up and
we say that they can spend some on a,
whatever it is, a toy that they want.
If they wanna put that money in the bank
for that's totally fine, but then they
have to save some for something that is.
unknowable right now, we just
are saving for the future.
So if they get $3, we make 'em just split
it evenly between save, spend and give.
And then, when they go to school,
they have this, this fund that they
can give to help people in Haiti
who are struggling financially.
When we go to church, we have a
benevolence fund that they can give
to that go to people who are hurting
and in need, and so we make them
do that on a regular basis as well.
But that kind of teaches
them from a very early age.
I do this both with my 5-year-old and
my three-year-old, that when you get
money in, you are assigning it a job.
Some of that is fun for you because
it's spending, but some of it is not
fun for you necessarily because we're
deferring it for a future purpose.
If I can develop that habit in those, in
my boys from an early age, I'm hoping that
it will stick with them as they get older
and eventually have jobs and eventually
have to make the decision on their
own to save and to spend their money.
Jon: That's funny.
Louie: do anything similar?
Jon: That's funny that you
use the the piggy bank method.
'cause we also have, and I don't
know if it's a, the Dave Ramsey
product or not, and I feel like
ours has four tiers or four little
slots for the plastic piggy bank.
I think it might be invest.
save.
So two separate accounts, and then
one is to spend, and then one is for
philanthropy or give, but very similar
Louie: concept.
Yeah.
Yeah.
Jon: Yeah.
so we've been doing that probably
since the kids have been, I
wanna say around four-ish.
they've been able to and same thing, we
like to just split in similar increments.
so then they don't really have
to do a lot of math involved.
It's just yeah, if you got four
bucks, it's a dollar in each one.
Louie: Perfect.
That's what we do
Jon: move forward with that.
But I want them to have some
context behind each of these things.
I don't want them to just be
investing as some abstract thing.
So a lot of the stuff that we'll
do for investing or saving is, we.
One of our things that we do as
a family that really drives a lot
of happiness for us is we travel.
We go on vacations.
that's our jam.
So a lot of times they'll use their
savings accounts or their investing
accounts to purchase something
in the future when we go on a
Louie: vacation.
Okay.
Jon: So it's something that, and once
again, 'cause we do want it to not just
be this abstract thing that Oh, yep.
Invest.
And then in 15 years you can enjoy it.
no, invest now and then.
Yeah.
And then in six months when we take a
trip, now you can take that money out and
now you've got it to do with whatever.
So I think just having something that's
tangible like that and just having
a little, and they actually like it.
They enjoy it.
They have some fun with that.
So that's the other thing, if kids,
it's just like firefighters, if they're
not having fun or engaged with it,
it's gonna go right over their head.
But I don't think, I mean, I think there
is an age, appropriate time, and I think
probably that later toddlerhood is when
it probably starts to make the most sense.
'cause before that it's all about mind.
And they're not gonna have zero,
they're not gonna have a lot
of context or concepts around
Louie: that.
Super important to keep
it age appropriate, right?
Like you don't, you're just trying to
teach them some basic fundamental habits.
you don't need to teach 'em about index
fund investing or, mutual funds when
they're in, when they're toddlers.
that's not the goal at that point.
There'll be times for that, and
we'll talk about that in a little
bit, but you're just trying to, like
you said, make it fun and engaging.
keep them.
Get them excited about
the plans for their money.
You talked about the vacation thing.
You're like, Hey, what are you guys
gonna get when you're, when you've
saved up enough money before our trip?
what do you want?
I think having that kind of goal
really is exciting for them and
it makes them want to do chores or
something around the house, which
is super cool too for parents.
got a question for you.
This is a controversial topic.
I've talked to a lot of parents.
What is your opinion on an allowance
that kids get every week versus
commissions making people, making kids
complete a job before they get paid?
Do you guys fall on the scale?
You're a little ahead of me
when it comes to your children's
Jon: no, and this is one that Katie
and I have, had, I wouldn't say
some disagreements, but we've had
a lot of thoughts around there.
so I was always brought up in a
household that had an allowance.
Okay.
So that's how I was.
Brought up and honestly, I don't
remember what my weekly allowance was.
And I'm sure that changed as I got older.
But that was how I always
was brought up around money.
Katie thinks, that's not the way to do it.
Her her thought is, and I
actually agree with her.
And there's certain things
around the house that you just do
'cause you're part of the family.
Yeah.
that's just your own
personal responsibility.
So
Louie: one gets paid for it.
Jon: one gets paid for
Louie: it.
Or you get paid in room and board.
Jon: Exactly.
Yes.
We feed you and we clothe you and we send
you to school and all those other things.
So that's part of just
the household stuff.
Now we also do feel.
Sometimes our kids go above and beyond
what we would probably just say is a
general requirement of just being a
good upstanding person in the family.
so when it is at that point, then we
will give them something, as a reward
for kind of going above and beyond
saying Hey, this really helped us out.
You did something unasked,
unprovoked, and you guys just
saw a need and you filled it.
And we wanna acknowledge that and
reward you for really going above
and beyond almost like a bonus, if
you will, or like a promotion, man,
you just didn't do your normal stuff.
You went above and beyond.
So that's really where
we've tried to land.
And honestly our kids, they do get
enough money through, grandparents
and other stuff where there always
seems like they get a little bit of
an income stream in for something
for different holidays or birthdays.
So we've tried to make it more of
an expectation, like this is just
you being a part of the family and
what you should do and not getting
paid or compensated for that.
What's your
Louie: dislike?
I
would say we're right there,
but I think Katie, obviously,
Jon: Katie was the one that
was the one that's no, we're
not just giving them $5 a week.
Like they have to understand this is part
of just what's required to be part of the
Louie: I think that's smart and I've
read a lot about it and I've fallen
on the side of commission based work.
Yeah.
So there's a set level that you have
to do, you have to clean your room
and you have to help take out the
trash and you have to do these things
that we just have to do to manage the
household that you don't get paid for.
No one gets paid for those.
and you have to help out.
But on top of that, there's
gonna be opportunities for
you to earn extra income.
And maybe that's, a good example
is we're getting ready to host a
family event and we need help like
dusting and vacuuming and cleaning
baseboards or something like that.
And if you want to grab a towel and you
want to help with that, we will give you
one golden coin for doing this thing.
And that's an opportunity for them to
actually earn money and associate the idea
that you have to work, to earn income.
And I think that is cool, whereas an
allowance is Hey, I exist and at the end
of the week I get $10, or whatever it is.
This is more no, no one's
gonna give me money.
I have to go out and actually work and
do something above and beyond what I
normally do in order to earn something.
and I think that teaches them some
really good, values of money early
on, I need to be a hard worker.
I need to work for my money if I want
to buy that toy, or whatever it is.
So that's where we fall in.
and I think that should be the
baseline for most families.
Of course, if you do it, if you do it
otherwise, and you're teaching your kids
through an allowance and you have them
do so many task lists, like I've heard
people say yes, you get an allowance,
but it doesn't show up unless you.
Check off these 10 boxes
at the end of every week.
I get that too.
And I think that there's good
lessons to be learned that way too.
So no judgment if you're
doing it that way.
I do think you have to have a plan though
for how you give kids money, showing them
efficiency, showing them that there's
work that needs to be done for that.
and then on on that topic of making it
hands-on engage, and the last thing I'll
say is there are games you can play or
things you can do to teach kids about
money from starting from a young age.
One of the one cool thing that we do is
we, we we have this pizza making kit,
like this play pretend pizza making kit.
And the boys have, they
like to make pizza.
They'll put the different toppings on,
they, cook it basically, or bake it.
but then we talk about like money.
I order a pizza, I call
them up, I order a pizza.
They have to determine like how
many toppings we put on and how much
money that's gonna be and how we're
gonna split it between the brothers.
So it's just a way, it's just a simple
way to talk to them about you're
doing this service you're making.
Pizza and then you're delivering it
and I have to pay you for that service.
It's just a way to, to get them to
think about the economy, basically.
So we we, these actions happen.
Yeah.
we you just use it as an opportunity
to throw in the economic side
of finances, from a young age.
And I think that they are starting to get
it and they're starting to realize, oh
yeah, like I need to be paid for this.
And if we're gonna put on extra toppings
or something, there's a little bit
more money that needs to go into it.
I don't know.
I
Jon: And I think that's super
healthy too, because a, especially
at their age, it's helping them
with their math skills for one.
So it's teaching 'em about,
math on top of finance.
But the one thing that I've noticed,
and this, I see this in my kids a
lot, and I think it's gonna only
continue to, become more evident.
The whole paper currency
is just going out the way.
So people, and probably in that
circumstance you probably still
play with play money, right?
So they can actually like, physically
exchange it and what that looks like
and add it up and everything else.
I think there's a huge benefit to that.
'cause right now I think, and
Katie and I are no different.
We spend probably almost 99%
of our stuff is on a plastic.
on a credit card.
Yeah.
Sometimes via phone or
actually the physical card.
But the kids have zero idea.
They just see a plastic card
come out, us sign something,
Louie: and we get whatever we want.
We get
Jon: whatever we want,
Louie: by tapping this
little plastic card.
Jon: So I think actually, and this is
going back to the day, Dave Ramsey,
like envelope method, but actually
okay, I've, this is my wallet.
I've got a finite amount of
resources, money in here, and
then once I buy something.
It's gone.
It's no longer there.
I think that, especially at a very
young age, I think is very helpful
Louie: That's a great point.
It has to be physical.
It
Jon: start understanding the concepts
around money and having a finite amount.
It.
So I think that's a, I think that's
a great thing that you do with
your kids to just demonstrate.
And once again, so they're
having fun with this.
It's engaging.
We're not sitting down and going through
a sheet and being like, here you go.
I mean, it has
Louie: be interactive, right?
I'm not showing 'em the spreadsheet.
I love spreadsheets, but I'm not like,
let's talk about this spreadsheet, son.
Yeah, no, definitely not.
So that's the idea of, let's
expand on that a little bit.
I, different kids depending on
their age, are able to handle
concepts about money different.
Yep.
So at the preschool age, we're just
trying to teach them that money exists.
Talk to them about what it means
to have to go to, why does Papa
have to go to work for two days?
Why?
It's not just because he likes hanging
out and having to sleepover with
his fun friends at the firehouse.
I have to go be away from you
guys for two days so that I can
get money to pay our bills and to
pay for food and stuff like that.
So I just try to.
Keep it very simple.
We play pizzeria or play, store.
Yeah.
you're just trying to give them
an idea of what it means to, to
make money and how we spend money.
Yeah.
I think that's the important
thing about the preschool age.
Jon: This one, honestly, this
one has been hard for us.
so it's inverse our relationship.
So Katie and I, because
now I work in days, right?
So I'm home every
Louie: Oh sure.
Yeah.
Jon: And my wife travels a lot.
so the kids, are starting to, wonder
why mom has to be gone all the time
or why she's gone all the time.
And, we have a lot of conversations
around moms making up some sacrifices
for our family to better us and our
future, but her job is to go and travel
and make money and what does that do?
And that helps, support where we
live and the fun things that we
get to do and saving for college
and all these other things.
We're very open about.
Why that is, but it
doesn't make it any easier.
And I know I'm preaching to the choir
here, and it's, like I said, it's inverse.
the firefighters are the ones that
are having to explain, why they go
away for two days, while mom and dad
have to hang out, and take care of us.
But it's that concept of well, we're
doing this, so we can support the family.
This is how we make our money.
So I think that's important though,
is just having those conversations.
Louie: Yep.
Yep.
At the preschool age, that's important.
And then in elementary school, that's
when we can teach them the importance of
saving money and of delayed gratification.
That's a really hard thing.
And let's be real, you
firefighters listening to this.
We know you guys can struggle
with delayed gratification too.
Jon: Dude, just even we were talking
about the FLSA cycle and working overtime,
but not getting paid until sometimes
six, six weeks in arrears, you're just
like, oh my God, this is ridiculous.
I need that money now, right now.
Yep.
Louie: Yeah.
but that's, at the elementary age that's
when they're ready to learn about that.
if I save money, I can get whatever
it is, this bigger toy or this better
toy or whatever it is, versus spending
it all on candy as soon as I get it.
elementary kids are ready
to learn about that.
and I think it's also important
during that time is to let
them make those mistakes.
let them run outta money.
Let them spend their money on something
stupid, while maybe their brothers saved
it up for a few months and then brought
that, bought that really cool toy.
man, there's no better time to make
mistakes with money than when you're in
elementary school when the stakes are
Jon: Stakes are low.
And this is one, I don't know if your
kids have done something similar, but
at least in our neighborhood, there's
a lot of lemonade stands that pop up
and like small little things where
they have the opportunity to once
again, potentially earn some money.
Make some money, and they interact with
people that are buying whatever, like
I said, whether it's lemonade or snow
cones or cookies, whatever that is.
So I think it's a great
opportunity for them.
it just, it goes another level
more than the preschool where now
they're actually interacting with
people outside of their family.
Yeah.
Like with, neighbors or
friends and stuff like that.
And having conversations about what trade
looks like and a business looks like.
and once again, we don't
go much beyond that.
We don't even get into
the tax conversation yet.
But it's just an opportunity for them to
start to express, how they're gonna make
money potentially and what it feels like.
'cause a lot of times it feels
good for them to do something
and then get paid for it.
And now they got this money to
go buy something that they want.
Louie: Yep, yep.
Jon: great opportunity at that age to do
a lemonade stand or something like that.
Louie: We got a lot of
'em in our neighborhoods.
Yeah.
So I, and we try to buy, we try
to shop and buy because it's let's
talk about these kids are being
industrious and they're, trying to do
something cool and provide a service.
let's support it.
and then I think, same thing around
elementary age, you can teach 'em
to give, I think it's important
to instill the values of giving.
that's important to our family is
to give to those in need to those
who are less fortunate than we are.
And so that has.
we've even really started at the preschool
age, but definitely by elementary.
The idea of giving to those in
need and why that's important.
we're very blessed and we
have done well financially.
And so there are those that don't, that
have not been, as lucky as we have.
And it's okay and it's good
to, to give to those causes.
So by elementary school, if that's a value
for your family, you should be really
imparting that to kids by having them,
give money to charity and to good social
Jon: Yeah.
No, I think that's, I think
that's super important.
so obviously as we go up the kind of
the hierarchy or the age spectrum,
now we're talking about that preteen.
So we're talking, end of elementary
school, beginning of middle school,
definitely the awkward years and
a whole host of different things.
but this is one now where kids really
can start to value and consider
the importance of working more.
A lot of 'em will do, things
on, in the summer, on the side
jobs, like all sorts of different
Louie: things.
Yeah.
Shoveling snow, mowing lawns, maybe.
Jon: And money for them now at
this point because they're hanging
out with their friends and wanting
to go do things outside of, just
hanging out with the family becomes
way more important for them.
Yeah, They're asking for money now.
Yeah, because before you're
just going out as a family.
You go into the movie and it's okay, mom
and dad are picking up everything, but
now they're like, Hey, it's Friday night.
And I'm going out with Jimmy and
we're gonna go catch a movie.
So I need 25 bucks pops.
So now you're like, okay, now you
have to have conversations more
around like the value of money and
what can you do to help support some
of the things that you want to do.
So there's way more buy-in now at
this age, to really start to have
those conversations around budgeting.
Yeah.
Right now you can start to talk about,
okay, you've got a finite amount of money.
This is how much money you're
making this week, or Right.
Or whatever.
And you want to go do these things.
you can start to orchestrate what
budgeting looks like and help
them, and support them with that.
Louie: I, I think this is a great time
to pull out the spreadsheet for kids
and I, I don't think elementary school
you need to do it, but at some point
you need to be like, well, let's sit
down and create a plan, whether that's
a spreadsheet or whether that's a
notebook, but having a way where you
can plan out your future expenses.
They get that the pre-teen age,
they're ready and they know that they
have some big things coming up that
they want, or they have a video game
system that they wanna buy, and it's
gonna take quite a bit of saving and
a lot of commission work that they
need to do before they can get it.
Now you can wave that carrot in front
of them and have them work towards it.
Great age to do that thing.
And also related to that is
that's the time where we can
teach 'em about opportunity costs.
The pre-teen ages.
Now they're, they can conceptually
understand opportunity costs and
just for those that need a little
reminder of what opportunity cost is.
Opportunity cost is what you give up
when you choose between two options.
Whether it's just keeping
it simple for kids, again.
buying candy now versus buying
a $60 video game in four or six
months or something like that.
Do I want that now?
Do I want that instant gratification
or do I want to put that off and
give that up so that I can buy
this bigger item in the future?
Kind of teaching them that at a young
age and how to think through that.
the pre-teen age.
Perfect time for that.
Jon: I think that's, a good, age
appropriate, interaction to have.
and then last but not least, obviously
now we're talking about teenagers and a
lot of the challenges that go with teens.
and really now getting into the real,
they're becoming young adults, soon
to be young adults, and now they're
really having to grasp more with like
reality in the real world and really
what money, how money works and how
it serves a purpose in their life.
So this is really where hopefully now,
they do have some type of, way that
they're making money on their own.
And this is really hard
too in our culture, right?
And a lot of.
firefighters and our friends, their
kids are heavily involved in sports.
Oh, big time.
Sports.
Sports.
sports.
And I'm not to try to dismiss that
'cause I think sports are valuable
for a lot of different reasons, but
sometimes I think it is at the detriment
of kids being able to be kids and have
a summer job or be able to make money.
and all they know is just sports and
they're going across the country,
traveling to all sorts of stuff.
And that's their job,
Louie: all year.
these families are doing it all year.
It's wild.
Jon: and that's challenging, but
I think now is the time to have
those conversations with your kids
on money talking about, budgeting.
And then you're starting to
have more adult conversations
about investing, right?
Really now you can really start
to talk about, okay, that's great.
You worked at, the pool, or you cut
a bunch of, or you mowed a bunch
of, lawns, and now you've made four
grand or $5,000 over the summer.
That's great.
let's talk about what are we
gonna do with that four or $5,000.
Hopefully we haven't just spent it all,
like hopefully we've saved some of that
money and now let's talk about ways that
we can make that money grow and that money
will then make other money and really have
those concepts around investing compound
interest and how to invest wisely.
by the time your kids get to,
13, 14, 15, they should really
start to be able to understand
some of that stuff conceptually.
Louie: Yeah.
I mean that, this is high school age.
they need to know about investing
in comp compound interest.
They also need to know
about credit and debt.
Yeah.
And the dangers of that.
how it could be a tool maybe, but
how it could also really burn you.
so that's your time to really just be very
open and honest with 'em about everything,
about your finances and about how you
save and how you think about money.
'cause they're gonna ask, like they
will find opportunities to ask you
about your financial situation.
And I think a lot of parents,
like for decades, I think for
generations past, they'd be like,
wow, they don't need to know.
I don't need to tell 'em about my money.
Yeah.
I just don't think that's the best option.
I think just being really open
and frank with them about money.
even money problems to a certain extent.
I'm not saying you should burden them
with your financial problems, but you
should talk to them about things that
you've had to think through or sacrifices
you've had to make in order to save for
your future or to save for their future.
it's a great opportunity
to do that as a teenager.
Jon: Yeah.
I've seen, I've seen this play out
the most and maybe you have too,
Louie, just talking with a lot of,
our firefighters is where this concept
really comes to a head is college.
Yeah.
And when we start talking about where
we're going to college and how much
college is gonna cost, this is really
where you have to be completely
transparent as a parent, And say Hey, I
was able to save this amount of money,
or maybe I wasn't right, but this is
basically what our family can contribute
and now we want to go to this school
and this is how much money this costs.
And I'm telling you right now, this
is the thing that really brings it
home for kids and parents, both where
they realize, some of the Challenges
of maybe not saving up for college
and just having those conversations.
Yeah.
so this is one that, once again,
I think there's a lot of different
resources out there when you're talking
about college and affordability, and
we'll talk about that in the accounts
section here in just a second.
But this is really where it comes to a
head and where there's a lot of sometimes
pretty difficult conversations mm-hmm.
About man, that's great that you got into
this school and all these other things,
but we're looking at all these costs and
Louie: And here's what debt can happen if
you decide to go outta state or whatever.
totally.
Yeah.
And I think finally, I'll just say
this about the high school years is
that's, this is your, probably your
last chance to drive home the importance
of being a saver, being someone who
just is gonna commit to saving some
of their money or, and setting aside
money for rainy days and for the future.
If you can't do it now in as a high
schooler, if you can't teach that
to them, they might never learn
the importance of that, or they
might not learn for many years.
And it'll cost them a lot of money and a
lot of heartache, if they're not a saver.
So being a saver is really important.
Teach it to them by the teenage years.
just do it.
Like you gotta save, you
gotta save some money.
yeah.
Jon: Good.
So that, I think that's really wraps up
the conversation around at least talking
about money and some of the education
that goes around money with your kids.
obviously from the time they're little
kids like toddlers in preschool all
the way up until they're young adults
in high school and going off into the
workforce at some point or college or
whatever that avenue looks like for 'em.
So now that we've got that behind
us, let's talk about some of
the avenues in which you can use
different accounts to help support
your kids or set them up financially.
Okay.
So there are different options with that.
So we'll talk about this
one first and foremost.
Louie: Can I just give
a quick disclaimer here?
Yeah.
I, so before we talk about how you can
save for your kids, which I know comes
out of a great place, like parents want
to help their kids and that's awesome.
But I just wanna say that any kind of
saving for kids should only be done after
you have saved adequately for yourself.
So your goal as a parent should to not
be a burden to your children someday.
So I don't think that you should be
sacrificing your own retirement savings.
And your own emergency fund savings in
order to fund your children's whatever
college or just a down payment for
their house or anything like that.
Focus on your own retirement and your
savings account before you consider
opening an account for your child.
And it's okay if you don't have
a lot of money to save for them.
After that, you, number one goal
is to save for yourself first.
And I know that sounds selfish,
I know that sounds, but it's not.
What you're really doing is
you're not being selfish.
You're making sure that you're in a
position that your kids won't have to
take care of you when they become adults.
So only consider these things that we're
talking about after you have adequately
funded your own retirement accounts.
Jon: Yeah.
the famous saying with that is, you can
always borrow for, your kids' future,
whether that's college or other things,
but you can't borrow your retirement.
Exactly right.
You can't, there's no loan you can
take out there when you're ready to
retire and there's no money out there.
So you do have to, it's they
always, Talk about the example
when you're on the airplane, right?
You gotta put your oxygen mask on
yourself first before your kids.
And in the circumstances,
finances is true.
You have to get your financial house
in order first in order to help
them and their financial house.
So I think that's super important.
Good clarification on that, Louis.
So this is assuming that you're
taking care of yourself financially
in your retirement and your future,
before you're helping out your kids.
So one of the very popular avenues
when it comes to accounts and,
saving for your kids or saving for
goals for your kids is college.
Mm-hmm.
We just talked about the cost of
college and there will be a whole
episode of college and how to
navigate college here in the future.
This is something that I get asked
a lot about, and it's constantly
changing, but one of the good accounts
out there is something, and most
of you have probably heard about
this, it's called a 5 29 account.
Once again, 5 29 is for the, section
in the Internal Revenue Code.
Anything.
Any type of account of
financially 4 0 1 5 29 4 57.
It all is just the precursor
to the internal revenue code.
So that's where this is cited.
but really what this is this is
an avenue for you as a parent,
to help saving for your, for your
kids on a, taxed advantage basis.
So what this looks like, and once again,
we're in the state of Colorado, right?
That's where Louis and I are based.
So that's what we're
the most familiar with.
So if you're listening outside of the
state of Colorado, each state has their
own little provisions and their own,
accounts in order to fund this in order
to get a, state income tax deduction.
Alright?
So this is not a federal.
Tax deduction.
So you're not gonna save money by
putting into these accounts on a
federal tax basis, but there is
the opportunity that you can save
some money on an income tax basis.
So basically what happens is your
money comes from a post tax account.
So you can't do any of this stuff pre-tax.
So you'll get money, you'll
get your paycheck, or you'll
get a windfall or whatever.
So you have this money and then you
can allocate how you want to do it.
but then you can set it up,
through different, accounts.
So in Colorado, if you want
the state income tax deduction,
you would go to college invest.
That's our state sponsored plan, right?
Like I said, almost every state
has their own state sponsored plan.
So if you're really trying to
take advantage, and get the
income tax deduction from your
state, use a state sponsored plan.
So once again, for Colorado,
that's college Invest.
If you just, Google that Chad, TPT
at whatever college invest, it'll get
you to the landing page from there.
So your money goes in, like I
said, it goes in after taxed,
but depending, there's different
avenues in how it can be invested.
That money will then grow tax
deferred, so you're not gonna pay
any taxes on that on a yearly basis.
And then assuming it gets used
for educational purposes, and once
again, the IRS lines out exactly
what you can and cannot use it for.
It will grow tax free and then when
you pay a tuition bill or something
else associated with education,
it then comes out tax free.
So it's very similar to,
kind of retirement accounts.
As long as they're
qualified to some degree.
So the key point with this though,
is you have to use after tax money so
it can, it doesn't come out pre-tax.
You can get potentially
an income tax deduction.
from your state.
From your state.
Yep.
And then it'll grow tax free
as long as you invest it.
and then when it is taken out, it
will then, not be taxable as long
as it is for educational purposes.
Louie: And the educational
requirements, what they consider qua
a qualified expense is pretty broad.
Like it doesn't have to be your
traditional four year college.
It could be, EMT school or a paramedic.
It could be vocational, it could
be, an apprenticeship program.
It could be flight school.
if you wanna send a kid to flight school,
they're, it's very generous in terms
of what they consider to be continuing
education or post-secondary education.
So it's not like they need to go to a
traditional four year college in order
to be eligible to spend that money.
Jon: And it can also be used for
K through 12 education as well.
the last, limits were 10,000 a
year, I think in this year, 2026.
They're actually gonna double that
Louie: it's 20,000.
Yep.
Thousand
Jon: per year.
But really, I mean, you guys can imagine
the magic with these plans are, is
getting it funded early and often.
Really getting that
opportunity for it to compound.
if you're only doing it the last couple of
years, something is better than nothing.
But really where these things thrive is
if you can set money up earlier on in your
kids' life and hopefully let that thing
grow for 18 years, that's a huge benefit.
Yeah.
Huge benefit to get as much
money in there early on.
If you really think this is something
you wanna save for, you're gonna have a
much better return on that investment.
Louie: And so we'll say
this before we go on.
I'll just say that I think the 5
29 is the best account for kids.
And you have to determine like the value
you spend on, the value you place on
education for your children, and if you
think they're gonna go to college or not,
because tying up all that money into,
educational purposes that they might not
use might not be the best because you have
to pay a hefty penalty if you use it for
something other than educational expenses.
So you gotta really think about where
your kids are and if you're gonna really
place a lot of value on education.
I know we do in our family, and I have a
lot of conflicting feelings about college
and about the cost of college, but we're.
Place an emphasis to our children
on continuing their education
after high school, whether that's a
traditional college or a vocational
training or something else.
We do want them to continue to
get skills and knowledge and
education after high school.
And then what I think makes it a no
brainer, at least to saving a certain
amount in a 5 29 account is there was
a new tax, law that, went into effect
a couple years ago that allows you
to roll over up to $35,000 total from
your 5 29 account into a Roth IRA.
So even if they don't.
Spend all the money that
they have in a 5 29 account.
you can roll that into a Roth IRA account.
They can roll it into a
Roth IRA account for them.
So you're basically, you
could be pre-funding their
retirement account in a Roth.
I a, which as John and I think are the
best accounts for almost anyone as a Roth
IRA, they, you can actually get up to
$35,000 in that, of that 5 29 into a Roth
IRAI think that makes it a no-brainer.
I think this is the best
account to save for.
We'll talk about some other options,
but you should really consider if you
have children you wanna save for them.
I think a 5 29 is great.
Jon: Yep.
and that just speaks to the
importance of getting this
started sooner rather than later.
'cause there are certain,
requirements to do that.
5 29 to Roth, IRA rollover,
like Louis said, at a minimum
it's gotta be open for 15 years.
The account does.
and then it is limited to how much you
can contribute to a Roth IRA each year,
for this year I think it's $7,500.
So it's not like you can just roll
it over as soon as they turn 18, you
can put 35 grand into their Roth IRA.
It's gotta be phased in over,
at this point it's gonna take
you about five years to do that.
But it's a great starting point.
It's gonna give your kids a huge leg up.
Yeah.
So at a minimum, I think if you are
thinking about setting up your, accounts
for your kids, a 5 29 makes a ton of
sense and getting to at least that 30
5K amount is gonna be super beneficial.
Yeah.
and I just wanted to give a quick
shout out to, once again, I know most
of our listeners are in the state
of Colorado, We went back through
the website at College Invest.
so just know right now you
can get a 5 29 account set up.
the state will actually front load it.
So without you even investing
anything, just by opening up account,
they will give you $121 to seed
that account, to start that account.
and then for the next three years,
they will match dollar for dollar.
Five up to $500.
So if you contribute at least $500 in
the first year to your kids' account,
the the college invest will match that.
So they will give you $500 and
that plays out for the next three
years or for the first three years.
So once again, Louie and I are
huge for, huge fans of, free money.
This is literally free money.
I mean, if you just open the
account, they'll give you $121.
That is as free as it gets.
And then once again, if you
put in dollar for dollar.
Up to $500, they'll match that.
That once again, is free money.
Yeah, you have to put up the 500 bucks,
but you're gonna get $500 in return.
So as we talk about strategies to
help support your kids and think
about their financial future,
this, to me is a no-brainer.
at a minimum, if you can get $500
in there for each one of your kids
for the first three years, they're
gonna, they're gonna match that.
and it's gonna, and it's gonna
give them a starting point.
So I think that's super important to just
bring up how that plays out and works out.
All right.
so
Louie: lot of people are
talking about this next account.
This is so good.
Such a great account.
Beautiful.
It's beautiful.
Beautiful.
Jon: Yes.
these are the Trump accounts.
and it actually, that's an acronym,
and I should probably look at
what the acronym stands for.
and they tailored it just for that.
But this is something, that did get
passed in the, one big beautiful bill act.
All right, so this is
gonna go retroactive, so it
actually goes back to 2025.
So in order for your kids to qualify
for this, at least to be able to get a
contribution from the government, they
have to have been born January 1st, 2025.
and this will extend in the
future until December 31st, 2028.
so basically in the government
contribution will be $1,000.
So if you open up one of these
accounts, similar to like we
talked about, the 5 29 account, the
government will seed the first $1,000.
Alright?
They will fund that into that account.
And that funding is not gonna take
place until July 1st of this year.
So even if you do open up an account,
and I know a lot of the custodians
and everything else are just
getting brought up to speed on this.
but that won't take place
at least until this July.
But if you do open up a Trump
account, the government will
give you $1,000 to seed that.
Louie: Yeah.
And that's, once again, free money.
Jon: Free money.
I get
Louie: it.
You can contribute to this account.
You can create an account for a child
if they're not born within between 2025
and 2028, however, you're not gonna
get that a thousand dollars match.
I don't know.
I, you can contribute up to $5,000
per year in that account if you want.
It's on an after tax basis.
but the money does grow tax deferred,
and as long as it's spent on an
eligible expense or a qualified
expense like education or starting
a business or purchasing a home,
then it is spent tax free as well.
It's an okay account.
I mean, I don't have anything pro John,
do you have any problems or anything
that super excites you besides the a
thousand dollars free government funding?
Jon: Yeah, so what this is meant to
do is it's supposed to make everyone.
Have some skin in the game when
it comes to the stock market
and starting to get some assets.
That was really the thought
process behind this.
'cause there's still almost
50% of our population in this
country that doesn't own a stock.
So that's really what the purpose of
this was, is if kids did not have an
avenue, or people didn't have an avenue,
is it was supposed to create more of a
level playing field and try to reduce
income inequality in our country.
That was really the
thought process behind it.
most of the people that
I talk to are my own.
professional thoughts are, this is, I
think it makes sense to get the match at a
minimum once again, or get the a thousand
dollars not even talking about the match.
Just open up the account.
If you're eligible for that
contribution, that's a no brainer.
That's gonna be a thousand dollars.
And if you'd never even touch that
thing, by the time 1820 years comes
around, that's gonna be, just at normal
rates, that's probably gonna be three
grand that your kids are gonna have
that you didn't have to do anything for.
All you had to do was
fill out some paperwork.
So at a minimum, I think it makes sense.
If you have a kid born between January
1st, 2025 through December 31st, 2028,
it makes sense to open that account and
have that government seed that no brainer.
Other than that, though, I'll be
honest, I think, there are better ways
to save for your kids, either college
or if you want them to have a down
payment for a house or if you want
them to, be able to start a business.
I think there are better strategies
and better accounts, rather
than those, that's just my own.
My own 2
Louie: I agree.
Totally agree.
Jon: All right, so one of the other
things that you may have heard of or
you may, some of our listeners may
have had one of these accounts set
up for them when they were kids are
what are called custodial accounts.
All right?
So there's two different types.
There's an ugma.
And an UTMA account.
So UGMA that stands for
Uniform Gifts to Minors Act.
Alright, so these things have
been around for a long time.
These things were like, started in like
the 1950s and basically what that was
is that was a way that parents could
set up a, an account for their kids,
hence the custodial nature of it.
And they could invest in things
such as like stocks and bonds
and financial assets like that.
that thing was pretty much superseded.
The UGMA accounts were superseded by what
is called the UTMA accounts, UT MA, that
stands for Uniform Transfers of Minor
Act and that was put in the eighties.
And that's basically all that I've seen.
Now, I have not seen an UGMA account,
honestly, I only see Upma accounts.
and really the only difference with
these are, once again, they're custodial
accounts, but on top of being able to
put financial assets in there, you can
also put real assets in there, pretty
much like real estate business interests.
Stuff like that.
so what's important to note about this
is you are the one, if you are a parent
and you set one of these up for your
kids, you are the one that gets to manage
and have a say on how it is invested.
But your kid.
Owns the account.
Mm-hmm.
All right.
So that's something you have to
consider when you open up one of
these things is, if you have a, if you
have an issue with your kids or you
want to disinherit them and transfer
this, it is by the IRS's standards.
It's an irrevocable gift.
So once you put this into
place, your kid now owns that.
Account, you cannot change the beneficiary
like you can with a 5 29 account.
So that is one of the things to really
consider when you're setting up one of
these things, is, it doesn't allow a lot
of flexibility once the accounts are open.
It allows flexibility in how the account
is managed as you being, the person
that can see how that account's managed.
But the ownership never changes,
and it's gonna be your child
that is going to be the owner of
that, the legal owner of that.
So something to, consider
strongly with that.
there are no contribution limits to
one of these accounts, so it's very
similar if you want to think about it.
So Louie and I, last episode
talked about a taxable account.
That's what this is.
It's an taxable account for your child.
You're managing how the money
is allocated in the investments,
but they are the beneficiaries.
They are the owners of that account.
There is also something called the
age of majority, and this is also
the caveat to this account is the
age of majority in Colorado is 21.
So even though you as, the set upper
of the account, you get to say how
the account is being managed once
your child reaches 21, at least in the
state of Colorado, they have complete
and full utter access to that account.
Louie: And you don't get a say
Jon: you don't get a
Louie: you don't get to do
anything with it after that point.
Jon: Correct.
they now by law have full access to that.
So if you have set up quite a bit of money
for it or grandparents have set up quite a
bit of money for that and now Junior has,
call it a hundred grand, that's something
to really consider is most 21 year olds
able to withstand the peer pressures.
and the temptations that having a fully
funded account now of call it a hundred
grand, are gonna be so something to
seriously consider when it comes to that.
Yeah.
I know what a lot of
people are thinking though.
Some of our savvy firefighters
are thinking about.
Dude, this is great.
This is great because I'll just shield
this, as a way of paying less taxes.
Right.
I'll just, I'll just fund a
lot of this, I'll fund a lot
of this, account with money.
and then it's gonna be
taxed at my kids' rate.
Which is super low 'cause
they're not making any money.
And here I am at a higher tax bracket.
Not so fast.
Oh, not so fast.
there's something called
the kitty tax rules.
Alright?
And we won't go too in depth
into this, but IRS is smart.
They're gonna get their money so
Louie: Sam gets his,
Jon: Yep.
So you can't use this to basically
shelter, income or pay your lower
income tax rate, at your kids' rate.
So just know that if that's your strategy,
and that's why you'd wanna fund this,
there's better avenues out there.
This is not gonna be a massive tax saving
Louie: You'll still pay
Jon: You're gonna still pay taxes.
So I'm not gonna get any into any
more of the kitty tax rules with that.
you can look 'em up.
It's pretty self-explanatory, but just
know that, your kids will get a very
small tax break at the very beginning,
but typically it's not worth setting these
up if that's your number one strategy.
Yeah.
So it's something to know about and
like I said, I'm not against them.
I think there's a time
and a place for 'em.
but also know that it should not be
considered a use as far as a tax shelter
or reducing your taxable liability 'cause
you're still gonna end up paying taxes.
Yeah.
Louie: I'll just go real
quick onto the next account.
because I, there's this really cool
account that's like a UGMA or utma, and I
think it's only offered through fidelity.
I don't know why.
None of the other brokerages do this,
but they have something called a Fidelity
Youth account, or it used to be called
a Fidelity Teen brokerage account.
But really what it is it's a way
for kids between 13 and 17 years
old to have a brokerage account and
to actually invest their own money.
So you as the parent are still, On
that account, and it's still under your
direction, so to speak, but they can
open this account with a dollar minimum.
There's no fees associated with it.
They'll even give you a debit card
or give your child a debit card.
and it just gives them a way to open
the app, invest money, learn about,
compound growth by saving and investing.
I think it's a cool account if you wanna
do something more for them than a regular
checking account or savings account.
Once they become eight, once
they turn 18, that youth account
will transition to a brokerage,
like a regular taxable brokerage.
But now they have a brokerage account
with a reputable, investment firm, and
they can continue to keep adding to
that or watching it grow or whatever.
So if you didn't want to go through
the whole Ugma, UTMA thing, but you
just wanted to help your kid invest
or save for money, like maybe they're,
we talked about they're a teenager
and they have a lawn mowing business,
they can put money into this account.
Under your direction and under your kind
of oversight and just save money for that.
It's a kinda a simple way to get
them investing or learning about
investing at a relatively young
age when the stakes are pretty low.
So that
Jon: that's great.
That
Louie: could be something
cool to consider.
I'll probably do that when
my boys are at that age.
I'll create these
accounts for them, I think
I think Yeah,
Jon: it sets the seeds early for that
and then, then it just transfers over
when they become an adult to just a
regular taxable brokerage account,
which once again, sets up good habits.
It's so much of this is
just setting up good habits.
so they don't have to create
those, when they get older.
Yeah.
And last but not least is Louie
and I's personal favorite.
And that's the Roth IRA.
So once again, this
requires earned income.
So your kids have to
have, income coming in.
So it could be from babysitting, it
can be from all sorts of stuff, but
they have to show that they have
earned income in order to fund that.
and this is one that, I mean,
honestly, when my kids get to this
age, I'm gonna do some type of match.
So if they're willing to, let's
say they make five grand, over
the summer and they're willing
to put in 1500 bucks, guess what?
I'm gonna put in 1500 bucks for them.
'cause you can go up
to their earned income.
you can do, you create your
own employee employer match in
that circumstance like that.
But, contribution limits are the same
Louie: And just to be
clear, you gotta be careful.
You can't just say oh, well they
haven't earned income because I gave
them money for watching their little
siblings, or they mowed my lawn.
Yeah.
It has to be reportable.
It has to be an income.
think of money from like a W2 job.
if you got money because you
work at McDonald's or something
like that, then it's eligible.
It doesn't have to be the money
that they earned from them or
from that job that goes into that.
it doesn't have to be the same $5,000
that they got from their summer job.
They just have to have that money.
And if they made $3,000, then you,
if you wanted to, you can contribute
$3,000 on their behalf into a Roth.
IRA.
They just have to have earned income.
Honestly, though, it's
the best way to do it.
if you really wanted to save for
their future, boy, that would be
a great option if they have earned
income and you wanna do a match.
John, I love that idea.
I think that's awesome.
Is, Hey, I want to talk to you about,
a father match for your summer job.
any money that you put in, I'll
give you a hundred percent match.
I think that's a great way to
motivate them to save for their
Jon: Well, and hopefully that's
what it's gonna be like when they
get to the real world, right?
And they end up doing a job and they
have an opportunity to work for someone.
If they do in a corporation, they
understand this is how it works.
Like you putting a certain money and
they're gonna put in a certain money.
So it's, once again, so much of
what we try to do around here is
just creating or thinking about
good behaviors, good habits, and
establishing those habits from an early
age I think will be super beneficial.
Yeah.
the last little point I wanted to make,
and this is not like a specific account,
but this is just something that I would be
remiss as we talk about kids and accounts
and behaviors and everything else.
Most employers will have the ability to,
contribute to a flexible spending account.
You guys can go back to some
of our previous episodes
where we've talked about this.
I know here at West Metro, we do
have a flexible spending account.
and this is specifically
for dependent care, right?
So once again, the good Lord
has heard our wishes and they
have increased this amount.
Lou and I gotten on a little
tirade a couple episodes ago, how
they hadn't, adjusted this for
inflation in like almost 40 years.
But long story short is, if you and
your spouse both work, so you, once
again, you have to, the purpose behind
this was to help out working parents.
you can contribute pre-tax.
So once again, you're not gonna get taxed
on this money up to $7,500 per year.
So most of the time you do this, it's
during the open enrollment season.
but there are certain qualified
events that happen in life, where you
could do this throughout the year.
So once again, reach out to your HR
divisions and professionals if this is
something that you're interested in doing.
But this is another no-brainer.
Yeah.
If you are working and your
spouse is working, you should.
And you're paying for daycare,
You should do this because it is
going to save you on your taxes.
it's a no-brainer.
Yeah.
100%.
And
Louie: this doesn't, this
is not money for them.
This is not money that you're setting
aside for their use in the future.
But at having children, this
will help you tremendously.
You'll get a tax break on
the money that goes in there.
dependent care FSA is great as a parent
when you are paying for childcare.
Jon: it's just helping to support what's
already a very expensive endeavor.
It's just gonna help,
subsidize a little bit of that.
I would be remiss if I
didn't talk about that.
I think so many people
miss the boat on that one.
And, for most of our folks, if they max
that thing out, they're looking at, I
don't know what, probably about a $2,500
saving in taxes just by doing that.
great.
a no brainer.
All right, so that was
a long episode guys.
Thanks for staying with us.
Super important.
Lou and I love talking about
our families and our kids.
we've put a lot of time and effort
into both of 'em, right into trying
to, set them up on a good course.
and I know you guys are no different,
but this is one that really, the actions
and the behaviors and the conversations
that you display, even at an early age,
it really is gonna make a difference.
'cause if they're not learning
it from you, they're gonna be
learning it someplace else.
So this is where you're gonna have
a little bit more, a little bit
more say and what that looks like.
Louie: you gotta be diligent and.
It's intentional about talking to
your kids about money, for sure.
Jon: Yep.
all right.
we love you guys out there.
take care of yourselves, take care
of your families, take care of
your crews out there, and, we'll
be chatting with you real soon.
Louie: Stay safe and keep saving.
The Fiscal Firehouse Podcast is
a podcast curated specifically
for local 1309 members.
This podcast is for informational
and educational purposes only,
and should not be construed as
professional financial advice.
Should you need professional
advice, consult a licensed
financial advisor or tax advisor.
The opinions of John Beatty, Louis
Barilla and their castmates are
solely their own, and don't reflect
that of West Metro Fire Rescue.