¶ Defining Finance and Personal Connection
This is Finance with Kids, a podcast to teach kids all about money. I'm Steve Coffran.
And this is Ava Cochran. On this show, we take questions from kids all around the world and help provide answers so they can become financially successful on their own.
So let's jump in and learn all about finance.
Dad, you mean learn all about finance.
🎵 Music
So Dad, I know you love finance.
Yes, I love finance.
Yeah, like I was saying, you love finance. But most kids don't even know what that means, especially if you say finance. Maybe we should start off by explaining what is finance and why are you so obsessed with it?
Okay, that sounds good. And tell you what, I'll try to say finance more. Finance is a subject that many adults are familiar with, but it can be a boring or scary topic for kids. After all, the world of money and investments can be complex and hard to understand. But don't worry, there's actually a lot about finance that you already know. Let's break down what finance is and why it's important in everyday life. First, let's begin by answering what is finance?
Finance is the management of money and other assets. It includes how you save, spend, invest, borrow, and protect your money. Understanding finance helps us make smart decisions with our finances so we can reach our goals. This could mean saving up to buy a new bike, a toy you want, or making sure you have enough money to pay for college tuition. No matter what your financial goals are, understanding finance will help you reach them.
That makes sense. So why are you so interested in finance then?
Good question. Let's face it, money makes the world go round, and understanding how to manage it is a valuable skill to have. In order to have a place to live, food to eat, clothes to wear, and a way to get around, you must have money. When I was your age, Ava, I grew up without a dad. I had six brothers and sisters and my mom had to work multiple jobs just to pay the bills. We were financially poor and it was hard to see my mom struggle because there was a lack of money.
However, my mom is the best mom in the world, and through these hard times, she taught me the value of hard work, sacrifice, and being kind. You may be listening to this podcast right now and can relate. Maybe you too are being raised by a single parent. Maybe your family doesn't have a lot of money, or maybe you have a lot of money, but you want to help other people and spread more happiness in this world.
That's me. I want to bless the lives of people. And one of the ways I can do that is by helping people to live better financial lives. That is why I love finance because it has the power to create, heal, and bless.
¶ Finance for Kids: Skills and Stability
Hi, my name is Max and I'm six years old and I live in Castle Rock, Colorado. Here's my question. Is finance just for older people? That's a great question, Max. Dad, is finance just for adults though? Why should kids care about finance?
Finance is basically the study of money management. The goal of finance, see I just said it again, is to help people understand how money works so they can make better financial decisions. Knowing how to manage your finances well is really important. A good financial plan will help you to create stability in your life so that you can focus on other things like school or hobbies without worrying about having enough money to cover basic needs like food or rent.
Being aware of how much debt you have, if any, and being able to budget properly will also help keep you from getting into trouble financially as an adult later on down the road.
Let's face it though, money seems like a scary thing to learn about because it requires a lot of math and it seems really complicated.
You're right, it may seem confusing and scary, but if you break it down into smaller parts, it's actually quite straightforward. Let's dive in. Whether you're planning ahead for college tuition or you're trying to figure out how much allowance to get each week, sorry parents. Knowing the basics of finance is really, really important. With some research and practice, anyone can become an expert when it comes to managing their personal finances, even kids.
¶ Types of Finance and Long-Term Success
There are two types of finance, personal finance and corporate finance. Personal finance involves managing your own money. budgeting, saving up for things you want or need, making smart investments, and avoiding debt like credit cards. Corporate finance involves managing money in a business setting. For example, figuring out how to get more money for a new project, or determining how to increase the amount of money the business is making.
This is all great, Dad, but why is finance so important?
Managing your finances properly can be crucial to achieving long term success. Because right now you're a kid, but one day you're gonna grow up and you're gonna be an adult and you wanna be successful in the future and you don't wanna have to worry about money. If you have a good handle on your personal finances now, like budgeting and saving, then you're laying the groundwork for future financial stability and security down the road. Who doesn't want that, right?
Knowing how to manage money wisely can also help you to achieve other goals, such as buying a house or starting a new business. So if you're six years old and you're listening to this, you need to start thinking about buying a house because when you're eight, you're gonna have to get out on your own and buy a house. No, I'm just kidding. But seriously.
Your days are gonna go by really quick. So whether you're five, 10, 12, 15, whatever age you are right now listening to this, One day you're going to get older and you're going to need to have the money we've been talking about in order to do the things that you want to do in life. And having that freedom is great. I'll tell you, freedom with money and having security, feeling safe because you have enough money to live is a really powerful thing, kids.
And if you choose to work in corporate finance, then knowing about money management can help you make important decisions that could potentially benefit an entire organization. And the more you know about money, the chances are the more money you will make and have in life as well. Finance can seem complicated at first. I know.
But don't worry, with some practice and research, anyone can become an expert. Understanding how money works is important for reaching both short-term and long-term goals. With this podcast as a starting point, there's no limit to what you can learn about money.
Well now I'm really excited to learn more about money and I hope you feel the same way. Think how cool it would be if your friends knew more about finance as well. Imagine how much better your sleepovers, recesses, playdates, or school lunch conversations would be if you could speak the language of money.
Oh, okay, maybe not talking about finance on the playground, but it's still a really cool thing to know. So tell your friends about the show and help spread the word about finance with kids. See you next time.
Thanks for joining us for the show. If you want to be a part of this podcast, ask your parents to help you record your question on a voice recording app and then email us at hello at financewithkids.com.
Be sure to include your first name, age, and the city where you live. Oh yeah, if you like this show, please leave us a review and share it with your friends. See you next time.
🎵 Music