Big Rocks and Small Dollars: Teaching Others What Really Matters with Money

0:00 The topics and opinions expressed in the following show are solely those of the hosts and their guests and not those of W FOURCY Radio. It's employees are affiliates. We make no recommendations or endorsements for radio show programs, services, or products mentioned on air or on our web. No liability explicitor implies shall be extended to W FOURCY Radio or it's employees are affiliates. Any questions or comments should be directed to those show hosts. Thank you for choosing W FOURCY Radio. Welcome to to Ask Good Questions Podcasts, broadcasting live every Wednesday, six pm Eastern Time on W four CY Radio at w four cy dot com. This week and every week, we will reach for a higher purpose in money and life, as well as a focus on health and wellment. Now, let's join your host, Anita bell Anderson, as together we start with Asking Good Questions.

1:02 Welcome to the Ask Good Questions Podcast. I am your host, Bonita Bell Anderson, and I am looking forward to this episode because we're going to do something a little bit different. We're going to have some object lessons. We're going to try to teach something that people can take home and share with families. And so I have a young guest with me today and I'd like to invite him to the podcast stage right now. Hello. His name is Skyler Fleming and he's a certified he's a financial planner and a candidate for the CFP certification. How far are you on that? Are you getting close to taking the test for that?

1:43 Yeah, I've taken in past the test. I have about six or eight months of experience hours left. So that's awesome. That's a great designation to have. So his mission is to help young adults like himself understand personal finance and his goal is to help everyone see that financial planning doesn't have to be complicated and only for the wealthy. So he has been hosting Money Talk for over four years now. That's great, Skyler, and two hundred plus episodes is great. He realized the opportunity that other young adults and young professionals have with their most valuable asset, which is time, because time is something you just don't get back. But most of the time people are bombarded by terrible advice and predatory salespeople and too much misinformation and too much doctor Google is just terrible.

2:44 So this led him to launch financial planning for you adults and become a financial planner that he felt like, you know what, people would be able to relate. So he's living these strategies in real time with his own finances seen firsthand what works for young professionals and navigating student loans and four one ks and maybe the biggest thing, the temptation of lifestyle creep. So he speaks the language of his generation because he is part of it. His superpower is making financial planning feel less like homework and more like a conversation with a trusted friend who generally wants to see you win. Is there anything else you want to add to that?

3:31 No, that was really cool and fantastic intro and everything I've been doing. But yeah, just excited to help people realize that this doesn't have to be a big complicated mess. And like as many of you know, I am, I'm still in Hawaii. I'm actually in Hawaii still until May. We're doing a service mission for our church here. And Skuyler, didn't you say you're in Twin Falls, Idaho. Yep, that's exactly where I am. Yeah, So I'm always amazed at the technol I'm out in the middle of the Pacific Ocean and this is great. So I'm gonna first we're going to like set the stage on this because we're going to talk about how to maybe ingrain in ourselves a little bit better some of these concepts, but then also how to share them with with your family. And so when you think about financial legacy, Skyler, you know, what do you hope your kids and grandkids? By the way, do you have any kids yet?

4:33 Nope? Nope, My wife and I have no kids. So this is this is something we thought about before though, like how do we pass on how we we were taught and how do we pass it on? Yeah? Yeah, what are you thinking? What do you think about? How how do you hope your your kids or grandkids are going to remember about how you handled money? Yeah, our real big goal is making sure there's not a sense of entitlement, right, That's everyone's worry. As you start doing better with your fine nance, as you figure out how to handle your own money, and the hardest thing is saying here's money to help you. Like, I want to help you. I want to make sure you're living a good life, but I don't want to extend it so far that you feel like you don't have to still work. So for my wife and I, it's really been identifying some of those key moments that taught us about money, like paying our own way through school while it was a big expense, making it our own expense helped us realize that, hey, maybe it didn't need to be the most expensive college out there. It could be a more affordable state school or going to somewhere where I have a scholarship. So it's just planting in those little seeds is really what we're looking to do of say, hey, here's what helped us learn how to manage money. Let's keep that have it going.

5:38 Yeah, and that's going to be so valuable it's killing kid you not. So what do you wish grandparents and parents talk more about with their kids. Yeah, I really wish that like my parents or my grandparents maybe talked about how they were handling money, especially when there was something that like as a kid, we noticed that maybe we needed to get a new furnace or something, maybe we needed to get a new tires. Just talking through like, hey, here's how this impacts us financially. And I've even had one person on my podcast talk about giving kids a piece of your budget right over the summer. They get to manage the snack's budget. Every time you guys out to the grocery store or to the gas station or whatever, right, they get one hundred dollars that last them the whole summer or whatever the number might be. That way, they have some ownership and saying, hey, if you spend it all right away, it's gone, right, the budget's gone. And a little bit so I just I wish that there'd have been a little bit more of an element of saying, hey, here's one tiny aspect of our financial life, and here's how it's being impacted by these different things, because it can be it's overwhelming to adults right to take the entire picture and actually understand it. So for a kid, just take those little small pieces. I think that would have been extremely helpful for me.

6:52 Well, why do you think families avoid money conversations? What's the biggest thing that comes to mind. I think it's because parents are worried there doing it right, like they're already they're already struggling enough. Yeah, I mean, yeah, it's totally possible. Maybe you really aren't sure what you're doing. But I even think teaching some pieces of it, whether it's saying, hey, we don't always fill up our gas tank because right now we're living on a very tight budget and we don't have the money to just make sure everything's topped off all the time. So I think little conversations like that can plant seeds to say, oh, well, that's really interesting. Maybe there's there's times where you can't afford everything you want, and then sometimes you notice that your parents did fill the gas tank full, so maybe there was a bonus at work or something.

7:35 Right. I think just having those little conversations can be super helpful, whether you're doing everything right or not right. Well, you know, because one of the motivations way back in the background for me doing my podcast is the mistakes I made in my life and how that impacted when I became a financial advisor twenty five years ago. And what do you think about grandparents using their life stories, you know, wins and mistakes too. Yeah, that you know what, I think that that can be valuable. Yeah, that's the perfect thing to tell people about. Right. That's why I host my podcast, money Talk. That's why I've had that going for over four years, is to take my experience, and the guests on the show is experience and say, hey, here's how this situation played out for us. Let's talk about both sides of the equation.

8:25 What did we do right? What do we do wrong? Because being able to share those mistakes helps people avoid them in the future. Right, Like, if you're as a parent or a grandparent, you say, I took out way too many student loans, I highly recommend avoiding that because they were this big giant weight and stress coming out of college and getting my first job. Sharing those mistakes is going to just again plant those seeds. That's going to allow the future generations to avoid that same mistake, or at least maybe not make it in such a big way. They may just be able to stop before they get into a ton of credit card debt because you told them that you spent twenty years trying to get out of credit card debt because you were never had a system around it or whatever, So they can stop at one thousand dollars instead of twenty five thousand dollars of credit card debt.

9:10 Well, when I started my podcast, the very first question I was asked was what do you want to call it? And I've known for a long time. What I would if I ever did a podcast, what I would call it would be asked good questions, because all of the financial mistakes that I made in my life were because I did not ask good questions or I didn't think about what's the worst thing that could happen. So yeah, you know, it's just something that I think this can be beneficial for a lot of people. So we're going to do something that I hope can land a little bit differently for people. We're going to use object lesson.

9:51 We're going to like show you some ideas, and we're going to unpack what it means to number one, pay yourself for We're going to go through each one of these one by one. We're going to talk about how to turn a four to one K match into free money and how to think about that, and we're going to talk about why putting the big rocks in your life first changes everything. People may have heard about the big rocks story before, but you know, if there's some out there you know it's not it doesn't hurt to hear it again. So my goal today is that people will walk away with practical conversations and stories and hands on ideas that they can use with their kids, grandkids, whatever, and you know, do it this week. So so the way we'll do this is, I'm going to ask you a couple of questions. We'll kind of set it up, and then we'll do the object lesson. We'll show the little props and stuff. So number one is pay yourself first.

11:00 How you explain that, Skyler to a teenager or a young adult who's just getting their first job or their allowance. Yeah, I think the way you explain it is going to be with this object lesson. I think that's such a good way that it sticks. But you just teach them to say, hey, all of this money isn't necessarily exactly what you're going to have to spend. You're going to have responsibilities, you're going to have requirements, things that you have to pay, and your money will be so much easier to manage if you commit yourself to making sure your bills are taken care of and making sure your savings or paying yourself first is taking care of. And then once you can whittle that down, you put yourself in such an easier spot to be able to spend money. Because that's what we want to do. Right, we want to enjoy life. We want to be able to go hang out with friends. I think that would be a huge one for teenagers, especially as they have money now to pay for movie tickets, They have money now to go out to eat. So saying you can spend that money however you'd like, as long as you make sure the other things are taken care of first.

12:03 It gives you a more realistic boundary to keep yourself within instead of that lifestyle creep like you mentioned in the very introduction. If you're using all of your money to enjoy life, right, it's just going to keep ballooning and ballooning. But you have to make sure you take care of those requirements and responsibilities very first. I'll never forget the day I don't know, it's been probably ten years ago and somebody that's about sixty years old comes into my office and they look like a deer in the headlights because they've never really saved. And it's like and by then it's like what we talked about.

12:45 The very first thing we mentioned was time, and that's the thing that you can't get back. And so if I can just pound this in to use the if you're young and you have the time and you can make this work. So what would you say would be some age appropriate percentages or dollar amounts that a young person might set aside for savings versus spending. Yeah, the fifty to thirty twenty budget is a very popular one where you have, oh man, I'm trying to pull from my memory here, just blanked on what it means. But like fifty percent goes to need, I believe, yes, there, thank you, yes, and then thirty percent to want in twenty percent savings. So twenty percent is such a great place to start at because if you can maintain a twenty percent savings rate your entire life, your golden You're good. Yeah, Like that's all you need to do. So if you make sure that that twenty percent is always there, you're going to be just fine in life. And you can make sure the rest is set aside for your your needs and everything like that, and then that wants spend it however you want. So that that parameter and just that baseline rule of thumb budget out there is a really great place to get started because the numbers are nice and round and even it's easy to understand, maybe not always so easy to remember. Off the top of your head. But it is easy to just allocate it evenly and just let it take care of itself.

14:12 Right, Well, how would how would you encourage a grandparent or a parent to encourage saving without making kids feel like, oh, you never let me have any fun? Yeah, I think it would be. It would be letting them have fun with that money that they have. Right, And that's where budgeting becomes so difficult for people is they feel like they're restricting themselves from all sides. But if you can make sure that things are taking care of that need to be taken care of, do whatever you want to with the remaining money, it does not matter. Like as a financial planner, if you're taking that want bucket or that envelope or whatever you're using and spending it on whatever you want, go for it. Like if you have that twenty percent savings rate and you're fine, who cares? Like, let them have fun with that money that is left to have fun and say, go have fun with your friends, go to the water park, go to the movies, whatever it might be. Let them actually do it a couple of times. Yeah, I have money to have fun.

15:09 Right on the other end of the scale. This is something I've set up years ago. I've been I've also been a scuba diver for many, many years, and so I started a savings account that was just for scuba diving. So when a trip came up, then that's where I you know, I finally went, wow, this is kind of an expensive trip, but I had the savings account. So I mean that's the whole principle, is that you have you have something set aside that you can use for whatever it is that you want to do. Yeah, that's exactly what my wife and I did to go to Hawaii. Actually is we just had a savings account that was there for years and that trip was expensive, like and we did it on purpose because we wanted to enjoy every aspect of it. It was that let's have fun with the money that's there to have fun with type of trip. So yeah, as you're just setting money aside, actually use it for what you want to use it for.

15:57 Yeah. Yeah, So final thing before we do the object lesson, what do you think are some common misconceptions young adults have about saving. I think that it's deprivation, like that it's a deprivation or a restriction, right, I think people think that saving money is the end and you're not going to be able to do anything else with it. But you're saving money for some goal, whether if you're if you're not saving money for a goal, then you need to figure out what that goal is, because that's where it can be really challenging. If you're just saving money for the sake of saving money, then you're going to feel like you're not getting anywhere. You're going to feel like you're just depriving yourself of enjoying the money. But if you're saving money for getting a pet, or saving money to get a car, or saving money for retirement, right, there's going to be some element of yeah, I want to enjoy my retirement. I want to enjoy that new car I'm going to go buy. And it gives you that just enough to hang on to to keep saving and let it just sit there and do its thing.

16:54 Right. So, all right, so we're going to do this object lesson with some jars. So we'll maximize Skyler's screen so that we can do that. Now, so let's go ahead, paying yourself for Skyler. Yes, so I brought these jars as a size comparison, right for the fifty to thirty twenty. That's what I thought of when I saw these different sized jars. So getting some sort of envelope and just writing fifty to thirty twenty can be a great way to do it as well. But if you maybe have the size some size objects to say, yeah, look, how this one's a bigger portion of your income as you fill it up or you put the money in it from their paycheck and you divide it up evenly. I think using sized objects could be helpful here because you're going to be able to say, yeah, this is a bigger portion your your needs are going to be the majority the responsibility taking care of groceries, whatever might fall into this jar, it's going to be the big one. And then you can have your your savings at twenty percent and your wants that your savings at twenty percent and your wants at thirty percent. You can save this money just goes in the cupboard and it stays away and a high held savings account, right or whatever it may be. And then you say this one. You can do whatever you want with carry this one in your pocket. If it's an it'll probably be better if it's an envelope, right, because you don't want to carry a giant jar or money around, but an envelope saying this one carry with you at all times and spend out of this one once it's empty. That's that's it. But you can spend this one on whatever you want, knowing that this one is sitting in the background, ready to take care of

18:26 your bills as they show up, your automatic bills, your electricity, things like that, and then you know this one's hidden away earning a high rate of interest whatever it may be for your future, whether it's invested for your retirement or earning a high held savings account type rate for whatever it may be, that vacation you want to take car, all those things we've mentioned so far. But I think using sized objects to get started could be helpful because then you can visualize it a little bit more. But using envelopes is a great way to divvy up the money and say, carry this one with you. It is whatever you want to spend it on type of money. So if if someone had done this with from their very first paycheck on, how might a financial life look like like twenty years down the road.

19:12 Yeah, it's going to be this little one that your savings is going to end up being your big one. That's what's going to be fun about it is it's just going to sit there and grow. And I'm excited to talk about the four oh one k here in a little bit because I ran some good numbers about how compound interest works. And I think that's going to be such a great thing to teach your children or grandchildren about. Is just exactly what this tiny little jar that doesn't look that big, that's just hidden away, can actually do. So that's going to be the big thing, is that compound interest on the money that you just keep regularly saving. It's going to be massive. So if you're a grandparent, you could ask your grandkids. Let me see if you can come up with a question too, Skyler, Like you could ask your child or your grandchild, if you earn fifty dollars this week, how much would you want future you to get or how much would you put in that savings that twenty percent savings account? And so you could get them thinking about what does it really mean? Right? How would you say that to them, Skyler?

20:12 Yeah, I would. I would probably start teaching something around the rule of seventy two, right, and how money doubles every so many years. Right. You don't need to get into the specifics of interest rates and everything like that, because that might make it a little too foggy to start teaching maybe a younger child or a younger grandchild. But you could use the math of saying, hey, your money, if it's in when it's invested, can double every ten years. So if you take that twenty percent of fifty of ten dollars, say the kid is ten right now, If you take that ten dollars when you're twenty, it'll be twenty dollars, And you just teach them about how that can snowball, because when they're thirty it'll be forty dollars, and when they're forty it'll be eighty dollars and one hundred and sixty and so on, and then you can get their mind wrapped around, Hey, this money's just going to grow on its own as you set it aside and put the money away regularly, and just think, every paycheck you do ten dollars, all of those different ten dollars are all doubling, right, So then you start to think of it's not just ten becoming twenty, it's now after a year, it's what two hundred and sixty becoming five hundred and something, right, it's hard to do public math, but yeah, it's just all continuing to grow.

21:23 Then there, I think there's a tie in for especially for young adults who are starting to you know, maybe they've met that special someone, maybe they're buying a house. Automatic transfers to savings could eventually mean a down payment on a house. Possibly it could mean for one K contributions, it could mean a roth Ira contribution. But I'm just thinking having that might be just a golden opportunity to be able to do something that you really want to do as you're getting started in life. Yeah, that's where the magic comes is that you've been regularly saving. And there's this amazing point of financial independence that I love to teach about called coast financial independence, and it's where you can get your savings up to a point where it'll grow to what you need by time you retire. And my wife and I are getting dangerously close to it because what it would allow us to do is have just unlimited opportunities because we technically no longer have to save for retirement, so we can maybe work part time, we can start a family we're looking to adopt, so we could adopt more kids and be home with them more if we know that, maybe we don't need to make as much money. Right, And I'm just speaking here of the endless opportunity that young adults or your grandchildren are going to have if they can get started early. Like I was working with one client and talking about their three year old and they have some other kids, right, I was running the compound interest to saying, hey, what if you put away one hundred or two hundred dollars away for your kids? And I was comparing them their oldest and where they would be after so many years, and then showed them that

22:55 gap to their youngest, and it was like millions of dollars. More So, the earlier you start, you just give yourself so much opportunity down the road. It's really unreal once you start to realize some of the opportunity. Okay, I think we're done with object number one. That's a little for one. Yeah, And another thing that I might say is that when I'm thinking about all the different mistakes and the different things that when haywire in my life, and I just kept plunking away, right, and because this can all be wonderful, but there's going to be things that are going to come along that are going to sidetrack you. And so I'm just here to say I had a lot of crazy things happen along the way to this point, but here I am able to serve a mission for my church and be in Hawaii for a year and do all this great service.

23:54 And it's been great, you know, being able to do that. But it's that sort of thing, Skyler, that is, if you if you just pay attention to this, it's gonna it's it's you're gonna be surprised how well it'll work out, right, Yeah. It'll change your life for the infinitely better. Like it's crazy, right, So okay, we're gonna go on. Now. I know that Skyler is all excited about talking about four one ks. Nobody would ever think that. But and taxes, let's talk about taxes too. Oh yeah, So. Okay, when you talk with a young adult about their first job, what's the very first thing you want them to understand about a four to one K.

24:39 Yeah, it's it's such a great tool. And this is one of the big challenges I've had to overcome, as like the financial planner for young adults is there's all this misinformation out there on TikTok and you name it about how the four to one k' is a scam or whatever, right, and how they're hiding your money. The didn't just lies. They get made up about this account. This is such a great vehicle, and we're we're going to talk about the company match. But that is the superpower of saving for retirement because if you're doing twenty percent and you're saving that regularly and then your employer adds on another three or six percent, that just gets you to your goal so much faster. And if you're starting earlier and earlier, that number is just going to balloon and continue to grow. But the most important thing that I think people need to understand about their four one k's at their first job is that you it's it's a must, it's a necessary thing to do, especially if it's your first job out of college, you're twenty twenty two, whatever age, your early twenties. That's a gold mine for your future. And that's really that's the key thing.

25:37 Yeah, how would you explain that? I mean, I'm betting that somebody could say, well, I've heard about how about this is free money? I don't get that. How would you explain that? Yeah, there's a couple different aspects of it that are free money. The employer match is considered free money because it's money that your employer is going to give you for doing nothing else other than putting my money into the account. Right, it's part of your salary, is what you really need to consider. Your employer is looking at people who aren't participating in their four O one k's is money in the back into their pocket. Right, you need to make sure to take advantage of it because it's it's part. It's part of your pay compensation. You need to make sure you're taking advantage of it. And the great way that I've seen it laid out there before is say, say your employer went to hand you one hundred dollars bill, and what are you going to do?

26:24 Just turn it down and walk away from it. That's what you're doing if you're leaving the employer match on the table and not taking advantage of it. Is that it's free money. The other way it's free money is just from those like seemingly phantom stock market gains right as it's invested that money is just growing and growing and growing. My four oh one K when I left my last job, half of the money in the account was growth from the stock market and employer match. So you're telling me my money. Essentially my money had doubled, but half of that wasn't even my money. Like, that's so cool. That's what's so exciting about these accounts. Basically money given to you just like here you go, and if. You don't understand, it's parractically magic. Yeah. So could you walk us through a simple compound interest example, right that grandparents could share you know, something about like what happens if someone starts contributing in their twenties versus saying, oh, I'll do it later. Because I've had people do that, say oh I'll do it later, and they don't start until their forties. What would you do?

27:24 Yeah, this one's fun to walk through. So the common, very common like objection here is that I'll make more money when I'm forty and be able to catch up. Right, That's what everyone says, is that my salary will be higher, I'll have a higher income. I guess what, You're also going to have higher expenses in every other aspect of your life. So let's walk through the twenties to forties. So if you're a twenty year old and I'm going to use until age sixty as retirement. So let's say you're a twenty year old who has forty years to grow that amount of money. Let's see, Yeah, that amount of money, it was one thousand dollars a month and or sorry, one hundred dollars a month. One hundred dollars a month at age twenty, and you have forty years for it to grow. Came out to about five hundred and thirty thousand dollars. Okay, But now, as someone who's aged forty, you only have twenty years. Right, you're saying, oh, I'll have more money if you did eight hundred dollars a month, So eight times the amount of money. You barely come out on top with five hundred and forty nine thousand dollars, so you barely have more money.

28:21 Might not be that might not be even reasonable, right. Exactly because you have so many other expenses that are also contributing, and you're barely coming out on top. Now you're not coming out eight times ahead. So the difference here is one hundred and ninety two thousand dollars worth of contributions, So think about where that money could have gone elsewhere. So you, let's see, you have to contribute one hundred ninety two thousand dollars for the forty year old and forty eight thousand dollars for the twenty year old. So I was a little on the wrong number there, But it's one hundred and forty four thousand dollars more of your own money just to barely come out on top. So let's say you flip the script. And let's say if you try to flip the script and say you can save more for retirement when you have more money, instead, you need to say I can enjoy life more when later down the road when I make more money, because you know, like making that little sacrifice now of the one hundred dollars a month is going to come out on top. You can take that other seven hundred dollars a month when you reach age forty and do whatever you want with it, right, Like that's kind of the saying of yeah, like you you have seven hundred more dollars a month that you could go on vacation with and who knows what. But if you had to put it into retirement. It's not going to make that much of a difference. It would sure make a heck of a lot of a bigger difference on buying the car you want, getting the nicer house you want. Right, So it's so key to start early because you're going to come way out on top.

29:44 So I'm going to play devil's advocate here Skyler. So for the young person who says I can't can't afford it, I can't afford a contribute to a four to one K, what are some practical steps trade off? What do you think to make it doable? Yeah, the easier answer, easy answer here that you had just spout off, is you can't afford not to write like that's the of course. But yeah, some actual practical ways that they can figure out other things to do is look at the big items in your life. Those are some of the main areas where you're maybe overspending. Maybe you got a car with an auto loan interest rate that was higher than you realize and that payment's higher.

30:25 Maybe it's time to downgrade to a different car. I'd even be willing to bet like most young adults, you're probably in the best shape of your life. Or that you're going to be. Maybe you could bike. Get a knee bike right, saves so much money in that area. I think people aren't willing to sacrifice. That's the biggest problem with my generation is that we look at these previous generations and maybe they're homes that have increased in equity and stuff, and we just throw a pity party. But I think the thing that we actually need to do is be willing to sacrifice. Whether it's downgrading our car, or maybe it's not going out to eat all the time. Maybe it's doing some meal planning. There's a there's a lot of ways that we can pick up those extra dollars.

31:06 And here's a great one. Say your four oh one k to the amount that you need it to be, and then your lifestyle will adjust. There's a great book called The Automatic Millionaire that talks about your lifestyles. It's like a liquid, right, it's gonna fit the jar, like the jar that you put it in. And so if you put it in, if you give it a smaller amount, your lifestyle is going to fit an adjust and guess what you're going to be just fine, Because no one ever comes back and says, well, let's decrease that four one K amount. I don't like how much I'm saving for retirement. They say, oh, I'm fine, now I can. I can live under this condition, and you're gonna be Okay. People are more resilient than they think they are. Right, So all right, so let's do our let's do our object lesson. So this is I'm gonna start contributing to a four oh one K and get that match, or oh I just can't do it, so go for it, Skyler.

31:57 Yeah, so really it all comes down to that compound interest, right, and the balance is I don't have a ton of things to add in here, but the balance is like, as you're just doing one little thing at a time, Yeah, sure, it won't look like a whole lot in the beginning. So let's say you put it. You put a dollar in the four to one K, or you put a dollar into buying something off the dollar menu. Right, that's still a dollar over here, and that's still a dollar over here. But over time, that dollar is now gone because you're spending it. And as you keep adding more money into the one that's your investment account, the compound interest, right, that money just keeps going up. All the money that you're trying to spend just keeps disappearing. So the key thing there is just to imagine the money growing. So if you're doing this object lesson, have several other dollar bills that you can add to show it doubling. Right, So if you had like forty dollars in one dollar bills, you add one at a time and you say, okay, now, after a few years it's doubled, and then you had to put two on top of it, and now it's at Now it's at two, and then you say it doubled again, you put it at four, and you just watch how quickly that grows once it starts getting upwards, the ten becoming twenty, and twenty becoming forty. Right, that's where the magic's going to be shown. So make sure you have a whole lot that you can pile up quickly because it's going to get big quickly. It'll probably even surprise the person teaching that you're saying, wow, I didn't actually bring enough change to show one hundred turning into two hundred, right, So it's going to grow quickly, and that pile.

33:18 Is going toother There's another way, another way that we could talk about this, and that would be if you're not contributing, then all your money it's gone, right, it's home is gone. But if you're contributing a dollar, and you're contributing a dollar and that's coming out of your paycheck, but then your employer is contributing a dollar, then that's another way to realize. Oh wow. So, like we had talked about before, it's not all coming from you. And like you said, I think it's a good way to think about it, is it's part of your paycheck. Yeah, you can even have some dollar bills aside, showing the employer mad and say, oh, this is coming out from behind a secret curtain. Here's a couple more dollars to throw on pretty much.

34:06 Right. So then imagine that you add in the compound interest layer. So you know, people are all boring, boring, but compound interest is really There's been there's been quotes out there that I've talked about how compound interest is magic, and the money on that plate, the whole thing is going to earn interest and that's compound interest. And so it just and like you were saying, it can become quite substantial from those small beginnings and like my husband, who's a retired pharmacist, he did okay in his savings.

34:46 You know, he had worked forty nine years as a pharmacist. But one thing that he said was, I wish I would have contributed a little bit more. Every time you got a raise, part of it would go. Time you got to raise, part of it would go towards increasing the four one K. But now he's on the other end and he's going, God, I wish I would have Yeah, I need more. But you know, he did okay, And so there would be some questions that a grandparent could. You know, So so grandson comes to grandparents and says, hey, I just got a job. What should that grandparent ask, Yeah, do.

35:30 You have a retirement account available? That's that's a good place to start. Or have you ever heard of a four oh one K? Does your does your job have a four to one K? And if they don't have a four one K, they say, oh, I don't know what that is. Maybe you give them a couple questions they could take to their HR department, because that's going to be who runs this. You could say, hey, well, next time you're back in the office on Monday, when you start, can you ask your manager or ask your HR rep that you go to and say, what retirement options do we have? And they'll likely give that person in a print out or some sort of pamphlet right that shows the different options, and be like, I want you to bring that pamphlet back to me when you come back over for dinner this weekend, and you and I are going to sit down and talk through what these different accounts are. So I think that's been huge for me with my clients there young adults, is giving them the questions to ask their employer if they're unsure about what options are available, because again, it just seems overwhelming and you have a job to figure out how to do, so you don't want to then also detour and ask all these other questions. So it's taking your knowledge and saying, hey, ask these couple things to your work and then bring it back and let's sit down and have a conversation about it. Because no young adult wants to start a conversation with their boss sing do we have a four to oh one? K? I don't know what that is, but do we have one? Right?

36:44 So like, be that liaison a little bit between the benefit and what they have available at work. So we're going to run out of time really fast. It always happens. So let's do the object lesson first. So the last thing, and this is going to wrap up all these ideas we're going to. It's basically it's the story and the object lesson of the big rocks, and it's all about priorities, right, and trade offs. So before we bring we have a little visual for that. But Skylar, can you describe the classic big rocks in a jar analogy. Yeah, So the way it goes is that you have all these small things or sand in your life that maybe aren't the big priorities that you need to take care of. Maybe it's it's things like spending all your money to go out with friends, it's spending all your money on different little activities and whatnot. And if you put those in first, it's going to create this dense layer that you can't really get past. And then you're going to try to suddenly do the big things like saving for a home or saving for retirement, and these bigger rocks or bigger priorities won't all fit because there's that thick layer of smaller things or sand, and you'll see it on the image once we once we pull that up, but really it creates this inability to fill it properly. Yeah, so you'll see on the left there, that's kind of what I'm describing that if you do all the random things with your money that aren't going to amount to much more than just money leaving your account, it's going to create this base that you can't then fill up the big priorities.

38:15 And usually I would add, it's usually not like how it's usually three quarters of that jar, which is basically time in your life, and you can't even get all the big rocks in. Yeah, this person got lucky that they still fit. They probably didn't show some and they didn't fit them all right. Yeah, So basically on the right side, you're saying you do the most important things first and then the pebbles. Yeah. So those big ones are saving for retirement, saving for a home down payment, saving for like for my wife, and I'd saving for an adoption expense. Like that's a big rock that has to go in there first. And then guess what, Suddenly all those little items, when if there's some that don't fit, you realize they're not that important.

39:02 So for us it's all these different Amazon purchases of nice to haves that just don't fit because we have these big rocks taking its place. But the nice thing is is the rest of it will fit nicely around these big rocks, Like you can fit in and spend the rest of your money how you want, but it's going to fit into your lifestyle because you've taken care of the big priorities first. I think you feel better about yourself too. Well, yeah, because it's easy to say, oh, yeah, this little bit won't work because we have this big rock already ready and being worked towards. Right, it's so much easier for us to say, well, that thing in our Amazon car or that latest smart home gadget. That's my real money trap is smart home stuff. But I'm able to say, yeah, that's not an expense we need to spend right now because we're saving for adoption, and it's so much easier to delete it out of the car and never think about it again.

39:49 Right, How do you think? How do you think a family could help Someone is just getting started to identify what a big rock would be. Yeah, I think it's looking back in you using your own stories of mistakes or achievements and stuff, and saying, here were some of the big rocks that came up in my life, Like my wife and I didn't expect to need to adopt to grow our family. But that's something that now when we teach, like our children or grandchildren will say, Hey, there's going to be these big rocks that come up out of nowhere seemingly, and you're still going to have to account for them and adjust and maybe dump out a little bit of the sand so the big rock will fit fit and make some adjustments. Right, it's taking your life stories and identifying the rocks and saying, here's here's my list of rocks that like for your husband, he maybe wished to put the retirement rock in there a little sooner. Maybe it's like poking at the top it didn't quite fit. So identifying those and sharing those stories to bring us back to what we talked about in the beginning is going to be a huge deal. Cool.

40:46 Well, okay, I want to kind of we're almost out of time, Skyler, so let's turn these lessons into actions and some next steps. So if a listener wants to start this week and so I guess we could take that you know, just just keep that thought, put the big rocks in first as we take that that graphic down. So, so Skyler, if a listener wants to start this week, what's one simple conversation or object lesson that they could do with a grandchild or their child. What would that could start? I would do either the compound interest one if they're if it's a kid that has a job, that has a retirement account, right and they need to start saving in it, use that compound interest example to pile up some money for them and say, if you save into this now, it's going to grow into this mound of cash. Right.

41:40 But the other one is if it's if it's a kid or a grandkid that's maybe in their early teens or whatever working their first job. I think the divvying up the paycheck is going to be even more beneficial to that age group because they're going to be able to say, it's if you stick to these percentages the rest of your life, you'll be just fine. So it starting out just kind of meet them where they are and have that conversation of here's your retirement account, here's what it can grow into, or here's your first paycheck, here's how you should think about splitting it up. I think those are both going to be great first conversations. So for young adults that are ready to take in the next step, where would they find you? Yeah, my home is on YouTube and on any podcast player if you search financial planning for young adults. Somehow I got lucky and I'm the only one named that, so that was kind of a stroke of luck there.

42:30 But if you search financial planning for young adults, you'll find me. We're talking about all sorts of different topics like Trump accounts and taxes and all sorts of different things that apply to young adults and their financial picture. Awesome. And the other thing that will be available will be a PDF of our three object lessons, so that you can download that and take a look at that and use it in your family, and information about where to find Skyler Tyler. With that, our time is up, and so I'd like to thank you so much for joining me today. Thank you has a ton of fun. Any final thoughts.

43:12 No, I think I think everyone just needs to realize it's easier to talk about money than you think. So just take that step and start a conversation and it's going to lead you to a whole lot of better places than just ignoring it. Yep. So with that, make sure that you take some steps this week to implement what we've talked about today. And thank you so much for joining us on the Ask Good Questions Podcast. We'll see you next time. Today's episode is over. But we did ask Good Questions again, didn't We don't miss out as we broadcast live every Wednesday, six pm Eastern Time on W four CY Radio at w four cy dot com. Joined Banina Bell Anderson next week for more conversations with experts on fine finances, retirement, behavioral finance issues, health and wellness.

44:04 And more. Until then, remember to ask good questions.