CASH KID

We gotta pay taxes, what!?! Many kids are shocked to learn just how much is taken out of that first paycheck. In this episode, we break down the basics of what are taxes, why we pay them, and what's with all those "W" forms. Oh, and who is Uncle Sam? Let's talk taxes in this episode of the Cash Kid Podcast. Learn more about your ad choices. Visit megaphone.fm/adchoices

There are only two certains in life…. death and taxes. - Said everyone as I’m told it’s a pretty old joke. 

What are taxes, who pays them, why are there so many W forms involved, and why do we pay taxes? 

Oh, and who is Uncle Sam?

Well, you’re about to find out in this episode of the Cash Kid Podcast. The Cash Kid Podcast is underway!

Intro tease:

So you’ve got some cash. Maybe from an allowance, or that money your grandma gave you for your 7th birthday. Here you go, sweetie. Thanks, Grandma.

Whatever it is, what are you going to do with it? Spend it, hide it away… or maybe invest it? Let’s start learning how to make that money grow.

Time to learn how to be a cash kid.

Okay. So let's talk about taxes. I hear this topic causes a lot of anxiety in adults. I'm hoping we can educate my generation about it earlier to have a better understanding of it and maybe develop less anxiety. 

Joining us today is Joe Proffitt with Dark Horse CPAs. Mr. Proffitt, welcome to the show.

Joe Proffitt:

Hey, great to be here, Cash Kid. I very much appreciate the time. And I agree if we can start talking about taxes younger, maybe I wouldn't have freaked out about them when I got to be an adult as well.

Cash Kid:

Yeah. So welcome. And first off, just tell us a little bit about yourself.

Joe Proffitt:

Sure. I'm a CPA based out of Little Rock, Arkansas. I work with clients all over the country, from small business owners to individuals that don't necessarily own a business but need help with their tax planning and filing. And the main thing for people to do what I do. Basically, the U.S. tax system is complicated and sometimes you need a little bit of help and things get to be more than you can handle on your own.

Cash Kid:

Yeah. So what does Dark Horse CPAs do for its clients?

Joe Proffitt:

Great question. So Dark Horse specializes in serving small business owners. Specifically, we provide tax and accounting services ranging from basic bookkeeping to what we refer to as CFO engagements. We essentially help business owners compile their financial information and put it into a format that allows them to know where they're at financially to help them with projections as needed, or on the side of the tax work we do, compliance work with the basic business tax filings or just essentially try to help make sense of the really complicated tax structure we have here in the U.S..

Cash Kid:

All right. Let's talk about taxes, Mr. Proffitt. We’ll, start simple. What is the basic reason why we pay taxes?

Joe Proffitt:

Great question again. So taxes provide money to the government so that they can provide services for we the people. In an ideal world, taxes provide a range of services, whether it be assistance for individuals needing a little bit more help provides money for constructed roadways. Essentially, taxes are the way the government gets money from its citizens so that it can continue to function as the government.

Cash Kid:

What all do we pay taxes on?

Joe Proffitt:

Pretty much anything that you're going to spend any time you spend money or receive money, you're probably going to be subject to some sort of tax. So you get sales tax on groceries, cars. You have various tax for major purchases like a home purchase, you pay property taxes, or when you do own various pieces of personal property. So the major categories of taxes across the U.S. are going to be your income tax, your property taxes and your sales are what we refer to as excise taxes.

And the sales and excise is based on things that you actually go out to purchase and are based on the usage that way.

Cash Kid:

In episode one of of season 2, a financial teacher at a local high school stated a lot of his students were shocked when they got their first pay check to see how much they paid in taxes, leaving them with a lot less than what they thought they would take home. Can we break down the different taxes in what we pay for and why we pay them from our paycheck?

Joe Proffitt:

Absolutely. And I remember it hurt my feelings the first paycheck I got and when I was a kid, seeing how much they hold out. And so when you receive any anyone that goes out and works for an employer and receives a paycheck, they're going to have your federal income tax withholding, state where it actually occurs depending on where you live.

And then you're going to have additional taxes that we refer to as FICA. And what FICA is, that’s FICA, is the Social Security and Medicare tax withholdings. Now, the federal and state can vary, but FICA  is based on set percentages and it goes into the Social Security system and the larger Medicare system. It essentially helps provide Social Security income and Medicare coverage for the elderly and people that are in that retirement phase.

Cash Kid:

Ok, we pay taxes buying everyday things and in our paychecks. So why do we have to file our taxes every year in April?

Joe Proffitt:

I ask myself that same question all the time. Now with if you have a straightforward tax situation, say you receive a W-2, you just work one job, you receive a W-2, then a lot of the time, the way tax withholding works, it's an estimate of what your actual tax is going to be for the year because we we don't all pay a flat tax based on the income that we have.

So throughout the year, the withholdings from our checks for the income tax piece is a guess at what our year in income is going to be and what tax bracket we go in. Basically, the more income you make in the U.S., the higher your tax rate as the income level goes up. So we file tax returns at the end of the year to confirm exactly what our taxable income was for the year, to take advantage of any tax credits that are on there to report any income that wasn't otherwise reported, say, if you're self-employed or if you're operating, say, a lawn mowing business, if you're wanting to make some extra money on there. And that's where we get to either true up to pay in what we owe additionally to the IRS or request a refund if we overpaid throughout the year. The point at which we get even with the IRS or the state that we're filing in.

Cash Kid:

And maybe Mr. Proffitt just if you can explain quickly, what's a W-2?

Joe Proffitt:

Right. Gotcha. And just to clarify, a W-2 is a year in tax form that goes out by the end of January every year for anyone that receives a paycheck from an employer. So if you go and work in part time job or if you're a full time employee of a company, you're going to receive a W-2. So anyone that receives a regular paycheck with tax withholdings, you'll receive a W-2 at year end, and that's what you use to file your taxes.

Cash Kid:

Yeah. So are there tax benefits that teens and college students can take advantage of that will allow us to get a bigger refund?

Joe Proffitt:

That is a really good question. So with teen college students there, if they are providing their primary support, there are various educational tax credits, two specific ones to pay attention to are the American Opportunity Tax Credit and the lifetime learner tax credit, and whether they apply for those on their individual return, if they file and support themselves or if they're still being supported by their parents and listed as a dependent, they're that's a great resource for those people as well, whether, again, whether they're still on their parent's taxes or if they're independent and filing on their own.

For teenagers, the the majority of the time, the best thing for teens is to just make sure that you have sufficient withholding. The standard deduction when you're a dependent is lower than if you're an adult earning the same wages. But most of the time, what I see with kids that are working part time jobs, you'll usually have good withholding that you end up getting a refund.

So honestly, the best thing to do is just make sure that you fill out. Actually, we need to take a step back for a moment. Whenever you first go to work for an employer, you're going to fill out a form. A W-4, and I know I'm talking about a lot of W forms is something that whenever you go to work for an employer, they're going to hand this to you and expect you to know how to fill it out.

And what it tells them is how much to withhold on your taxes. And for the vast majority of teens that are out there working a job, you're going to want to put single and zero on this W-4 form because that makes sure that you have the most held out of your check that you can and really that's the main trick to it is just making sure that you have sufficient withholding.

Cash Kid:

Do tax laws and regulations change a lot, making it harder for the everyday person to keep up with the rules?

Joe Proffitt:

So year after year we'll have a few minor changes here and there. And every so often we have a major overhaul of the tax system. There was one that occurred back in the 1980s, well before, well before your time, but there was an additional big tax law change back in 2017. Most of the time it's pretty business as usual other than specific changes with various different tax pieces.

And that's where people like me come in because my career is based on staying up to date on any tax law changes. And that's why that's why the accounting profession exist in the first place, at least from public to to help people keep up with tax law changes and make sure they're taking advantage of everything that is allowed to them.

Cash Kid:

What advice do you give your clients when dealing with taxes?

Joe Proffitt:

Preparedness, Proactive planning is the best. Is one of the best resources that you have. Just finding an accountant that you feel comfortable communicating with and having an issue that I see often working for various clients is that they come through. We file their tax return, but there's not very much we can do once we're outside of the year.

So honestly, just proactive planning during the year is one of the best, best benefits that or the best advantage that anyone can take when it comes to tax compliance. Making sure that you don't pay more than you actually are required to pay in your taxes.

Cash Kid:

Yeah. I don’t want to pay more than required for sure. 

Is there anything we haven't asked you that you would like to share with our audience?

Joe Proffitt:

Something to bear in mind whenever  for your audience. I mean, anyone listening here is going to have a more entrepreneurial spirit, and I admire that very much, especially at such a young age. I will say that there is a difference in going to work the way you're paid, in the way you pay taxes when you receive a paycheck, meaning that you'll get a W-2 at the end of the year, your taxes are withheld from your check during the year.

Now, if you go out and are operating as an independent business, basically like a like a small business owner would where you're not receiving a paycheck, then you may have to make tax payments throughout the year on your own. And if you get to that point, then definitely you'll want to either reach out to your parent or guardian, someone that's at least got access to the resources that you'll need or potentially even reach out to an accountant just in order to get a little bit of additional information.

Because there's one one specific tax when you're self-employed, it's called self-employment tax. And it can be a big, nasty surprise for people when you go from receiving a paycheck to working for yourself. And so that would just be one of the main pieces, I would say, for anyone that's wanting to strike out to business on their own.

Yeah, I'm sure.

Cash Kid:

I was going to say is an example like let's say a kid runs a lawn mowing business. Would they need to keep like a book of their expenses and jobs?

Joe Proffitt:

So you'll need to keep track of the income that you're receiving from your various customers. And you'll also, especially want to keep track of any expenses that you have. So we're talking gas purchases, any additional equipment that you buy, any repairs that you have to pay for, because these are the things that reduce what your taxable income is.

If, let's say, a child or a you know, let's call it business owner, call it what it is, they make $10,000 in a year and that's their gross revenue, what they received from their customers. You'll want to have a listing of all of those expenses that you paid. Otherwise you're going to end up paying tax on the full amount of that 10,000 that you made, even though that's not the money that you kept, You had $3,000 in expenses.

So really, you should only pay tax on $7,000 and great resources are out there for keeping track of your expenses. To start off with a smaller business like that, I recommend spreadsheets. Whether you're you prefer Excel, Google Docs, whatever your preferred spreadsheet platform, it will just make life much easier for you. And when it comes to expenses, you want to list who you paid, when you paid them, what it was for and how much it was.

And that's the kind of information that you'll send to your account accountant a year end, and then they can put together your business filing.

Cash Kid:

Mr. Joe Proffitt, we appreciate your time and your expertise. Thank you for joining us on the Cash Kid Podcast and advancing the financial knowledge of the kids everywhere.

Joe Proffitt:

Absolutely has been a great pleasure and let me know any time you want me to come back.

(music)

Now back to the question on who is Uncle Sam? Have you heard this before? Uncle Sam looks like an older man with white hair and beard, in a top hat, pointing at you. Just Google it Cash Kids. It’s a personification of the United States of America or more specifically, the internal revenue service IRS.

During the War of 1812, the United States Army received supplies from a variety of organizations and individuals, one of which was Samuel Wilson, a meat packer from Troy, New York. He labeled his barrels of beef with “U.S.” to indicate U.S. government property, but soldiers referred to the “U.S.” as Uncle Sam.

So when you hear someone say, “Uncle Sam is gonna get you eventually.” They very well could be talking about tax season, and how the government or “Uncle Sam” will get those tax dollars from you one way or another.

Cash Kids, we have more terms, discussions, and skills to learn. Thank you for tuning in to this episode. If you have a question, please, reach out to me at [email protected] and I’ll answer it in a future episode. You can also reach out via our website at cashkidpodcast.com. 

Follow us on Instagram and wherever you are listening, leave a review! We need your help reaching a larger audience and building the financial skills of the next generation.

Cash Kid, out!

Disclaimer:

The information presented represents the views and opinions of the guests. This show does not intend to provide personal investment advice through this podcast. This content has been made for informational and educational purposes only. To make a full and informed investment decision, we advise you to speak with a financial advisor and for kids, definitely your parents first before investing.

Got some cash for Christmas and wondering how to spend it. We've got seven ideas on how to stretch that money, make it grow, and set yourself up for a better financial future in this special edition episode of the Cash Kid Podcast. Happy Holidays! Learn more about your ad choices. Visit megaphone.fm/adchoices

Cash Kid Christmas Script

What’s up Cash Kids?  

Maybe where you are it’s snowing outside, or maybe it’s 85 degrees and sunny…  But wherever you are, I bet there are holiday decorations nearby and you and your family and friends are getting ready for overeating and celebrations!

Here at the Cash Kid Podcast we are wrapping up a great year and getting ready for a well deserved holiday break…

After all “it’s the most wonderful time of the year,” right?

But I’m here to tell you today why it’s the “Most wonderful time of the year to make some good financial decisions.” Ideas on what to do with that Christmas cash, coming up.

INTRO

Welcome back to the Cash Kid Podcast special episode edition. This is our first episode that’s also in video format. Listen where you like, but you can catch the full video episode on your YouTube page. Just search Cash Kid Podcast.

So, like I said, it’s the most wonderful time of the year to make some good financial decisions.  Don’t believe me…  Just listen up as we revisit some important topics from other 2023 Cash Kid Podcast episodes.

Idea number 1: Treat yourself… but don’t blow it

If you get cash for Christmas, take time to consider your options and don’t blow it all right away.  Sure, it’s ok to spend some of it - treat yourself.  Be sure to go back and listen to episode 7 titled “Needs, Loves, Likes, Wants” for a refresh on spending that cash wisely.

Idea number 2: Take advantage of sales

There are plenty of deals before Christmas… but after Christmas is a great time to snag the things you've been eyeing on sale. Whether it's a new pair of shoes, a fancy kitchen gadget, or the latest tech toy, there are plenty of deals to be had. One tip for finding the best prices is to search multiple sites. Don't just settle for the first deal you come across. Check out different retailers and compare prices to make sure you're getting the best possible discount.

Idea number 3: Coupon Codes

Another way to save even more money is to use promo codes. These codes can often be found with a quick Google search. Simply type in the name of the retailer you're shopping with and "promo code" to see if there are any discounts available. Sometimes you'll find a code for free shipping, a percentage off your purchase, or even a free gift with your purchase. It's a small extra step that can make a big difference in your overall savings.

Idea number 4: Open a savings account

If you haven’t opened a savings account yet, consider now a great time to do it. Some offer up to 5% in interest a month. 

Let’s listen to a clip from the checking versus savings episode. 

 Cash Kid: At what age can someone open a savings account?

Amy Greer: So the good news is parents can open one for you at any age. You can open one at birth and they can start contributing to it and grandparents can start contributing to it for the for a child individually to open one on their own. It actually goes in accordance with state laws and federal laws. That is typically around 18.

Cash Kid: What would be a reason to start a savings account as a kid?

Amy Greer: Well, there's so many reasons to choose from for that. Like I mentioned earlier, it can help you learn responsibility by setting aside some percentage of all the money that you make. If you just start the habit of moving some of that into your savings every time you get money, whether it's paid for a service you provided or paid for a good you made or an allowance, just set aside some of that in a savings.

And there's also many big, big future events that you can start saving for and help your parents out like cars and college and maybe one day weddings.

Many things that you can start saving for in the future. It's never too early to start saving.

Idea number 5: Invest it!

There are several different ways kids today can start investing. I use an app called Greenlight to purchase stocks I want. Take some of that cash and make a commitment to watch it grow this coming year. 

Here’s an example. A year ago, I purchased a stock in Apple, Amazon, and Tesla. These are companies I spent time researching and felt would bring me a return on my investment. Well, check it out a year later. Amazon is up 81%. These stocks have all grown and so has my money. So check out an app like Greenlight. We definitely plan to discuss more options like this for kids in future episodes so stay tuned.

Idea number 6: Give Back

Think of a way you can spend some of that cash to do something for someone else. The saying it’s more blessed to give than receive comes with great benefits to you and the recipient. Maybe it’s to your church, a local charity, a dog shelter. There are so many options. Take a little and think of how to bless someone else.

Idea number 7: Set Financial Goals

As we approach the end of the year, it's natural to begin reflecting on the past 12 months and start thinking about what we want to achieve in the coming year. It's important to make our goals realistic and achievable, while also challenging ourselves.To help us stay on track, we can create a budget and track our progress towards our goals. 

We can also seek out resources and tools to help us learn more about personal finance and make informed decisions about our money. Like continuing to listen to the Cash Kid podcast.

But maybe set a goal to find a way to make some extra cash. Invest in learning a new skill that you can then turn into a small side hustle for yourself. Maybe teens can set a goal to save up for that first car or college. These are just some ideas to get your brains rolling but the possibilities are practically endless.

By assessing our current situation, setting realistic goals, and tracking our progress, we can make meaningful changes in our financial lives. So as we look ahead to the new year, let's consider making financial resolutions and taking steps towards a brighter financial future.

Before we end the last episode of 2023, I want to take a moment to thank you all for being part of the Cash Kid Podcast this year. 

Look for a new episode of Cash Kid on January 15, 2024.

Happy Holidays

Cash Kid Out!!!

What's up with cryptocurrency? Do you know enough about this new-age digital currency that never rests? Find out more about why my generation needs to understand this financial concept in part 2 of "What is Cryptocurrency?" on the Cash Kid podcast! Learn more about your ad choices. Visit megaphone.fm/adchoices

“I really wish I would have started investing in the stock market at your age and learning the stock market, because I didn't start learning about it until I was just graduated from college.”

Welcome back to episode 9 season 2 of the Cash Kid Podcast. Whether you're listening from Amazon Music, Apple Podcasts, Spotify, the cashkidpodcast website or wherever you like to listen from, we’re glad you are here! 

Today, we are jumping right back into part 2 of our discussion on Cryptocurrency. If you haven’t already, be sure and listen to part 1 first. 

There is so much confusion and unknown on this topic, we decided to split it into two episodes. Did you know that cryptocurrency trading is open 24/7 365 days a year? The market never closes! What’s the future of cryptocurrency? What is Bitcoin? And what should my generation know about investing in this new-age currency? Those answers and more coming up. The Cash Kid Podcast is underway!

Intro tease:

So you’ve got some cash. Maybe from an allowance, or that money your grandma gave you for your 7th birthday. Here you go, sweetie. Thanks, Grandma.

Whatever it is, what are you going to do with it? Spend it, hide it away… or maybe invest it? Let’s start learning how to make that money grow.

Time to learn how to be a cash kid.

Joining us again today is Mr. Grant Newell who is an entrepreneur and a financial professional. He is the co-founder and CEO of Abundant X Inc, Amana X royalties and Abundant X Investments, LLC.

As the CEO of AbundantX, Grant Newell has been at the forefront of optimizing accounting efficiencies, devising cutting-edge tax strategies, exploring innovative investing, and promoting financial education.

Let’s jump back into our discussion from the previous episode.

The Cash Kid

Okay, so where do you see cryptocurrency going in the future?

Grant Newall 

So the government has actually already started creating their own digital currency. And so what I think will happen in the future with cryptocurrency, especially because each country has seen how successful Bitcoin and Ethereum have been in the market. And usually how it works is the government's want to get in on the action. They don't want to they don't want to miss out. And so my thoughts on it is that the governments will come in, and each country will have their own cryptocurrency. Kind of like how, you know, each country has their own physical currency, currently, and I think we'll end up venturing into that it'll be a little bit easier to transact with our own currencies. And as a result, I think it will have some downward effect on the larger currencies currently. Unless the government comes in and says, Hey, we're we're going to join with Bitcoin or join with Ethereum in which could happen as well. They can adopt those cryptocurrencies as their main currency for the country. So there's kind of two options, I think the governments have figured out that, that it's not going away that cryptocurrency is going to be a thing moving forward. And it's just going to be about whether they want to create their own or they want to adopt one of the mainstream ones as you know, their form of currency for the country.

The Cash Kid

So now a lot of people hear the term Bitcoin a lot, but what exactly is Bitcoin?

Grant Newall

So it is one form of cryptocurrency that, like I kind of explained to earlier, it's decentralized. So it is not regulated by anybody. There is no one authority that rules over it. It is all on the blockchain, which is just kind of a fancy way of if you think of Legos, they stack on top of each other and they get stronger and stronger as If you build on top of them, and once you plug in a Lego on top of another one, it locks it in. And that's what bitcoin does is every time somebody trades, buys a Bitcoin and sells a Bitcoin, it creates a new block. And they just stack on top of each other, since there's no central authority for it.

The Cash Kid 

Are there other cryptos besides Bitcoin?

Grant Newall

Yes, yeah, so there's lots and lots of cryptocurrencies. You know it for some people, they'll try and find the next Bitcoin or next Ethereum. I try and stay away from that. It's, it's a little bit of a guessing game at that point. So I try and stick to investing in the main two, which is Ethereum and Bitcoin, just because trying to guess the winner is really difficult. And you'll lose more than you win in that game. So I try and trade the charts for the large ones and stay away from, you know, all the little ones that anybody can make.

The Cash Kid 

Yeah, so what are you investing in? Exactly? When you invest in a Bitcoin or type of currency? Like, what are you trying to look for in that company?

Grant Newall 

Um, so when it comes to currencies, I'm really, you know, it's different from the stock market, because in the stock market, you're investing in a company and the products that they make, and the way that they run their business, you're investing in those sorts of things, when it comes to currencies, you're really investing in the worth of that currency against anything else. And so with Bitcoin and Ethereum, I strictly look at charts, and where it's at on the four-hour and daily charts. And then if it's at a low area, I'll buy if it's at a high area, I'll sell. And, you know, some of it also has to do with news as well, some people like Elon Musk, if he says he's buying Bitcoin, it's really it's usually going to go up. If he says he's selling it, it's usually going to go down. So keeping an eye out on the news, and what main people are saying, and then paying attention to the charts, because like I was saying, it's a little bit different than the stock market. So you can't really base it off of the actual coin, themselves. You're basing it off of the value on the charts.

The Cash Kid 

Yeah, I can remember a friend or an adult telling me this. But there was a soccer player and he was supposed to, ah, after the game, he is supposed to represent Pepsi. And he goes, no drink water. And after that, everybody thought that since he was a really famous soccer player, everybody thought that the company wasn't going to do well. And so they started selling, and then everything just started going down. They eventually regained. But that just kind of reminded me when we talked about how news affects things, and you can definitely do stuff like that. So, um, what do you feel my generation needs to know about cryptocurrency and how it's going to affect our financial investing options.

Grant Newall 

So I think the best thing that your generation can do is just keep an eye on the news like you were saying and continue to learn charts. But I think the biggest thing that, you know, your generation can learn is, you know, from an early early age, learning charts, and why they move the way they do. Because if you can put those two together, investing really becomes a game of patience, waiting for certain things to get to certain places. And then those moves that happen, you'll catch them. And so for you guys, I really wish I would have started investing in the stock market at your age and learning the stock market, because I didn't start learning about it until I was just graduated from college. So I'm definitely excited that you are learning about this so early on, and you will have a tremendous, tremendous advantage later on in life. Because the great part about trading is every year, every month, every week, you become better at trading and investing. And so the extra years that you guys get to have in learning about this so early is going to be such an incredible advantage that you'll have later on in life that you guys are really going to be thankful for.

The Cash Kid 

So, Mr. Newell, we appreciate your time and expertise. Thank you for joining us on the Cash Kid Podcast in boosting the financial knowledge of fellow cash kids everywhere.

Grant Newall 

Thank you for having me.

Wow, I learned so much from Grant. It’s great to have experts like him to help us understand terms like this. 

Cash Kids, we have more terms, discussions, and skills to learn. Thank you for tuning in to this episode. If you have a question, please, reach out to me at [email protected] and I’ll answer it in a future episode. You can also reach out via our website at cashkidpodcast.com. 

Follow us on Instagram and wherever you are listening, leave a review! We need your help reaching a larger audience and building the financial skills of the next generation.

Cash Kid, out!

Disclaimer:

The information presented represents the views and opinions of the guests. This show does not intend to provide personal investment advice through this podcast. This content has been made for informational and educational purposes only. To make a full and informed investment decision, we advise you to speak with a financial advisor and for kids, definitely your parents first before investing.

What is cryptocurrency? Most are baffled on this topic. But I feel my generation certainly needs to understand this new-age currency and what it means for our investing future. So, join us in this interview with a cryptocurrency expert to break it down in a two-part episode series. The Cash Kid Podcast is underway! Learn more about your ad choices. Visit megaphone.fm/adchoices

SPEAKERS

Grant Newall, The Cash Kid

Welcome back to episode 8 season 2 of the Cash Kid Podcast. Whether you're listening from Amazon Music, Apple Podcasts, Spotify, the Cash Kid Podcast website, or wherever you like to listen from, we’re glad you are here! 

Our focus this season continues to be on building super financial literacy skills, and today, we have a special guest who is going to break down a term that… well…I’ve found most people don’t want to discuss because they don’t really know or understand much about it. It’s known as cryptocurrency. Listen up and learn more in today’s episode. The Cash Kid Podcast is underway! 

Intro tease:

So you’ve got some cash. Maybe from an allowance, or that money your grandma gave you for your 7th birthday. Here you go, sweetie. Thanks, Grandma.

Whatever it is, what are you going to do with it? Spend it, hide it away… or maybe invest it? Let’s start learning how to make that money grow.

Time to learn how to be a cash kid.

Joining us today is Mr. Grant Newell who is an entrepreneur and a financial professional. He is the co founder and CEO of Abundant X Inc, Amana X royalties and Abundant X Investments, LLC. 

First off, we'd like to welcome him to the show.

Grant Newall 

Thank you for having me. I want to, first of all, commend you for your tremendous success and for having this podcast for even teaching kids and helping kids understand the nuances and things of finance because it's definitely needed in this world.

The Cash Kid

Yeah, definitely. I agree. So, um, first off, how about you tell us a little bit about yourself?

Grant Newall 

Yeah, so I started with finance very young like yourself. I started by bartering at garage sales. And it grew from there. I always wanted to be an entrepreneur, and build businesses. And it started from a young age, I was mowing lawns, and doing construction work for my neighbor's, gosh, probably since the age of like, 10 years old. And so I learned how to advertise. I learned how to work hard. And most of all, I learned how to manage finance. Then from there, I went and played college football at Oklahoma State. And once my football career was over, I had no idea what I was going to do with my life. And so I found myself being a lifeguard at the local pool. And I had tore my shoulder playing football. And when I got done, I had to have it repaired. And in doing so, I couldn't be a lifeguard, I couldn't really save people's lives while I had a, an arm in a sling. So that led me to a company called the Joseph group. And the owner of it was a Harvard MBA, he graduated with honors and was incredible with finances, and he took me under his wings, and taught me the nuances in the finance business. And so from there, it's grown into today having a tax and accounting firm, along with an investment firm that we do trading and investments with.

The Cash Kid

So um, let's jump right into it. What is the basic definition of cryptocurrency?

Grant Newall

So cryptocurrency is basically decentralized finance. And what that means is it is finance that's not controlled by one person. And really, the easiest way to understand it is when you look at $1, the $1 Bill $5 Bill, whatever. And you're holding that in your hand. T hat currency there is controlled by the US government and the central bank. With cryptocurrency, there is nobody that rules over the cryptocurrency. It's all in the blockchain. And so it creates a path for people to have finances that aren't regulated that aren't controlled by one single government or authority.

The Cash Kid 

So why did this need arise for cryptocurrency?

Grant Newall 

Well, a lot of it arose when you know, you go to these other countries and for us, we have US dollars. And some of these countries, they wouldn't accept the US dollar , because when they take in that dollar, they then have to go to their bank, and they have to give it to their bank, their bank has to convert it into their currency that they have in their country. And then they can use it. 

So there's this long process. And so the need arose for there to be a currency that would go across the world, no matter where you're at, no matter where you live, one Bitcoin or one ethereum is worth that. You don't have to convert it into anything else.

The Cash Kid 

So what do you think confuses people most about when understanding the value or even the idea of cryptocurrency?

Grant Newall 

I think probably the confusion comes to not knowing what it exactly is and really how to use it. And that's part of the the hardest part about it is that it's done all online. There's no you can't go buy or you can't go get a physical Bitcoin or any cryptocurrency, you can't get them physically. So I think for a lot of people, it's difficult to understand because they can't actually touch it and actually feel it in their hands.

The Cash Kid 

So how do people purchase cryptocurrency or buy a Bitcoin or something like that?

Grant Newall

Yeah, so really, the main ways to do it are through certain apps. The main ones would be coin base, crypto.com is another one. Binance.com is another one. There's a couple of mainstream ones, but there's lots of different ways that you can buy them. And they're usually through apps. And what you would do is you would download that app, you'd create a profile, you have to enter in you know, your social security, your name, birthdate, all of that sort of stuff, they run a couple of checks on you verify your personal info, and then you're able to deposit money into that account. 

So you deposit your own money into there, and then you're able to buy bitcoins or ethereum or any other cryptocurrency that you choose.

The Cash Kid

Are there different types of cryptocurrencies?

Grant Newall

Yes, so that's the another thing about cryptocurrency is basically, anybody can create their own cryptocurrency if they wanted to. Now how much value goes on that cryptocurrency is up to the market. And there are, I would say, two main ones that most people would know and are invested in, and that is Bitcoin and ethereum.

The Cash Kid 

I think a lot of us have probably heard of Bitcoin and ethereum. So is it safe to invest in cryptocurrency?

Grant Newall

So that's a, that's a good question. It's, I wouldn't necessarily say any sort of investing is safe. But with cryptocurrency, one thing that people have to be careful of is that it is an industry that is unregulated. And what unregulated means is that the government doesn't come in and say, “Hey, we want to make sure that there's no scammers. There's no people getting hurt with this, there's no there's no ill intentions with these currencies.” And so you have to be careful because the government can come in and shut certain things down. I was a victim of this early on in my investing career, I had invested in something called Bitconnect, which is a form of lending for cryptocurrency. And the government came in and shut it down. And so all of my money was gone. Now, do I think that's going to happen with Bitcoin and ethereum? No. But there's still the unknown of what different governments our government are going to do when it comes to cryptocurrencies. So there is some unknown, and you can make a lot of money and lose a lot of money with unknowns. So I wouldn't necessarily say it's safe. But if you're worried about losing all of your money, Bitcoin and ethereum is what I would stick to.

Thanks Grant. We’re going to stop our discussion there for today. But join us next week for part 2 of our discussion on cryptocurrency with Grant where we talk about the future of cryptocurrency and why you should consider it an investment option. 

Cash Kids, we have more terms, discussions, and skills to learn. Thank you for tuning in to this episode. If you have a question, please, reach out to me at [email protected] and I’ll answer it in a future episode. You can also reach out via our website at cashkidpodcast.com. 

Follow us on Instagram and wherever you are listening, leave a review! We need your help reaching a larger audience and building the financial skills of the next generation.

Cash Kid, out!

Disclaimer:

The information presented represents the views and opinions of the guests. This show does not intend to provide personal investment advice through this podcast. This content has been made for informational and educational purposes only. To make a full and informed investment decision, we advise you to speak with a financial advisor and for kids, definitely your parents first before investing.

Should financial education be a graduation requirement? One organization is working to spread access to greater financial education for all students. Find out what they are doing, what age can kids start learning the stock market, and what opportunities await those who learn to invest early. Those topics and more are in this episode of the Cash Kid Podcast! Learn more about your ad choices. Visit megaphone.fm/adchoices

SPEAKERS

The Cash Kid, Wanda McAbee

Welcome back to episode 7 season 2 of the Cash Kid Podcast. Whether your listening from Amazon Music, Apple Podcasts, Spotify, the cashkidpodcast website or wherever you like to listen from, we’re glad you are here! 

Our focus this season continues to be on building super financial literacy skills, and today, we have a special guest who works every day to do that for kids across the entire state of Alabama. There are organizations across the US who are seeking funding and fighting for legislative measures to be taken to make financial education an educational requirement because of the impact it can have on our economy. 

You don’t want to miss out on what she has to say. The Cash Kid Podcast is underway!

Intro tease:

So you’ve got some cash. Maybe from an allowance, or that money your grandma gave you for your 7th birthday. Here you go, sweetie. Thanks, Grandma.

Whatever it is, what are you going to do with it? Spend it, hide it away… or maybe invest it? Let’s start learning how to make that money grow.

Time to learn how to be a cash kid.

Who is advocating for us kids to have access to better financial education at a younger age?

How can real world events impact our investments and why should we understand that?

At what age can kids start learning about the stock market?

Joining me today is Mrs. Wanda McAbee who is the Executive Director of the Alabama Council on Economic Education.

Mrs. McAbee is a little like me. She was introduced to the stock market game which we discussed in season 1 episode 8. This game ignited her passion to have more financial education provided for not just her students but the entire state of Alabama. And that’s what she works to do now. Advocate for more financial education programs and requirements to set students up for greater financial success.

The Cash Kid 

Welcome. And first off, tell us a little bit about yourself.

Wanda McAbee

Well, first of all, thank you so much for this invitation. I think I want to start by saying that I love learning, okay? I've loved learning my whole life. I spent over 47 years as a either a classroom teacher or an administrator in public schools in Alabama. And now it is my distinct honor to continue serving the area of education. As Executive Director of the Alabama Council on Economic Education. My journey began in stock market game being used in my classroom. It just sort of ignited a passion in me. So I'm just excited to continue this learning process.

The Cash Kid 

So, what does the Alabama Council on Economic Education do?

Wanda McAbee

Okay, well, we are a nonprofit organization. And our purpose and mission is to provide economic and financial education in Alabama, by providing professional development and curriculum resources to teachers throughout the state, at no cost to them. And then through this work that we do with teachers, we have the opportunity to impact students. So that's our mission, working with teachers to help them equip their students to have a better financial future and an understanding of the decision-making process to become good informed  citizens in our society.

The Cash Kid 

Why was an organization like this formed? And how does it help support schools?

Wanda McAbee

Okay, so this organization was founded in 1969. And we're very thankful for the group of individuals that saw a need in the state of Alabama to have another way that students and teachers could be impacted. We keep up with our data on a two year timeframe. And so over the past two years, we've impacted over 179,000 students, and we have had an involvement with teachers or students in over 70%, of the school systems in Alabama. So our goal is to make it 100%. We want every school system, public and private involved. 

The Cash Kid 

So what impact do you feel these programs have had on school systems in our state?

Wanda McAbee 

We are continuing to offer a variety of programs. I mentioned that we do professional development for teachers. A lot of teachers who are like me, when I first started stock market game, I had no investment background. In fact, if you said the word economics, I probably would roll my eyes and say, Oh, how boring is that? I don't want to do that. But stock market game. As a teacher, I became totally engaged. And I realized that I had missed out on 15 years of compound interest. Oh my gosh. So I learned that myself. And so through that impact on me personally, it gave me this passion to continue to do this with the council. So the teachers that I work with when you're asked about the impact, they generally even today, tell me the same thing because they don't have the background coming up in schools that gave them and equipped them with this investment, education, knowledge and financial education knowledge. So so that's our goal. We want to reach out to all those teachers and help them help their students be more successful.

The Cash Kid

Yeah, so how important is financial literacy and learning economic skills?

Wanda McAbee 

So we could talk about that for a long, long time. How important is it? Well, in terms of life skills, stock market game, I know this is how you became involved in it. But stock market game is the perfect example of finding a way to help students see the real world connections. So on your portfolio, when you're playing stock market game, and a stock goes up or down, sometimes, you know, you've done research about that stock. But a lot of times, it doesn't matter how much research you've done, what's going on in world events will cause it to go up or down, whether there's a famine, or whether there's a pandemic, or whether there's a war, or whether there's a presidential election. And so we see those real world connections. So it's very important that students gain the knowledge and are equipped with the skills to look at situations to make decisions, to see those real world connections, because that is what's going to impact them in their future as adults and present being productive members of society. So we think that that's, that's one of the biggest reasons is just, it helps not just in the financial future, but just learning how to make those informed decision making skills. Economics is life. When you stop and you think about the decisions that you make, everything that you make, comes back to economics, it comes back to scarcity. Scarcity is the driving force for everything. We can't have everything we want, we have to make decisions. And we have to learn how to make informed decisions. That knowledge is power. So programs like stock market game, and we have several other programs that we offer, throughout the state. Those are designed to help students learn to see decisions, make decisions, make informed decisions, and see how that impacts their life.

The Cash Kid  

Yeah. So do you feel there's been a rise in demand for education like this, and why?

Wanda McAbee 

In 2014, in Alabama, there was a push for making a financial education course, a required part of the graduation in the state of Alabama. At that time, in 2014, only five states required a graduation course in financial education to be part of the curriculum, only five states. Now, I just looked up these numbers today, there are 30 states that now have that as a graduation requirement. And I think that shows the importance that people are now seeing throughout the state and through advocacy groups and seeing that it's just it helps better everyone, when we have that kind of knowledge. 

The Cash Kid

Yeah. So can you tell us about any initiatives that you are working on or goals of the Alabama Council on Economic Education?

Wanda McAbee

Ah, yes, ah, we continue to have goals to implement all of our programs. In addition to stock market game, we offer InvestWrite , which is an essay competition, that's part of stock market game that's optional for students to participate in. We love academic competitions. We think that we're competitive society, and its students get more involved when there's a competition. And we give really good prizes, too. But we also offer the Economics Challenge, and the National Personal Finance Challenge for students in grades six through 12. And those are online competitions, everything we do is at no cost to the teachers or the students. So we have these two online competitions, where students form teams, and they take online test, and the top teams at the high school level, are invited to a state championship. Those state champions then represent Alabama at the national competition. And I'm very pleased to report that at a national competition this past year, we had a second place in the nation from Alabama, in the personal finance challenge. So, we're really excited about that. And then we have another competition Rockonomix. And in Rockonomix, students take a song that they like, and they rewrite the lyrics, and do their own video. And the lyrics have to do with economics and personal finance. And we have some really, really cute, clever things that our students have submitted. And that's for grades four through 12. So we know that there are a lot of different ways that our students in Alabama can show their abilities and can show how smart they are, and how creative they are. 

The Cash Kid

Is there anything we haven't asked you that you would like to share with our audience?

Wanda McAbee

Um, well, one thing I do just want to point out, it's never too early. Okay. Because I get this question asked several times from teachers. They'll say, Oh, well, ninth grade, sometimes our ninth graders that concept might be too hard or whatever. And I have a different view of that. I think it is never too early to start learning about financial education than the national standards for learning about stocks. The benchmark is at fourth grade, okay. It's never too early, we have programs that we offer for our elementary teachers that help them weave financial education into their curriculum starting in kindergarten. So it's never too early. We, that's something I really want to emphasize. And if we have teachers, or parents or anyone that's listening to this podcast, we just encourage you to reach out to us, you can go to our website, econ alabama.org. And we have many, many resources, and we have ways that we can connect you.  But I would just say, I want to just emphasize again, how important it is to make this a requirement in the home and in the schools, and keep this emphasis going and your efforts. let me commend you, your efforts. And what you're doing is helping to get this message across, and ultimately will help to empower your peers to have a more successful financial future.So congratulations to you!

Thank you Mrs. McAbee for all you are doing to fight for our generation’s financial sucess.

This episode was a little longer than most but whether you are a fellow cash kid, parent, teacher, educator, or grandparent listening, I felt it worthy to hear it’s never too early. If there’s not enough education options in your schools, get involved and seek to have more added. 

Cash Kids, we have more terms, discussions, and skills to learn. Thank you for tuning in to this episode. If you have a question, please, reach out to me at [email protected] and I’ll answer it in a future episode. You can also reach out via our website at cashkidpodcast.com. 

Follow us on Instagram and wherever you are listening, leave a review! We need your help reaching a larger audience and building the financial skills of the next generation.

Cash Kid, out!

Disclaimer:

The information presented represents the views and opinions of the guests. This show does not intend to provide personal investment advice through this podcast. This content has been made for informational and educational purposes only. To make a full and informed investment decision, we advise you to speak with a financial advisor and for kids, definitely your parents first before investing.

To learn more visit Alabama Council on Economic Education:

https://www.econalabama.org/

A loan is free money, right? This week we dive into learning three more financial terms we "Cash Kids" need to learn to further our super financial skills. Loan, debt, and interest. How are they all tied together? How much debt are Americans in? Plus, a Cash Kid blooper to laugh about. That and more coming up in this episode of the Cash Kid Podcast. Learn more about your ad choices. Visit megaphone.fm/adchoices

That’s Warren Buffett during a conference in 2009, stating there’s even a problem with this generation when it comes to financial literacy terms. It’s my goal, that’s not said about my generation!

So, welcome back Cash Kid Podcast listeners! You’re listening to episode 6 already of season 2 where we are focused on building super financial literacy skills this season.

What about debt and interest rates? 

And how much debt are Americans in? 

You’ll find out.

Stay tuned. The Cash Kid Podcast is underway.

Intro tease:

So you’ve got some cash. Maybe from an allowance, or that money your grandma gave you for your 7th birthday. Here you go, sweetie. Thanks, Grandma.

Whatever it is, what are you going to do with it? Spend it, hide it away… or maybe invest it? Let’s start learning how to make that money grow.

Time to learn how to be a cash kid.

Listen, let’s be honest. When kids ask their parents for money and they give it to us…. In the back of our minds, we have no intentions of paying that money back, right? I mean. We used it. And for the majority of our lives up until we start making our own money, this is how it works.

But in the real world, when someone loans you money… they definitely, definitely, expect you to pay them back. This brings us to our first term this episode. What is a loan? (ding)

A loan is basically an amount of money that a bank or lender has allowed you to borrow for a certain amount of time and pay back with interest. 

One example is a mortgage. This is the type of loan your parents probably have to pay for your house. Most mortgages are set at a 30 year loan. So say you purchase a house and take out a loan (mortgage) and have 30 years to pay a certain amount each month to pay back the bank that loaned you the money to buy the house.  

When you take out a loan, you incur what our next financial term is called… debt.

Debt is money that you owe to either a person or a business. 

Here are some stats. 

American households carry a total of $17.1 trillion in debt as of the second quarter of 2023, and the average household debt is $101,915 as of the end of 2022.

Rising debt can mean less economic opportunities, plus slows economic growth.

Now, in the mortgage example, your parents owe the bank a certain amount every month for the next 30 years.

So let’s say you also need a car. So, you take out an auto loan. Auto loans are usually set around 5 years. It’s the same principle. You now have a new loan and more debt basically. You have more money you owe back to a financial institution over a period of time.

Last episode, we talked about your credit score and what things can affect your credit score. The amount of loans you have open and the amount of debt you have, can impact your credit score.

Now, if you make your loan payments each month on time, then you are being financially smart and paying down your debt. But if you don’t, you can incur additional fees and your interest rates could go up, thus increasing your debt.

I think it’s clear which direction you want to be headed in, right? So, is a loan free money? Nope. Those days of just taking your parents cash and never giving it back were fun, but the real world is knocking… and they want that cash back.

(music)

Now, how does someone get a loan? Well, you  have to show you have good credit which we discussed in previous episodes. You have to show you are responsible financially so the banks will in good faith trust you to pay the money back.

How many of you have had a friend or sibling borrow some money, and in the back of your mind… you knew… that money is gone?

Lenders will look at your past financial history, your credit record and see if you are eligible to be offered a loan based on your habits and behaviors financially. They won’t think of you as a friend though and just let it go… this is business, they want to feel confident you can repay. Which means they’ll also want to know how much money you make. They want to see that you don’t have five credit cards, two car loans, a mortgage, and now need another loan but don’t make enough to even pay off those other, there’s that word again, debts. 

So, be aware. Taking out a loan needs to have a purpose in mind… and a game plan to pay it back to eliminate your debt.

And let’s just touch on interest here for a minute. With any loan, not only is it not free money, it’s money borrowed with a fee attached. See, when you borrow money, you are charged a specific interest rate (like a fee) for the bank allowing you to borrow that money in the first place. So let’s say you have a $1,000 dollar loan and you have ten months to pay it back. The loan agreement states you must pay a balance of $100 each month plus 5% interest. That means you’ll pay $102.31 cents each month. By the time you pay it off, you will have paid the $1,000 back….plus…. an extra $23.06 in interest. I could calculate bigger numbers… but they scare even me!

So, loan, debt, and interest. They’re all tied together you see. Our goal here with the Cash Kid Podcast is to be aware of these terms early in life so we can make smart informed financial decisions to keep us out of bad debt, and paying more in the long run.

Cash Kids, we have more terms, discussions, and skills to learn. Thank you for tuning in to this episode. If you have a question, please, reach out to me at [email protected] and I’ll answer it in a future episode. You can also reach out via our website at cashkidpodcast.com. 

Follow us on Instagram and wherever you are listening, leave a review! We need your help reaching a larger audience and building the financial skills of the next generation.

Cash Kid, out!

Disclaimer:

The information presented represents the views and opinions of the guests. This show does not intend to provide personal investment advice through this podcast. This content has been made for informational and educational purposes only. To make a full and informed investment decision, we advise you to speak with a financial advisor and for kids, definitely your parents first before investing.

What’s a credit score? Do you know? When do you get one and how is it calculated? And why does your score even matter? Well, turns out, it does. Find out those answers in more in season 2 episode 5 of the Cash Kid Podcast. Learn more about your ad choices. Visit megaphone.fm/adchoices

What’s a Credit Score?

Welcome back to another episode of the Cash Kid Podcast. Whether you're listening from Amazon Music, Apple Podcasts, Spotify, the Cash Kid Podcast website, or wherever you like to listen from, we’re glad you are here! 

This is episode 5 of season 2 where each week we dive into different financial terms we need to know to become cash kids. This week, what is a credit score? Do you have a credit score? If so, how is it calculated? What’s a good score? And can you just ask people what their score is? Those answers and more coming up. Plus, another book review this week. The Cash Kid Podcast is underway! 

Intro tease:

So you’ve got some cash. Maybe from an allowance, or that money your grandma gave you for your 7th birthday. Here you go, sweetie. Thanks, Grandma.

Whatever it is, what are you going to do with it? Spend it, hide it away… or maybe invest it? Let’s start learning how to make that money grow.

Time to learn how to be a cash kid.

Last week we discussed the difference between debit and credit. We stated that credit is money that’s borrowed from a lender in return that you agree to pay it back, usually with interest. But how well you pay it back, how often, and how much credit you have all can feed into your credit score.

Now, for kids my age, we don’t have credit scores yet. But, let’s compare it to an adult’s grade point average or GPA. At my age, we worry about our GPA by the grades we get in school. It’s based on how well we perform in our classes. A credit score is kind of similar.

A credit score is a prediction of your credit behavior. Like, how likely are you to actually pay back a loan on time. Let’s say you turn 18 and open a simple credit card with a $5,000 limit. If you spend it all but then forget to pay it back, or at least make the minimum payment each month… guess what… your credit score will take a hit and start to go down.

Credit scores range from 300 to 850. 

I tried figuring out why “these” numbers. I mean why not start at zero? But I haven’t found a clear answer yet. 

So, just remember the score ranges from 300 to 850. The higher the number the better. A score below 700 is considered “fair” credit… we’ll equate that to getting a “C” average. Anything around 700 to 800 is good,... say an A-B average and over 800 is considered exceptional or A+. 

In 2022, the average FICO Score in the U.S. reached 714. There are actually several sites where you can check your credit score at any time.

But how can you achieve those higher numbers? Many times this is a mystery to most. I’ve learned most adults don’t even know what their score is. And why does it even matter what your score is? We’ll discuss this more coming up, after this book review from my Mom.

(music)

This week we are spotlighting an activity book. The title is “Investing for Kids Activity Book” by Justine Nelson. It has over 65 activities about savings, investing, and growing your money that kids can easily work through to get a concept of how money works and how they can work to make it. Each workbook activity takes less than 5 minutes. The book can be found on sites like Amazon and Wal-Mart for less than ten dollars. Stocking stuffer for sure that will pay dividends! 

(music)

Thanks Mom! Alright. So, why does your credit score matter? It matters because companies use your credit score to decide on whether to offer you money to borrow to make purchases like a house, or a car. 

Like our $5,000 dollar credit card example earlier where he forgot to pay it back or make payments on time. Say that same person went to try and buy a car and needs a loan to do it, which would be another line of credit. The car dealership will look at his credit score and say, “Hey, your score isn’t great because you show as being behind in paying back your debt.” So, no car for you!

There are actually several factors that impact your credit score. Here are some. Your bill-paying history is one. Like in our example, how well do you pay your bills?

Another factor is how much current unpaid debt you have. So how many lines of credit do you have open and how much do you still owe on each of those?

Also, the number and type of loan accounts you have. We’ll just say most adults have a car loan and a mortage (your house payment). If you have those two but you pay the balances each month, on time, then this type of practice can increase your score.

Another factor is how much of your available credit are you using. So if you have a $5,000 dollar credit card and it’s maxed out that month but you pay it back within the month, that can help your score. But if you don’t, and let’s say you have three cards all maxed out… that isn’t going to help.

Trust me… we could go on and on about the ins and outs of a credit score. At this age, the moral of the story is this. Building credit is good. It’s a way to show you are financially responsible. But getting lines of credit with the intention of not having the income to pay it back and pay it off, well, that’s gonna affect your score… it’s the same as not listening in class and studying and it affects your GPA.

And one more thing to touch on about how having a lower score can hurt you. See, when you open a line of credit, you are given an interest rate. This is basically a fee you pay for borrowing the money. The higher your credit score the lower the interest rate, which means the less amount you will be charged by the lender as a fee for borrowing money. But the lower your score, well the higher the interest rate. Here’s a quick example.

 Let’s say you have a good score and get a nice low-interest rate of 5% on a $5,000 loan that you need to pay back within 5 years. You’ll pay a total of $661 in interest.

But if you have bad credit then on the same $5,000 loan let’s say you are given a 10% interest rate and you’ll pay $1,347 in interest. See the difference? 

Same loan amount, but because you are trusted less, you get charged more. Build trust, build a better score… it matters.

And I asked the question, can you ask someone what their credit score is? 

Dad: “No, that’s not something people do.” 

Was the answer I was given. So, it’s mostly between you and the lenders. So don’t go around asking people their scores. But, discuss this with your parents and have an open conversation about how you want help to build a good score one day. Listening to The Cash Kid Podcast, we can guarantee will help.

Cash Kids, we have more terms, discussions, and skills to learn. Thank you for tuning in to this episode. If you have a question, please, reach out to me at [email protected] and I’ll answer it in a future episode. You can also reach out via our website at cashkidpodcast.com. 

Follow us on Instagram and wherever you are listening, leave a review! We need your help reaching a larger audience and building the financial skills of the next generation.

Cash Kid, out!

Disclaimer:

The information presented represents the views and opinions of the guests. This show does not intend to provide personal investment advice through this podcast. This content has been made for informational and educational purposes only. To make a full and informed investment decision, we advise you to speak with a financial advisor and for kids, definitely your parents first before investing.

Debit versus credit. What's the difference? How fast is credit card use growing? How can it get you in trouble, fast? And what are banks doing to prepare for our generation's needs in how we want to handle money or forms of it? Answers to those questions and more coming up in season 2 episode 4 of the Cash Kid Podcast. Learn more about your ad choices. Visit megaphone.fm/adchoices

Debit vs Credit

Hey Cash Kids! Ready to test your financial literacy skills even further today? We are in season 2, episode 4 of the Cash Kid Podcast where we are working to build super financial skills. If you haven’t already, go back and listen to past episodes as each one builds on the next. 

Today, debit vs. credit. Do you really know the difference between them? How fast is credit card use growing? Can it get you in trouble? And what are banks doing to meet our generation's financial needs? Those answers and more are coming up! The Cash Kid Podcast is underway.

Intro tease:

So you’ve got some cash. Maybe from an allowance, or that money your grandma gave you for your 7th birthday. Here you go, sweetie. Thanks, Grandma.

Whatever it is, what are you going to do with it? Spend it, hide it away… or maybe invest it? Let’s start learning how to make that money grow.

Time to learn how to be a cash kid.

Joining me again today is Mrs. Amy Greer with Cadence Bank. 

She is the Director of Digital Transformation where she works to make sure customers have a great experience online or in banks apps, including all types of money movement that we will talk about today.

Thank you, Mrs. Greer, for joining us on the show again. Let’s get into it.

Cash Kid: So what is your definition for debit?

Amy Greer: Well, a debit card is actually a tool that's connected to a checking account that allows you to use that at various places, such as stores and any merchants is what they are called that accept card payments, which is pretty much everywhere nowadays. But it is a way to to pay for for goods or services, and it comes directly out of your checking account.

So you have to have the funds in the account in order for it to process. It's not money that you're borrowing, and so it's not credit, which I know we'll talk about in a little bit, but it's actually linking to the cash that you have sitting in your checking account. And so it's just a quick and easy way to pay for things.

And it also helps guarantee that you have proof of purchase and kind of like a digital receipt. And because then you can go back and look and see what you spent where in the super helpful in that way.

Cash Kid: So to clarify, debit is cash you actually have in your checking account. Right. 

Amy Greer: That's right. It's your money in your account. And debit is just the tool that you use to get to to pull the money out, to pay a person.

Cash Kid: How did people pay for things before debit cards from their checking account?

Amy Greer: So lots of checks. Lots of lots of recording checks in the check register, like I mentioned. So people would pay with checks and cash was a lot of cash. And there's been a huge decrease in just the amount of cash that the government even makes now, paper cash. Because of because of the digital currency and things that are taking over.

Cash Kid: What brought about the need for debit?

Amy Greer: The need for debit, I think, really began out as just the fact that cash was getting harder to keep up with. Checks were people were trying to be more environmentally friendly and not write as much paper. And so this concept of the debit system, that electronic money movement kind of was birthed. And it's really again, it's back to it gets money places faster and safer and there's a trail for you to track it.

Cash Kid: How do people mostly use debit as a form of payment?

Amy Greer: Most people use debit as a form of payment at what we call point of sale, which that means you're at a store or another name you'll you'll learn over the years as a merchant. And so really, as you as you are buying something in the gas station or you're buying something, you know, at a concession stand or at an event, that's the point of sale purchase is when you tap your card or insert your card or swipe your debit card.  There's all different options these days. That's where most of the transactions occur. It's not as readily available to use your debit card to pay another individual. That's where some of the digital forms of payment come in, where you can send money digitally to different accounts like Venmo and things that we've talked about.

(music transition)

Cash Kid: All right. Let's switch to credit. I feel probably, most people hear this term more than debit. What is your definition of credit?

Amy Greer: So credit in the simplest sense is really an account that's established. But it is borrowed money from the bank. It's a borrowed line of credit. It is basically the bank or the the card provider saying to you. You have shown me that you can do a good job with responsibility financially. So I'm approving you to have $5,000.

Let's just say as an example, you can use it all at once or you can use it a little bit at a time, but you have to pay me back a little. You have to pay back at least a certain amount in the minimum amount each month, and you have to pay it on time. And therefore you can avoid fees and the interest rate if you pay it off entirely in the interest that they banks and card services charge you would never would never factor in because you would have a zero balance.

So it is just essentially a permission to use X number of funds. And then you have to show responsible behavior prior to even being able to get one. But this core difference between credit and debit is that credit is not your money. It is borrowed money of the institution, whereas a debit card is your actual money. It is actually in your checking account.

It is tied to your real balance. 

Cash Kid: How do people use credit cards today?

Amy Greer: Credit cards is a fast, fast growing industry, and it is where I think the large majority of transactions are occurring on credit cards. Credit cards, it's increase from, let's say, you know, probably five years ago, I think it was like at the 20% rate was the number of payments made with credit card. And today it's it's like in the thirties if if I recall from the last time I looked.

And a lot of that is related to how the different credit card companies and banks present their services and give you things that come as a bonus with it. So you can earn points or you can earn free airline flights, or you can have some you can set up and choose donations. So they've made it very attractive for people to use credit cards.

Cash Kid: What age can you get a credit card and where can you get one.

Amy Greer: So you can get a credit card on your own technically  at age 18, however, you need to have had a history of proving that you have had good behavior in terms of paying off bills. So to do that, you would have had to have have get a high school job, show that you have income, get a cell phone bill or something, some sort of bill, something of yours in your name before you're 18 and pay it back regularly.

Have a savings account, show that you saved. All of that are the behaviors that are going to help you build credit. But really, you can't apply for one until age 18.  

Cash Kid: What's a good way for parents to help their children with their first credit card?

Amy Greer: A great way to help them would be to teach them how important it is to use it responsibly, because it really, really if it's not done responsibly, a credit card can actually harm your financial well-being more than helping it. So it's it's a good way to to build credit so that you can get future rewards from it.

So even if you have a $5,000 limit, if you know there's no way in the next year you're going to make $5,000 or get $5,000 in any capacity, then you don't need to spend anywhere near that.

And so learning just some of those tricks about how to use it responsibly, paying it off on time, the minimum and don't spend more than you can pay back , then you'll be well on your way towards making the most out of it.

Cash Kid: How can a credit get you in trouble?

Amy Greer: Credit can definitely get you in trouble easier than you would think. There are some some situations where you're asked to pay a bill or something, and if it's late, even one time, depending on the service provider, they can turn you into a credit bureau, I mean, to a credit agency, and that can ding what we call ding your score.

And so you have to have a you everything you do is building a profile for you for your future. So credit can get you in trouble. If you're not responsible in making payments, then you can not be approved for future credit cards or loans.

When you go to buy a house or you can be given a very high rate. So if you if you damage your credit, then you're going to go in kind of a different bracket, if you will, for what rates you're eligible for. And you're typically not going to get the most competitive rates. You're going to get rates that are very high.

So that'll end up costing you a lot more money just to borrow money for a credit card.

Cash Kid: How do you feel banks are preparing themselves educational wise or app wise to accommodate the upcoming generation… that's going to deal more with just digital currency and kind of the way they want to handle money?

Amy Greer: Yes, that is a great question. Banks have really upped their efforts on financial education and financial literacy.

I can assure you all the conversations at banks are heavily weighted on building the technology in the financial education for the future.

So building those things are going to be absolutely critical to attract anyone in the younger demographic to want to come and bank with us. So there is a lot of energy, a lot of investment going into prioritizing all of the digital solutions on top of that financial education. So the combo of those two is what is what really adds value.

Cash Kid: Is there anything we haven't asked you that you would like to share with our audience?

Amy Greer: I think we've covered it all. These are great questions and it's a really, really important topic for teens and you really understand the importance of being responsible early on so it can help them in the future. 

Thank you Mrs. Greer for furthering our financial skills. 

Cash Kids, thank you so much for listening. We’re going to dive into the topic of credit next week and tackle a topic most adults don’t understand. Your credit score. What is that? Tune in next week.

Got a financial question for us to answer? Just email me at: [email protected] or leave a message on our website at cashkidpodcast.com. Also please leave a review wherever you are listening from, and follow us on Instagram. We appreciate you.

Cash Kid Out!

Checking versus a savings account. Do you really know the difference? How many people are still actually writing checks these days? When should you open these accounts? We answer and discuss these questions and more in season 2 episode 3 of the Cash Kid Podcast. Join us as we dig deeper into building super financial literacy skills in this episode. Learn more about your ad choices. Visit megaphone.fm/adchoices

Checking vs Savings Account

What’s up Cash Kids! First, every week we are watching the number of new listeners and we can’t thank you enough for joining us on this journey. Right now, you are listening to season 2 episode 3 of the Cash Kid Podcast where we are focused on learning super financial skills. So, let’s get started!

First a riddle for  you. 

I love riddles. What kind of book can make money? The answer,coming up.

The Cash Kid Podcast is underway!

Intro tease:

So you’ve got some cash. Maybe from an allowance, or that money your grandma gave you for your 7th birthday. Here you go, sweetie. Thanks, Grandma.

Whatever it is, what are you going to do with it? Spend it, hide it away… or maybe invest it? Let’s start learning how to make that money grow.

Time to learn how to be a cash kid.

Checking vs a Savings Account. Do you really know the difference? When do you need one, or both? And are writing checks the ancient past. Hahaha! Joining me today to break it all down is Mrs. Amy Greer with Cadence Bank. 

She is the Director of Digital Transformation where she works to make sure customers have a great experience online or in banking apps, including all types of money movement that we will talk about today.

Thank you, Mrs. Greer, for joining us on the show.

Amy Greer: You're welcome. I'm so glad to be here.

Cash Kid: First off, tell us a little bit about yourself.

Amy Greer: So, my name is Amy Greer, and I have been in banking for over 18 years. And I was with Region’s Bank for a while. And now I've just started a new journey with Cadence Bank here in Birmingham and have always been very passionate about financial literacy and in making sure that the banks can provide tools and technology to help users learn how to manage their financial life.

Cash Kid: All right. We've brought you on to help educate our audience about the difference between a checking and a savings account. Let's start with checking. Tell us basically what that is. Please.

Amy Greer: So a checking account is basically a place for you to store your money at at a bank that can be opened for you by a parent. Really, at any age, they can set it up and they can be joint on your account. But until you're 18. Typically in most states you can't have one on your own. 

So if you have if you earn money from chores or different projects you worked on or jobs as you get older and you start to get jobs, anything like that that you earn or even money that you get as a gift for Christmas or various birthdays. It can all be deposited here in the bank. And the good thing at any bank and a checking account is that it's safe there and it's guaranteed.

You can add on other tools to it, like a debit card that allows you to use money in it, like a mobile app that allows you to have access to the funds that sit to the funds that sit in your checking account. 

 You can then leverage a lot of different ways to send money to people, whether it's through other payment apps like Venmo or PayPal that we all know so much about. Or within the bank account, you can move money out of your checking account for that. You can also use it to buy goods. So there's something that that you need, whether it's food your parents have given you money or you've saved your allowance or something beyond just food it’s something you’ve worked for and you’re ready to purchase it. It’s many different purposes and it’s just a great practice to start learning early on in life.

Cash Kid: What would be some reasons for a kid to open a checking account?

Amy Greer: Well, I think the main reason would be to really get you introduced to learning how to manage money. Until you can have your own account and really see that money that you got, that you earned or that you got as a gift is sitting right here in this bank in this account and it’s safe. And if I go use some of that money for something fun or something, I need to do something I want to donate.

Then you can see what it does to the balance and it triggers it starts in your brain early at an early and important age for you to start realizing what you have left, what you've earned. And the concept of sharing money when needed. And it just helps. It helps develop responsible behaviors.

Cash Kid: Are there fees to consider with a checking account?

Amy Greer: Yes, there can be fees. Actually, that is a very important thing to look into when you're choosing between different checking accounts. So some checking accounts require you to have a certain balance, which means you have to have maybe, let's say, at least $100 in the checking account. And if you go below that, then there will be a fee.

And that's really because it costs the banks money to hold the checking account. However, most of the time, and especially for kids for minor accounts or those that you're on with, with a parent, there are many things that you can do.

Many ways you can avoid a fee. Sometimes it's as simple is just enrolling in online statements and then the bank will what they will do, what they call waive the fee. So they'll just pretend that you don't get it that month or again, if you make a certain number of transactions, then the fee can be waived. So there are a lot of different options and opportunities out there for you to choose from.

Cash Kid: Just curious, my mom talks about when she got a checking account. She was taught to actually write down each transaction in her checkbook. I understand that that's ancient now mostly, but would you agree and talk how people balance a checking account now?

Amy Greer: Yes, actually, I do. While I do agree that it's an older practice, I will tell you, I know personally it is a very valuable one. And strangely enough, I used to enjoy it very much. I loved keeping a perfect check register. I would. I was color coordinated, and I loved writing everything down. And I miss those days.

I now, like most people, rely on the digital platforms to write down where they've spent money. I’m sorry to track where they spent money in lieu of writing it down. So when you log into online banking now for people that don't keep a checking, a check register, when you log into your mobile or online banking, you can see a history of everything that's come in and out of your account.

So that's primarily what people use today to track their funds, money in and money out. But there's also the occasional need for writing a check. And so when you do that, you still, there's nothing there's nothing wrong with writing it down and actually keeping a check register, because it can certainly also be helpful for you in the future.

Cash Kid: And maybe a follow up to the ancient practice question. How do people still write physical checks?

Amy Greer: Well, that, I will say, is decreasing by the day. So even the the pandemic, the COVID pandemic in 2020 kind of started even a more more of a downward trend in usage of checks than we were seeing before. And that was because people weren't around to write checks and hand checks to each other. We were quarantined for a while and then, you know, everyone had those a little bit of angst and nervousness about passing and sharing cash and checks.

So with that, I think most Americans I read that 57% have not written a check in the past month. And there was an even larger an even more material number than that that had not written one in in a year. So I think it just about now, it's an average of about 4% of all of our transactions in America.

Only 4% are written checks.

(music break)

Cash Kid: All right. Let's turn to the savings account now. What is a savings account?

Amy Greer: So a savings account is also something a tool that is offered by banks or financial institutions that give you a safe place to put your funds for that you might be saving for any particular reason. You name it. It could be set aside some money for an emergency fund or to reach certain goals, trips, sports equipment, things such as that.

But it's a way that you can know instead of keeping cash under your mattress or cash in one of your drawer hoping your siblings don’t find it like mine do here sometimes. It is a good place to store your money to save. And the good news is, is that you get paid interest. So the banks, the way banks operate is they actually depend on having your money in savings accounts and even in checking account.

So a certain degree, because they are able to then use that to give out loans to other people. So it's still your money and it's still safe. But. But because of that, because it's so valuable to a banking system, you get paid interest. So it's a really good way to watch your money just grow automatically.

Cash Kid: At what age can someone open a savings account?

Amy Greer: So the good news is parents can open one for you at any age. You can open one at birth and they can start contributing to it and grandparents can start contributing to it for the for a child individually to open one on their own. It actually goes in accordance with state laws and federal laws. That is typically around 18.

Cash Kid: What would be a reason to start a savings account as a kid?

Amy Greer: Well, there's so many reasons to choose from for that. Like I mentioned earlier, it can help you learn responsibility by setting aside some percentage of all the money that you make. If you just start the habit of moving some of that into your savings every time you get money, whether it's paid for a service you provided or paid for a good you made or an allowance, just set aside some of that in a savings.

And there's also many big, big future events that you can start saving for and help your parents out like cars and college and maybe one day weddings.

Many things that you can start saving for in the future. It's never too early to start saving.

Cash Kid: Is there anything we haven't asked you that you would like to share with our audience?

Amy Greer: And everyone just remember even the quarters and pennies and all of that you have laying around all add up. So start collecting it and get out and get your account and get your your behaviors for spending and saving better under control so that you'll be best set for the future.

(music starts)

Thank you Mrs. Greer. That’s exactly what we are seeking to achieve with this podcast. Setting ourselves up young for financial success. 

Cash Kids, we are just getting started with diving deeper into building our super financial literacy skills. Be sure to tune in next week where we discuss if you really know the difference between debit and credit. Do you? We’ll see.

Oh, and to answer our riddle.  What kind of book can make money? The answer is a checkbook. But I called that an ancient practice today… hahaha…. so not so much anymore.

Remember to visit our website at cashkidpodcast.com, leave a review wherever you are listening from, and follow us on Instagram. Cash Kid Out!

Money. You don’t have to love it, but you do need it. In this episode, we dig into our first super financial literacy term and discuss money. Where did it come from? What can it do for you? And is paper cash, nearing an end!? We’ll discuss this and more in season 2 episode 2 of the Ca$h Kid Podcast! Learn more about your ad choices. Visit megaphone.fm/adchoices

Money, Money, Money

Money isn’t the most important thing in life, but it’s reasonably close to oxygen on the “gotta have it” scale. ~Zig Ziglar

Welcome back to another episode of the Cash Kid Podcast. Whether you're listening from Amazon Music, Apple Podcasts, Spotify, the cashkidpodcast website, or wherever you like to listen from, we’re glad you are here! 

In this episode, we start to dive into some financial literacy terms we need to know and understand. And you guessed it, today we’re talking about money. You don’t have to love it… but you do need it. The Cash Kid Podcast is underway! 

Intro tease:

So you’ve got some cash. Maybe from an allowance, or that money your grandma gave you for your 7th birthday. Here you go, sweetie. Thanks, Grandma.

Whatever it is, what are you going to do with it? Spend it, hide it away… or maybe invest it? Let’s start learning how to make that money grow.

Time to learn how to be a cash kid.

Money. Why do we have it? Where did it come from? And are the days of holding paper cash nearing an end? 

Well, money or forms of it have been around for thousands of years. Money serves to measure the value of an item. Back before coins or cash, people bartered or exchanged, goods and services. For instance, maybe one villager would trade his one goat for five chickens. The value of the one goat was considered worth five chickens. 

Over time, the methods used to pay for a product or service developed into the use of coins. Precious metals like gold and silver started to be used in trading. Lydians in 600 BC were the first known to make coins from these precious metals. The first paper money known was introduced in China around 800AD. But it wasn’t until the 17th Century that Western civilizations turned to the use of paper money. Today, central banks print banknotes or paper money and use special security features to prevent them from being easily fake. 

Money now has taken the form of everything from the U.S. dollar to cryptocurrencies like Bitcoin. Thanks to the creation of modern-day money, buying, selling, and trading is easier than it’s ever been.

But while here in the US we are familiar with the US Dollar. Different countries have different currencies or forms of money. In the US, we have the US Dollar. But in India, it’s a rupee. And the value of the currency of one US dollar is equivalent to 82 rupees (at the time of this podcast). This is known as an exchange rate. The value of one currency versus another country. This actually changes as it’s tied to the global market. So if the US market were to go up, then the value of the dollar would be even greater. Google has an easy currency converter if you want to try it out and compare your currency to another and see the difference in value.

Will paper money one day go away? 

Well, who knows? But Elon Musk stated so in a podcast interview four years ago stating cryptocurrency is a far better way to transfer value than pieces of paper. Our generation may be the ones to touch those green bills or shiny coins the least ever. 

Just remember money is a tool. You can make it work for you. Build wealth. Give to others and make a difference. Or cause yourself financial ruin and make a mess of things with it. Having money doesn’t always translate to happiness or bliss either as many might think. Having money means having choices. It gives you independence and freedom. 

Like Zig Zigler said in our opening quote. It’s not the most important thing in life, but you gotta have it. And learning to manage it well early in life is what this podcast is about.

A book review coming up next!

We’re introducing a new segment on the show today. My Mom… “Hello”… is going to start giving a quick book review in some shows. Warren Buffet and Mark Cuban are avid readers and have both stated in interviews that everyone has access to the same information they do. It’s just a matter of who takes the time to consume that information. Books are a great tool and there are many financial books to choose from. My Mom is focused on the ones she feels are good starting points for our listeners. Take it away Mom!

Mom: Thanks, Cash Kid! Today I’m spotlighting the book “How to Turn $100 into 1,000,000” by James McKenna and Jeannine Glista. I was able to check this out at our local library. It’s a great starter book to break down basic money concepts. It gives creative ways to make money and make it grow at a young age. Check it out of your local library or it’s less than ten dollars on Amazon. Happy reading!

Thanks, Mom!

Just remember, money is a tool that can help you throughout your life. So, get motivated to grow your super financial skills in the next episode.

Remember to visit our website at cashkidpodcast.com, leave a review wherever you are listening from, and follow us on Instagram. Cash Kid Out!