Shannon Lee Simmons is the author of Making Bank: Money Skills for Real Life, a new book for teens.Tim Fraser/The Globe and Mail
Do you really want your kids to learn about money from social media? No, you don’t. While there’s great information on social media about personal finance and investing, some is bad or even predatory.
Let me offer an alternative in the form of a new book aimed at teens, Making Bank: Money Skills for Real Life. The author is Shannon Lee Simmons, who has a spot on the all-star team of financial planners I’ve met in my job because she understands people just as well as she knows finance. Here’s a Q&A I did with her recently about the new book:
Q: Shannon, can you start us off with an introduction of who you are and what you do?
A: I’m a certified financial planner, chartered investment manager, best-selling author, speaker and founder of The New School of Finance, which is a fee-only financial planning firm. I write financial books on the side because I love writing about people and money.
Q: In my career, I have seen literally hundreds of books about personal finance. The number of them written for young people? Maybe two or three. Why did you take on the job of writing a book for kids as opposed to adults who could conceivably be your clients?
A: Young people who have money for the first time in their life are hungry for knowledge. Whether it’s an allowance, side-hustles like babysitting and tutoring or a part-time job, they really want to know what to do with it, how to afford the things they want to buy and how to set themselves up for success later. The book started because many of my Gen X financial planning clients were asking me to help with their tween/teen kids when they got their first job/allowance. They wanted me to teach them the skills they need to help them afford to buy the things they like and to set them up for a good relationship with money. After working with tweens/teens for the last two years as research for this book, I definitely wanted to write a book that spoke directly to them and not to the parents on how to teach kids about money. Kids are smart. They know what’s up. I had a total blast writing this book.
Q: Can you tell us about a financial lesson you learned the hard way as a teenager or young adult? Also, one thing you did as a young person that helped your future financial success.
A: When I was a teenager, I repeatedly spent all my money each week. I thought I was so young that saving didn’t really matter. I thought saving was for those big, long-term goals which felt far away. But then, I never had enough money saved up for some fun big purchases I wanted to make. I also didn’t get the chance to practice the habit or skill of saving, so when I got to university, I had to learn how to manage money then. Which ended in some credit card and student debt. I wish I had learned how to manage money in high school, so I was ready when the financial stakes of life got higher after 18.
One really smart thing I did was work when I was a teen. I always worked, even as a youth. Paper routes (ohhh, the 90s), babysitting, tutoring, ice cream slinger, piano teacher‚ snack bar overseer, you name it. I always found a way to earn money and didn’t have to rely on traditional employment when it wasn’t there throughout middle school or high school. I was an entrepreneur from a young age, which so many of today’s youth are, as the job market gets tighter and tighter.
Q: The financial challenges faced by kids today include a high cost of living, a tough job market, expensive housing and a trade war that could potentially hurt the economy badly. Money-wise, do today’s kids need to do anything differently compared to previous generations?
A: Kids today need to practice the skills they will need when they get into the real world at a younger age so that they are prepared. They need to be prepared to pivot financial plans quickly, they need to understand how to live within their means and earn money from diversified revenue streams. They also need to understand the risks and rewards of investing. I noticed that there is a real appetite for high risk/high reward investing and with so much (mis)information on the internet and social media, they need to know how to find trusted resources in a way that simply didn’t exist when I was young.
Q: As an experienced, accredited financial planning professional, what do you think of the personal finance information young people are getting from TikTok videos and other social media sources?
A: This is a tough one. I think there are good and bad things. The good thing is that a generation of youth is interested in personal finance in a major way. This is exciting and I think a relatively new phenomenon. I’m not sure a book like Making Bank would have landed 10 years ago with youth, as I’m not sure they were as interested. Now they are. The downside is that there is so much content out there, much of it is sponsored marketing or misinformation. In addition, I think it really adds to this heightened risk tolerance and a “make money while you sleep” or “double your money, fast” mentality that isn’t realistic for the vast majority of people in real life. That being said, a lot of the teenagers I spoke to seem to be aware that one can’t always trust what’s on social media and that they need to be more critical about what they see.
Q: Let’s say you’re a parent or grandparent who bought Making Bank. How do you present the book to a child or grandkid who isn’t a personal finance keener?
A: I would try saying, “You want to have money? Read this,” or “Want to find out if you have to report your babysitting money? Read this.” Or, “Want to know about crypto and investing? Read this.” I also think it’s the perfect gift to give to someone when they start earning money. “We can start your allowance after you read this.” Or, “Now that you have your first job, read this.” It’s all about making it relevant to what they are curious about right now, not so much the future. The future feels far away. But, saving up for AirPods, video games, Sephora or Fortnite Skins makes it real. If they want these things, they have to save up. Make it about what they want today. Also, the book is written with characters as a story, so reassure them that it’s not a text book.
Q: I’ve heard you talk before about the shame people feel for messing up their finances or not meeting certain standards. What words of encouragement can you offer people in their 20s and 30s who didn’t have the kind of guidance you offer in your book and made mistakes?
A: You’re still so young! There’s lots of time. A little bit goes a long way and always does. Don’t give up hope. It’s better to save $10 consistently than promise to save $100 and set yourself up for failure.
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Reader comment: “Hi Rob – huge fan of your newsletter and columns. A recent newsletter had a question about paper cheques. We haven’t used ours for many years but in getting new insurance policies, the agent required a photo of a void cheque. Lucky I was able to find one! So yes, it’s gone the way of the dodo but some institutions haven’t kept up!”
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