How to Create A Legacy & Pass Down Generational Wealth Beyond Money With Chelsea Brennan

Episode Number: 263

Episode 263- How to Create A Legacy & Pass Down Generational Wealth Beyond Money With Chelsea Brennan

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How to Create A Legacy & Pass Down Generational Wealth Beyond Money With Chelsea Brennan

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Chelsea Brennan 0:02

We really want them to have a creative problem solving growth mindset when it comes to money and success of how can I take what I know and make it amazing and it was my son he was for the first time that he was like, Well, I don't use this toy anymore. Do you think I could sell it to somebody else and so we listed it on Facebook marketplace, you start to see that ability,

Intro 0:20

T-minus 10 seconds. Welcome to the Journey To Launch Podcast with your host, Jamila Souffrant. As a money expert who walks her talk, she helps brave Journeyers like you get out of debt, save, invest and build real wealth. Join her on the Journey To Launch to financial freedom in five, four, three, two, one.

Jamila Souffrant 0:51

Journey To Launch is supported by First Republic Bank. Relationships really matter in your life journey AND financial journey. A lot of banks have great offers to attract new clients, but what about their existing clients? First Republic is always focused on creating and nurturing long-term relationships. Devising strategies, not tactics, and master plans, not transactions. That’s why every client gets their own personal banker — a single point of contact to call, text or email at any time for any reason. I love that I feel valued and supported as a First Republic client, long after I’ve already opened up my account. They value their customers and it shows. First Republic calls it, "banking beyond the offer," and it’s part of their commitment to extraordinary service. Isn’t it time to discover what a long-term banking relationship can do for you? Visit firstrepublic.com today to learn more. That’s firstrepublic.com. Member FDIC, Equal Housing Lender.

If you want the episode show notes for this episode, go to journeytolaunch.com, or click the description of wherever you're listening to this episode. In the show notes, you'll get the transcribed version of the conversation, the links that we mentioned, and so much more. Also, whether you are An OG Journeyer or are brand new to the podcast, I've created a FREE Jumpstart Guide to help you on your financial freedom journey. It includes the top episodes to listen to, stages to go through to reach financial freedom, resources, and so much more. You can go to journeytolaunch.com/jumpstart to get your guide right now. Okay, let's hop into the episode.

Hey journeyers I am so excited to have our special guests on the podcast we are going to be talking to Chelsea Brennan. Chelsea is the founder of Smart Money Mama's and the motivated mama society. She was on the podcast before and episode 175. I'm really excited to bring Chelsea back on to talk about an important topic legacy. How do we create a legacy pass down a legacy that is actually bigger than just money when it comes to our children or the people that we care about. So welcome back to the podcast. Chelsea,

Chelsea Brennan 3:10

thanks so much for having me Jamil. I'm glad.

Jamila Souffrant 3:12

So for the journeys, who did not hear your first story or your episode of the podcast? Can we just do a brief background of how you quit your job and built this brand that you built?

Chelsea Brennan 3:24

Yeah, so real quickly, my background and right out of college was in finance. I was an equity research analyst on Wall Street in New York, I was there for a few years, moved to a hedge fund in Boston where I became a VP and manage my own portfolio. For several years until I started my family. And right before my second kid was born, we really just started to look at what work life balance was looking like what my health was looking like, and really wanting to better align what I did for work with my values. And so I left a couple weeks before my second was born, which was really scary because my husband was a stay at home dad. But we decided we give starting a business two years of runway and see how it goes. And now we're a little past year four, so it's going great.

Jamila Souffrant 4:02

Yes. And that's what I feel like our first conversation. We aligned on so many things because I quit my job right after having my third child. My husband is not a stay at home dad, I wish she was I think he's better equipped for like doing the primary parent role. But we both share that responsibility. What I really loved about your initial story so again, if you have not heard Chelsea story after this, you could go back to Episode 175 is like taking that risk as the primary breadwinner, being a mom and then still being motivated. Like I love how you transferred your your skills of being an X hedge fund manager to doing what you're doing. And I feel like it shows in your brand and the precision of the way you do things because you have an event coming up and so you're listening to this in real time. It's from Chelsea so the dates April 8 through the 10th April 8 to the 10th. And so I felt like when I see you planning this and how much work it takes. I'm just like wow, she is so organized. She's so honest, I think I gave you those props, the last time we spoke. But again, it just connects like everything that we do with our careers. We may not think like, Oh, we're doing this thing we don't like. But it's like a building block to the next thing we want to do. Like it's helpful what you did in your past life or career life, what you're doing now, right?

Chelsea Brennan 5:17

Absolutely. And I think we've talked about you when you talk about your your journey levels to launch work, flexibility, being a big one, like we had been spending years preparing for financial independence. And the fact that we had this nest egg set aside, gave me the freedom to go do this, right. Like, I'm not recommending people just go quit their job and see if they start a business from the ground up. Without any safety net, it really gave us that ability. But yeah, there's so much of what I did before that gets tied into the work I do now. And also just a whole new set of skills we had to develop as well. And I think part of the reason that I've loved this transition is what I noticed in my old career is that there are a lot of skills I had that I wasn't able to use in that job. And so moving into something that both took the best parts of what I learned from my old job, and some of the things that I felt like I'd been ignoring that I really love to do, like thinking about mindset, like teaching and working with independent independently of families. That's been great.

Jamila Souffrant 6:07

Yes. And so let's talk a bit about legacy. So we were kind of discussing like, Okay, if you came back on the podcast, what's the topic we could talk about, that we didn't talk about in the first one? First episode, and you brought up legacy? And I said, Yes, that's it. And you made it so that it wasn't just talking about money as a legacy of what we leave behind. But what are the foundational things that we are pouring into our family into our children? You know, as a mom of three, you have two boys, what are we doing that's bigger than just the money of, obviously, people care about, like the 529 accounts and any money that we can give them? But I wanted to dig in on that. So first, what does legacy mean to you?

Chelsea Brennan 6:48

Hmm? So legacy to me means? What is the collection of beliefs about their own skills, their ability to manage money, their ability to find ways to build wealth? And how they interact with their community? What are their values that they espouse? What does that all come together into the type of people they want to be? And the type of kids that if they choose to have kids in the future? Well, how are they going to parent? How are they going to raise those kids? And so for me, it's also about what's the legacy we leave for our community? How are we impacting our community in how we live and what we do with our money when we pass, but for our kids as well? What is that legacy we're passing on. And so this was a big consideration for us. If you look at my old career, right, I was 26 years old, making 500 to $600,000 a year. And in a lot of ways we could have, I could have stayed in that career, and left this huge financial legacy for the boys, right? When we think of generational wealth. Typically, we think everyone thinks about dollars in the bank, like, oh, I want to be able to leave my kids for their enough money for their first house, or whatever the thing is, but then you look at the statistics, and 70%, of generational wealth is lost by the second generation. So you do all the work to build your legacy 70% of time your kids squander it, for the people that make it to the third generation 90% of that wealth is gone. And so if we want to create something that actually lasts, that's more something that our kids have ownership and agency over that they feel like they're involved, then we have to do something differently. And so that was part of my decision to leave was that I was looking at, what was I teaching the kids about their values? What was I teaching their kids about what work looks like, right? Is it something that you're working 80 hours a week that you don't feel like what you do has a good impact on the world? Am I telling them, there's not more creative, different ways to use their skills? And so we chose to leave to say, okay, money is important. Security is important. But other things are important, too.

Jamila Souffrant 8:41

That resonates with me so much in terms of how much we can work hard to give our family a head start. But then, like you said, what the second generations, most of that time that money is squandered. And, you know, I feel like, especially for people of color, and black people wouldn't, I don't remember the specific numbers, but it always just talks about, like generational wealth and how much less we are starting with, and then so much of us are working hard, right? Working hard to build this foundation. And to think that you can work so hard to build the foundation. And if even if you do everything right, and you pay for the college, and I want to talk about this a bit when you die, you leave them let's say a million dollars, or whatever you were able to leave behind to know then that possibly the next generation may not benefit from that or even they may not benefit from it if you did not do it the right way. Because what we think the right way, is it sad. And so it's not just about money, and I see this all the time. So my mom works in the school system, and my husband works in the school system, too. He's a teacher, and she'll tell me often like, you know, these parents, unfortunately, some of them are working so hard, because they're single parents, and they don't have as much energy or time to pour into their kids because they literally have to work so their kids are leaving school at like two or three and they have all this idle time. And the kids, they have a roof over their head, they have clothes. But they need more than that. And so sometimes the parents will come in and say, I don't know what went wrong. And it's just like, because while you were meeting the physical appearance needs of them and they look good. And they have the latest things, emotionally, they don't know what it takes to, like, be a human in this world or make the right decisions. And that's what is missing.

Chelsea Brennan 10:26

I think there's a huge piece too, when we talk about people who are first generation wealth building, and they hear a term like generational wealth, and they kind of shut down because and we've experienced this in our community where people are like, Well, I'm never going to be able to like leave my kids assets, right? Like, I'm trying to make sure that I can pay for my retirement and help them with college. And like, that's, that's what I can do. And when we think about generational wealth, that way, we leave so many people out of the conversation. So what I tell them all the time is like, you can be the start of your family's legacy, just by giving them the lessons and the tools, they need to go build their own wealth. Starting with a foundation of I'm entering adulthood, knowing the value of investing, knowing that my work matters, and that I always have the ability to earn the money that I need, that I know how to invest all those things mean that they can go they have a jumping off point that you didn't have. And so generational wealth doesn't just mean dollars. And even if you're not in a position to leave dollars, you can still create that legacy.

Jamila Souffrant 11:21

Totally, totally agree. What's more important. When I think about my mom and the legacy she has left me she's still alive, thank God, but the what how she gave me the head start. When she did, yes. And later on, she was able to give me money to help me buy my first property. But before that, even if she didn't give me that money, I was already instilled with this confidence and mindset that I could do anything. And it wasn't like this false, like everyone gets a trophy thing. But it was like literally like you could do anything. And if you fail, I will be behind you every step of the way, like you are capable. And that was worth more than anything even growing up not having much. That was so important. And I see it and I'm like, Okay, how can I do that for my kids? Right? Like, well, how can we speak the confidence and the self worth into them? So that the decisions they make can be ones that eventually come into fruition as material things if they want?

Chelsea Brennan 12:15

Absolutely. So one of the things we do to kind of create that is we are I'm a big proponent of having set family money values, and really getting honest about what are our goals as a family? How do we talk to each other about money? What are the things that we don't say this is even getting aware of like, what are your partner's money triggers money, anxieties, and knowing how to not step on those toes, right? Like, this is a conversation. The example I use all the time is we had a woman in the society who was really frustrated if every time she felt like she brought up money, her spouse would freak out, he would just get really upset and he wouldn't want to talk about it. And he shut the conversation down. Well, after a whole bunch of work we do in our membership q&a, we do a whole lot of mindset work. She was like, okay, so what I realized is I tend to bring it up at the dinner table like not as an argument, but I'm just mentioning something that came in the mail. And he loses it. And as she talked to him more like not on specifics, not on blame, just like hey, how did you grow up with money? His parents fought about money at the dinner table all the time. So conscious or unconscious, or subconscious? He did not want to hear the money conversation at the table like it would it didn't matter if the most positive conversation in the world, he couldn't do it at the dinner table. And when they shifted to like, hey, Thursday nights, can we have after the kids go to bed have a money conversation? It all got easier because he could mentally prepare for it. It wasn't in a place that gave him you know, money anxiety. And so that goes into your family money values to have like, how do we talk about it when we talk about it?

Jamila Souffrant 13:37

Yeah, totally. And I think if we are like, let's maybe look back at us, like I'm curious to know, what was your family or money, family values growing up? And what is the legacy you felt like was left to you? How did it instill you? I'm always curious when I meet fellow ambitious people, what made them that way? Right nature and nurture. Like it wasn't just inherent that you know, Chelsea is so ambitious and does all this over there certain things that helps you be that way that your parents actually did. What was that for you?

Chelsea Brennan 14:06

Absolutely. So my dad was an entrepreneur. And so that had a big impact on me. And this is the thing that when you teach your kids money lessons, there's going to be put you're not going to do it perfectly just like anything in parenting, like there's going to be to be flaws. And so for my dad, he was a person who idolized wealth thought like wealthy people were like better it was just his whole thing. And despite the fact that he was a very good with money, like he was good at investing, he you know, he understated index funds, and he always saved they always had a lot of credit card debt, right? Like he was always trying to look wealthy instead of actually being wealthy. Right. And so, for me, one of the things I took away is I was a natural saver was just how I am I'm more of a security seeker. And so he praised that from when I was really, really little. And so one of the things I learned was that a, the more successful I was financially, the more love and attention and praise that I got. And so that was a thing and So I had built this relationship that like net worth is something that the mindset that I have narrowed down to is I had this mindset that net worth equals worthiness, right. And so I had a really hard time as an adult, even when I was earning really good money spending like a cent of it, because every time I saw that bank account balance go even a little bit down, it made me nervous, it made me scared. And so that was something that I had to work through. But the positive sides of that were that I learned how to work hard, I learned how to invest. And I will say that, like his business partner, retired in his, like late 40s. He's like, 4748, he was like an original Boglehead guy. And he got me investing in teaching me about investing from a really young age, like 12 and 13. He got me security analysis by Benjamin Graham for my 14th birthday. And I'm just like, this is like a Tom, if you guys have ever seen that book, it's like a brick. It's very boring, but it was actually interesting. So anyway, I learned a lot of positive things in that frame. But I had to rework my own mindset on spending when I got older.

Jamila Souffrant 15:57

That's so interesting. And exposure, I mean, it's like everything. So the fact that you're you, you grew up seeing an entrepreneur that he actually was aware of investing, and at least told you about saving or encouraged that in you. And then the fact that you know, someone who would even give you a book like that at 14. And when I think about what was passed down to me, it was more of the internal work. And it was actually my mom valuing experiences over things. So she would spend her laughs to put me in gymnastics or swimming class because she wanted me to have that experience. You know, she, I remember going to the Bronx Zoo, and taking all these, these trips with her. And she spoke to me a lot. That's the other thing. My mom always says this, that you have to teach your kids how to be critical thinkers and be the voice like you have to teach them to have that internal voice that helps them make the right choices, because you're not always going to be there to tell them what to do. And so she said, she would talk to me about everything. And she would ask me, what would you do in this situation? Or here's this what's happening, like, tell me or walk me through this. And I feel like that is a big reason why maybe when it comes to money, and my career and all the things that I'm doing, I'm so thoughtful about the things that I'm doing. Because I'm critically thinking about, you know, the trade offs and what can be. And then on the flip side, it's like the same thing with you about not wanting to spend money. I feel like there's still things that I could work on. So for me, it's more of also spending money. Like at one point I was tied to how much can I save and invest? Then I'm now pulling back to say, Okay, but how can I spend money in a way that frees up time, energy allows me to enjoy my life. And sometimes that's a little hard for me, because I'm like, Will I still be able to make the same amount of money next year? Will like there's a bit of that scarcity back and forth that comes into play that I have to be aware of?

Chelsea Brennan 17:46

Absolutely. And I think that it's learning to view money as a tool. And money is a means to an end, not an end in itself. I think a lot of us when we start that fi journey, it's like how high can we get our savings rate? How much money can we put in the bank, and we lose sight, a little bit of the fact that like money in itself is not a benefit. It's like, what are we trying to build with it? And your point about raising your kids critical thinking skills, that's one of the core things that we focus on in our house. And so you hear a lot like, don't tell your kids, you can't afford something, right? Like, this is a bad mindset thing. But what do you say instead? Because a lot of people are like, okay, yeah, it's great that the rich never tell their kids that but like, they can afford it. Of course, they don't tell their kids that. And so for us, the alternative is, mom and dad have different priorities right now, with our budget, what would you do to afford it and always ending with putting it back on them to problem solve? Like, we really want them to have a creative problem solving growth mindset when it comes to money and success of how can I take what I know and make it amazing, and it was my son, he was for the first time and he was like, Well, I don't use this toy anymore, do you think I could sell it to somebody else. And so we listed it on Facebook marketplace, you start to see that ability.

Jamila Souffrant 18:55

And that's the thing, it happens at such a young age, and you can start cultivating it at a very young age. So let's talk a bit more about like the mindset piece and how you are seeing scarcity versus abundance when it comes to money and resources and how you're teaching your kids about that. Because now that I have more and you know, I don't know how it was with you, but like this mom has more than what my mom had in terms of resources, and money. But part of what makes me me is that I didn't have as much so I felt like that drive. And that ambition is because I had that kind of striving mindset. And if you do raise your kids with more, how can you still give them a striving mindset? Not struggle, mindset, but striving, like you know, they want more. They're not wasteful. They're appreciative. What are your thoughts on that?

Chelsea Brennan 19:42

So there's two things I would want to mention. The first is we operate what we call a family financial ecosystem. So how do we make sure that everyone in the family is succeeding and when you think about it, like adult child needs to move back home that's going to pull mom and dad down. Mom and dad don't save for retirement. Kids are worried about do they have to It's all we all have To have this balance, and so even though our kids are little, so they just turned four and six, we already explained this concept to them. And that's actually how we explain allowance to them that like, hey, someday, you're going to be have a much bigger role in helping us continue to maintain our financial safety and security and wealth. Right now, you're old enough to manage $6 a week, but every year you get older, you're gonna get a little bit more and like, and we encourage them. So when we sit down, so I have a side business, it's just like a passion, little business selling stickers that like my friend and I design. And so Henry will come, my six year old will come and help me pack orders. And when he has an idea, I don't just even if it's just crazy, because he's six, right? Let him talk it out, like, Oh, why do you think someone would pay for that and like, really start to have let them have that ownership? Because we want them to have that kind of dynastic thinking, where, you know, how do I make this thing that mom and dad are passing on even better for my kids, and so forth, or my community and so forth, that they choose not to have kids, right. And so making them feel like they're part of this team, instead of you know, the kids is huge. And then the second part is giving them that autonomy allowance is a huge factor in setting boundaries about what we will buy for them, and when and what they're responsible for, like, we will take them to the aquarium. But if you want to buy a snack or buy something from the lunch stand and not eat, what we packed you that's going to come out of your allowance and thinking about that, because just learning how to budget how to plan how to set a goal and reach it. Every time the boys reach a savings goal. It's so much fun, because like we keep saving charts for them. And their savings charts over his have a picture of what they're saving for on the top every time they get $1 they colored in. And when they reach the end, they're pumped, they want to go to the store. They're the ones who we make them do the whole transaction. My six year old just used to move to digital allowance, but for a while they used cash. And so the counting it out and everything. And so it's just that practice of saving isn't something that means my money goes away and I disappear. And I don't understand it saving means I could get something really cool that I couldn't get otherwise if I wait.

Jamila Souffrant 22:04

That's great. Okay, I want to go back to the allowance part. And then just logistically, because how that works, because I remember having this conversation with you the last episode about the ice cream truck. It's getting warmer outside the ice cream shop comes every time at the park. And ice creams are they used to be $1? Okay, like $1.50, which, you know, great. Now they're just for ice cream cone. But sprinkles. It's like $3 I have three kids. Yeah, you cannot get ice cream every day. And I see some parents doing it. I'm like, you know, whatever. I'm not counting pockets. But with this, right, like perfect opportunity to say, listen, and we were doing this we did, we did kind of fall off. But we were doing this where we were giving them the allowance. And it was only as much as you had if you had the money to do it fine. But then what would happen is I guess you got to get over this hump. If one person spent the money and the other person did it, there'd be like, because they're not logical yet. They're still building that sense. They didn't understand why even though you just bought an ice cream. That's why you can't get another one. How do you get over like the guilt of I should be doing this? I shouldn't be buying the my screen not every day. But why should I make them pay for it? Or why shouldn't I contribute more. And I think that's kind of the part where I know it's me, as a mom, sometimes I get tripped up where it's like I should do this for them like their kids.

Chelsea Brennan 23:18

So this is where I love the phrase, I'm not raising kids, I'm raising adults. And I want them to grow up to be an adult. And while it might feel in this moment, like I should do all these things for them. What we should do is give them the skills to thrive when they're older. And so you can decide as a family. Hey, guys, every Tuesday at the park, I will buy you ice cream. If you want ice cream on another day, you have to use your own allowance. And yes, that causes hard moments as a parent and that we have to work through because it's tearing it our own hearts. We hate to see them struggle. But these are the moments right? Can we can we learn when they're in $3 decisions and not in $303,000 decisions is the power. And so for us, the boys get $1 per each year of age, it's not tied to chores is a part of being part of that family system. Right? You are practicing with money. So they get $1 per year of age. And that's per week, per week. Yes. Okay. It has to be split into they're saving they're giving in their spending category. So for my six year old, he goes $2 per week, for my four year old, you mentioned how you kind of fell off with allowance. The most important thing when we're talking about teaching kids about money is consistency. And so when you talk to adults who had allowance that kind of started and stopped and started and stop, it builds a lot of insecurity around money and that money is something that can be taken away in this kind of power dynamic. And so we encourage making allowance as simple as possible so you can stick to it. This might mean if your kids are a little bit older, kind of six and above switching to digital allowance, which will auto pay them every week and then you don't have to worry about it. Or for my four year old splitting $4 into three buckets is a pain in the butt. And so we tell him as he's got to put $1 in each jar and then each week he gets to choose where the last dollar goes. That's the first one The second part is they must always have a saving and a given goal that is entirely self directed, right. So I don't tell them what kind of charities to give to I don't tell them what to save for. But each time they pick a new savings goal, it's got to be the only stipulation, it's got to be a little bit bigger than the goal they set last time. And so we're building the muscle of delayed gratification. And this is a place where a lot of parents get stuck because we see the value of early compound growth and we think about their big college cost. And so we want that savings money to be for their future. But if you're six, seven years old, college and retirement are like, never Neverland, right? What are you even talking about? I can't think a week in the future like why are you taking my money for 10 years from now?

Jamila Souffrant 25:41

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Chelsea Brennan 27:09

It's really about what is a goal that is just a little beyond what would really kind of stretch them. So like Henry, who's my six year old, he saves for goals that are about six months out right now to get to. And so those are their goals, if they want extra money, they can either find ways to be entrepreneurial and creative, this could be selling their toys on Facebook marketplace, this could be doing a lemonade stand, or there are extra over and above tasks that we will pay them for. So the rule in our house is if you can say no to it, we will negotiate paying you for it. So for example, they cannot say no to filling the dishwasher, they cannot say no to making their bed, they can say no to washing dad's truck, then we'll negotiate paying you for that. And so there are ways they can earn extra money. But that's the system and they always have to make sure that they're tracking those goals saving in the given goals are there. And the spending money is for them. And we have to kind of take that step back and let them make mistakes with the spending money too. Right. I mean, we had poor Henry's getting all the examples, because he's the older ones, we have more experience with him. But he had $5. At the fair, we gave them an extra $5 At the fair two years ago. So he was just four. And he lost. And he was devastated. He was so upset. He was asking for another $5 My husband and I like really hold on state, my sister in law was with us, like stay with indicating for a minute. So we went and talked to Jeremiah is like, I feel like we should really give them another $5 Like I do too. But I feel like this will never happen again, if we just like get through this period of time. And so we are already at the fair, he already had his wristband to go on rides, he just couldn't do like an extra game or something. And he was so up, he has never lost like he just holds on to it like crazy. And like even his wallet when he's carrying his wallet in the store. He'll be like, can you put it in your purse until I'm ready for it? Like I don't want to leave it on the shelf. And so it's hard. It's so hard, but it's worth it.

Jamila Souffrant 28:53

Yeah, yeah. Okay, so what we do what you're doing with like, if they get gifts, or cash gifts for their birthdays, or Christmas, especially if it's a lot, you know, like they're getting 30 $50 from multiple people. How are you thinking about that in terms of giving it to them or saving or investing on their behalf.

Chelsea Brennan 29:12

So this is a place where open communication with your family is important. And so when we started doing their money lessons we talked to their grandparents about this is the max amount you can put in their card, if you want to contribute money to their 529. If you want to do more money somewhere else, just don't put it in the card because we don't want to build a relationship where money is given to them and we take it away. It's like not a power dynamic we want and so 10 to $15 is the amount that they could get in a card. And for that money. We want them to save at least 20% and the rest they can decide what they want to do with now a lot of times they actually choose to put it towards their savings and they're giving goals because they like to reach those. They like to reach those milestones, but they can keep it for spending money. So currently my you know my six year old just turned six in February. He has like $50 in his spending budget because of his birthday and he doesn't want Spend it because he knows we're going on a ton of different vacations this summer and visiting different grandparents and whatever. And he loves to go into like little beach shops and stuff. It's one of his favorite things. So he's been like, I'm gonna save it for when we go to Cape Cod, great. And set it aside for that. But yeah, so we've just made sure that that amount of money doesn't come past their eyes, right. But

Jamila Souffrant 30:18

if you do get more, what do you do with that? Are you investing on their behalf or you haven't gotten to that part?

Chelsea Brennan 30:23

Oh, shall we? Yeah. So their grandparents will often for birthdays and, and holidays, write checks for their 529. So we put it in their 529. And we have a goal of we will save in their 529 enough to pay for your state school. And then any additional savings we want to do for them, we keep it in investment accounts in our name, just because it has a lower impact on the FAFSA, if that ever became an issue, and we just have more control over but we set it aside there in case they decide not to go to college or something, we have a little bit more flexibility with that. 520, right.

Jamila Souffrant 30:53

And it's so interesting, because what's happening like in our family dynamic, it's different. So we'll have multiple people give cash, and I'm not going to tell like them not to give us cash for our kids. You know, like it's like, sometimes it's 30, sometimes it's $40 per kid, which, you know, we're grateful to have so many people. And it's not like they get a lot of cards that have that. But you know, in a year like one kid to get maybe like 300, you know, total for like birthdays and Christmases for multiple people. So what we've been doing is at a certain age, we put it in an investment account. And Ernie, I was actually speaking to my financial planner yesterday. And they suggested, you can still do that. Or you can open up the custodial accounts for them. And like start separating, separating it out. But it's like when people give me money for them. And especially because at the age of my kids are 75, and three, so certainly the seven and five year old, like they have their ideas of what they want to buy and what they want to do. But they were at the point when we first started this where it was like all just like one pot of money. So we're putting it all in one pot. And when you get to a certain age, we'll divvy out and equal thirds. As they get older. This is like their money now. And now we have to consciously make a decision, how are we going to handle the bigger money amounts that come in? I don't know culturally, like I'm not gonna say to like that to people, like don't only give us 10 or 15 $15, because people actually feel good. They're like, Listen, this is my nieces, my nephew, here's $40 for them. But I'm like, okay, but now I have to figure out what that looks like to divvy it out and come up with a system that's consistent and fair. Because I do feel like it's their money. It's not my money, like, people will say, Oh, go buy them something or use it on something that they want. And I'm like, but if I'm putting them in a class, I'm putting them in a class, I'm not gonna use the money you gave me to like pay for the class, you know what I mean? So it's like, we come to that point where we're, if I'm buying them clothes, it's my decision to buy them clothes, unless they say, I want this new jacket, which they don't think they don't care about that stuff yet. So I feel like what the we're still figuring out quite honestly, like what to do with the gifts. So that's why I was so curious is what you do at yours.

Chelsea Brennan 32:54

Yeah, so when we don't tell people not to give us more than we're like, you can give them whatever you want. Just only give them that much.

Jamila Souffrant 33:03

Got it.

Chelsea Brennan 33:03

We're also very blessed to that people want to give them money, want to put money aside for their future. We've explained to them listen at six, they can't think that far in advance. And it's actually hurting their money mindset if they see money and it disappears. So if you could just like give them 10 to $15 that they can spend and have a blast with and just write a check or give us cash or whatever for the other part. And we will put it right in an account for them. That works much better, right? Because I agree with you because they're like, no, no, it's my, it's my grandkid, it's my niece. It's my whatever. And I don't want to shut that down at all. And I don't want to like that money can go for them. That's, that's amazing. The one thing with the custodial accounts just to mention, and this really depends on the level of wealth you have, and whatever. If you do have any plan to even fill out the FAFSA for financial aid, an account in the child's name has a much bigger hit to financial aid than a parent owned account. So 20% of child owned assets are expected to be used for college expenses. Sorry, 20% of kid owned assets. 5.6% of parent owned assets are used to reduce financial aid. So if there's any chance that you could end up with financial aid, and sometimes for people with financial independence, you do qualify because your income numbers are so low because you're only withdrawing. And so it's just something to consider. And that's why we actually keep it separate.

Jamila Souffrant 34:15

That's a good point. And that's one of the reasons why we were keeping it separate but and this is where people come to these decisions and spend so long not doing something because now you're like weighing the fact of Oh, like, well, we don't know what's gonna happen in 15 or 20 years and should we not just make things clean, separate it so they have their own money, it's in their name, versus having it in our name, like I just feel like sometimes things become so complicated and work against you.

Chelsea Brennan 34:42

We do have separate accounts sweet or open sub accounts, sub taxable accounts. So each boy has an account that is nicknamed for them even though it's our so it's separate from our money. And we can see what is each boys. It's just that it's our it's in our name. So

Jamila Souffrant 34:56

it's in your name. So right right. I think that's great and it sounds Like to like, Are you paying? Or do your since with your son helps you with one of your side businesses? You're just one are you paying him and he does he have a Roth IRA, because that's one of the things that we did with our kids as we've learned that it's helpful and legal to do.

Chelsea Brennan 35:15

So that business is new. And so we're still paying off like, we're not profitable yet. And so like impacts or whatever, so we're not doing it yet. But we he and I both talked, he I've talked with him about that of like, negotiate He's so funny, because they don't really understand fully yet they gain so much information. But they still, the range of value is so interesting to them, when you ask him how much he wants to be paid. And it's either so low or so high. When they're that age, they're like, they just can't get it. And I was explaining this to someone the other day that the boys went to an archery shop, my six year old got his his first like bow just to shoot targets, whatever, for his birthday, and he wanted new arrows. And so he went with my husband and my husband has always really wanted to do more archery, he did it like at camp as a kid, but he wanted to do more of it. So he bought himself a bow so he can shoot with Henry. And Henry got three arrows. So cost him $12 of spending money. And he comes in and he tells me that this is how much it costs. This is how much he has left. And then he goes ma Jad spent over $100. And it was like you could see his brain was like thinking about how long it would take him to even get $100. And so then we had to have that same conversation of like, well, Daddy gets more spending money than you. He has more control over our finances. And it was just like he was It was so funny. So anyway, he will get a Roth IRA probably in the next year. Yeah,

Jamila Souffrant 36:35

yeah. And I do want to just go just take it a little bit back for people. But if you have a business, your kids, if they have earned income, they can open up or you can open up for them a Roth IRA, and then that's after tax money, and then that money be invested over time for them. The caveat because I do want to say, as an entrepreneur, I know there's like, you know, there's these tweets and memes that like say that and it's like, you have to be careful, because they actually have to be doing something in the business or it has to be earned income. And there's a million of things, not millions, but there are things that they can do, whether that's like helping you with your mail, or social media. You know, for me, it's like the like they are very expensive models, if I use them social media for things like that cost a lot of money, so I have to pay them to do that. So you have to be intentional and just don't take sometimes like people say Oh, save all this money, do all this stuff. But make sure you're talking to your tax planner, or your advisor to make sure that these are legit ways. But that is a way that you can invest on behalf of your kids.

Chelsea Brennan 37:32

It's something that you see tick tock advice all the time of like open a Roth IRA for your kid with no specifications, like hire your kid, if you don't have a business, you can't just like hire your kid to mow the lawn. And that's Roth IRA money, it can't you have to have a business or they have to be working for someone else. So if they're babysitting, or they're mowing somebody else's lawn, who's paying them that can be earned income, and all you have to do is track it easy spreadsheet, like just make sure you have some record of it. But that you can't hire them unless you have a business.

Jamila Souffrant 37:59

So good point to make. And I like that we're having just like this kind of casual conversation about it. Because I know I can't be the only mom and even though I'm you know, a personal finance educator, who still struggles with like, what to actually do and like, in the thick of it, you know, in the day to day like overall big scheme. I know what I want for them. I know what we're aiming to do. But in the day to day, how are we raising money conscious kids that can go into the world and be okay, like that's something I think a lot of people struggle with.

Chelsea Brennan 38:29

Absolutely. It's why we decided to do Mama's talk money, which we mentioned, you're speaking at, we focused this theme around legacy. Because I feel like we have to have a broader conversation, either. Some people feel they're not worthy of a legacy, or they can't think about it yet. Like once I achieve these things, I'll think about what I want to do, or they have some vision of it. But they haven't figured out how to align the day to day with that goal, which is exactly what you're talking about. And what they're doing today might actually be moving them to a totally different message that they're not centered in on like, Okay, what do I what do I have to change? And so that's the whole focus of the weekend is like, how do we get different perspectives on what legacy looks like?

Jamila Souffrant 39:03

Right. And again, I love that it's not just based on money, of course, like after their needs are met. That's great. But what does it look like to be intentional at these young ages? Or maybe you have older kids, right? Or nieces and nephews that you want to help? Mama's talk money, the summit is happening from April 8 to the 10th. So if you listen to this in real time, or before the event happens, you can grab your ticket at Journey to launch.com/legacy. I will be speaking on that Friday. I believe that's when I'm speaking. But there's so many amazing speakers. And again, you do such a great job with like putting this all together. Like I'm like Chelsea, I need to hire you for like my book launch in two years. Like can you help me? Can you take a break from your job to help organize what I need to do? But I think part of it too, like as a mom or as a parent, is how do we pour into ourselves so that we have enough to give to our children? So I do kind of want to end or at least touch on that. Do you have thoughts on how do we pour into ourselves without feeling guilty? How do we have more time and energy, and be selfish in a way so that eventually it helps other people. But really, let's talk about helping ourselves first.

Chelsea Brennan 40:18

So often, oh my gosh, all the time, people come to me, and they're like, how do I teach my kids about money? Like, is there a book? Is there? No, how do I do this? And I'm like, Well, have you worked on your money stuff? Like, how do you feel about money and your money mindset? And they're like, Well, I don't want to talk about that. I just want to work with my kid. And the reality is, yeah, talking to them as gray allowance practices are great, but what they're watching day in and day out, is you. And that is where they're picking up the majority of their money lessons, the majority of their life lessons, the majority of their, you know, sense of self confidence, right? Are they watching you put yourself last? Are they watching you have passions and curiosities and interests that you never explore? Because either out of fear or out of not prioritizing the time or whatever it is, what example, are you setting across the board, and by pouring into yourself, and being the best version of yourself, you're showing your kids how to live? And that's going to be a much more powerful lesson than any book, you could buy them any quick resource, you could, you could play with them. Those things are good. They're just not the whole picture. And so I think that's the most important thing is like, how do we decide to take the things that hold us back our limiting beliefs and heal them? So we don't inadvertently pass them on? Hmm,

Jamila Souffrant 41:31

that's the key. It is, and I know, it sounds like you know, when we say it sounds simple, but we know that that takes work takes a lot of work to get that done.

Chelsea Brennan 41:43

It does. And you mentioned teenagers for a second. So we you and I both have young kids. So we talked a lot about young kids. And I just want to mention that if you're you have an older kid, right? You've got a 12 to 18 to 20 year old, right? And you feel like we've never had these conversations. And now you're listening to Jamila and I and you're like, Oh crap, I just really am behind the eight ball, those conversations can still happen, they're going to be different, right? Because your kid is older, and they already have their own preconceived notions about money, they've gotten old enough. But this is a place to come alongside them, right? And to say, like, Hey, I'm just starting to learn about this, this money, mindset, this legacy. And I realized how much I struggled there places I went wrong as an adult, and I don't want that for you. So tell me like, What do you think about when you think about money? What do you think wealth means? And how can we start to do this together? Because A, you got to make sure you understand what's going on in their head, don't assume you know what they think about money, because it probably is different. They've learned from their peers, and from books and from media. But also, if you want to establish that growth, mindset, that curiosity, that critical problem solving that Jamila was mentioning earlier, you have to show them that that continues through life that you don't have it all figured out, and that you are still investing in yourself and investing and learning and growing. So it gives them permission to not know the answer and to come with you do when they don't know the answer to come to you when they make mistake. That's so

Jamila Souffrant 43:01

key is to like show them like I'm human too. Like I know, you see me as like, perfect or you know, but you're you're starting to see my flaws. And you get mad at that. I find that when I hear especially older kids, and if they're like upset at their parents, it's just like they forget that their parents like, are still humans evolving. And I think to be honest with yourself, to be honest with your kids about what you don't know about what you're figuring out, like it's okay to be vulnerable with them and to have the money conversations. And it's okay to make mistakes. Like I know, like you said, I'm so glad you brought up for the parents with older kids, or someone who has not talked talked about this yet. It's like it's never too late. It's never too late to start the conversation, even if maybe you have an older kid. And you're like, all right, like even like older, like they're like in a 20s You know, like 30s? Maybe? Who knows? And, of course, I think you approach it differently, because now they're adults, you know, there's, there's always should be respect, right? But like, there's a level of, let's have these open conversations about this last thing, because now I'm thinking about, like, if you are a young adult listening to this, and you realized that maybe is there's like almost like parenting up if you were parented, or the way you parent, and you're trying to change and break generational curses and things that you want done differently. What is your advice for like someone who's listening who has parents who is like, you know, now it's like, they're currently parenting their own kids, but they're realizing that there are things that their parents are actually still doing, quote unquote, wrong with their money? Is there a way to approach those conversations? And I know that's probably a whole nother episode, but, but now I'm like, alright, well, how do you as a kid, like talk up or parent up to your parents who need this kind of love?

Chelsea Brennan 44:39

So if you're new to this, the first thing I would do is really look at your money story. So think back of like, what are your pivotal memories you have about money from when you were a little kid? What How did you see your parents interact with money, and really do some work on what did you take away from that? So where did your money mindset come from? And where are some of those limiting beliefs that you're still struggling with? The reason I say that is that when we're new to this, we can get really upset with our pants. I have like, I can't believe you didn't teach me this, or I can't believe you did this. And it made me think that right. And that's a hard way. And so you have to do a little bit of your own healing on this stuff before you can really approach your parents in a way that's going to be productive. The next thing is, is not, you know, telling them what to do, I think a great place to start the conversation is, hey, I've been thinking a lot about what I want to teach my kids about money and what I want to believe about money. And I'm just curious, like, what were you trying to teach us? And because what you took away from whatever they were doing, they might have just gotten it off base, right? Or you as a kid with limited perspective, took it a different way. And so ask them, What were you intending to do, and use that as a starting point of like, hey, that's really interesting that you wanted me to, you know, have this creative problem solving this abundance mindset when I always, you know, I took away that we never did XYZ and started from a conversation of like, mutual understanding that you, as a parent or a future parent, realize that we don't get it right sometimes, and that that's not a it's not a like, value judgment, it's a good place to start the conversation when it comes to actually the choices they're making, how they're investing, how much they're saving for retirement, I think other than sharing what you're doing and presenting them with resources, it can be really hard to parent up in that way. And for them to feel like you're telling them what to do. It's a major dynamic shift that even when your parents really get older, and you're dealing with transition of care, that's a whole different level. But yeah, presenting resources is a great way. So one of the things we've seen is really successful as you hear a podcast episode, you read a book just forwarded to your parents don't even give it any commentary, like, Hey, I thought this was really interesting. Maybe you would like it, and let them start the conversation if they are open to having that conversation with you.

Jamila Souffrant 46:37

Right, right. It's that unique challenge that sandwich generation, right? Where like, you're in the middle and you have parents that you may have to take care of in the future, and then you're taking care of your kids. Oh, alright, so this was such a great conversation. I want you to tell everyone about the mamas talk, money Summit, what they can expect that they attend and the dates again, and where they can sign up?

Chelsea Brennan 46:57

Absolutely. So Mama's talk money, the legacy leave is a three day all online live conference. And so we're going to have six keynote talks, nine panels, Jamil is going to be on one of our panels on Friday. And then every day, we're really excited about this gonna make the specials we're doing a 90 minute zoom group workshop. And so we're going to talk about what are your family money values? What do you want to teach your kids? The next day, we're gonna talk about what kind of legacy do you want to leave both for your kids and your community. And then that last day, we're going to take that and put that into the action steps you have to take today to start taking today to make that happen. So you're going to end the weekend feeling like you have an actual plan. We have 1000s and 1000s of dollars of giveaways, we're gonna have a ton of fun, but that's what you can expect some weekend there will be replays available. So if you can't attend one of the days you can attend the whole weekend, you'll be you'll have 30 days of replays, but it's April 8 through the 10th. And we hope to see

Jamila Souffrant 47:44

you there. Yes. And you can get your ticket at journey to launch calm slash legacy. And I'll be speaking on Friday, so I hope you guys can attend if you're watching this live or listening to this live. Awesome. Thanks Chelsea.

Chelsea Brennan 47:57

Thank you so much Jamila.

Jamila Souffrant 48:02

Don't forget you can get the episode show notes for this episode by going to journey to launch.com or click the description of wherever you're listening to this. And you can still grab your jumpstart guide for free to help you on your journey to financial freedom by going to journey to launch comm slash Jumpstart. If you want to support me in the podcast and love the free content and information that you get here, here are four ways that you can support me in the show. One, make sure you're subscribed to the podcast wherever you listen, whether that's Apple podcasts, that purple app on your phone, your Android device, YouTube, Spotify, wherever it is that you happen to listen, just subscribe so you're not missing an episode. And if you're happening to listen to this and Apple podcasts, rate review and subscribe there I appreciate and read every single review. Number two follow me on my social media accounts. I'm at journey to launch on Facebook, Instagram and Twitter. And I love love love interacting with journeyers. They're three support and check out the sponsors of this show. If you hear something that interests you, sponsors are the main ways we keep the podcast lights on here. So show them some love for supporting your girl for and last but not least, share this episode this podcast with a friend or family member or co worker so that we can spread the message of Journey to launch. Alright, that's it until next week, keep on journeying journeyers

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Chelsea Brennan, hedge fund investor turned online entrepreneur, joins the podcast to discuss the idea of creating a legacy and passing down generational wealth that goes far beyond any monetary amount. 

Chelsea is owner and founder of Smart Money Mamas, a brand dedicated to helping moms make their money work for them and embrace their ambitions, which includes showing them how to cultivate a healthy relationship with money for their families now and far into the future.

In this episode we discuss:

  • Why generational wealth goes far beyond money 
  • What does it mean to create and pass down a legacy
  • How do you cultivate a legacy for your family, your children
  • Instilling problem solving and a growth mindset in your children
  • The importance of setting money values and a family financial ecosystem + more

Watch on YouTube here

Episode 263- How to Create A Legacy & Pass Down Generational Wealth Beyond Money With Chelsea Brennan Click To Tweet

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