Kavita Kamdar:
I've been hearing a lot of moms and dads just be very grateful for the fact that they're able to now have organic conversation with their children around the notion of spending versus saving.
Sam Saperstein:
Welcome to season five of the Women on the Move Podcast. I'm your host, Sam Saperstein. In this season, we're giving our financial health a checkup with some phenomenal women giving us the prescription for financial wellness. We'll speak to experts on how to educate your children about money, how to address debt and how to save for home ownership. It's a master class on understanding and managing your money. Teaching kids about money is complicated to say the least, but a new product from Chase has set out to make the task a little bit easier. Joining me first is Kavita Kamdar, the head of business development for the consumer bank. And she'll discuss financial education for children and the recently launched First Banking product. Later, Sarah Treece, a branch manager for Chase, will join us to share her experience with First Banking. I hope you enjoy our conversation. Kavita, thank you so much for joining us on this podcast. It's great to have you here.
Kavita Kamdar:
Thank you so much for having me. I'm excited to talk about kids and their finances.
Sam Saperstein:
So I understand you are about to become a mom, congratulations.
Kavita Kamdar:
Thank you.
Sam Saperstein:
That is very exciting. So what kind of money lessons do you think you're going to teach your children? What's going to be the most important thing to you to convey?
Kavita Kamdar:
My husband and I were just talking about her 529, which for those that don't know, that's a tax deferred savings account for college. So one, I am myself thinking through all these new decision points. As I've been in this space for children and family finances for the past couple of years, I've thought a lot about what would I want to teach my own children. And there's two things that keep coming to mind, is the value of a dollar. We're so lucky, my husband and I to have steady income, but my fear is this child is going to take that for granted. And so a big part of everything we've talked about today, Sam, is this idea that money doesn't grow on trees and the idea of a dollar goes far, it's not about how much you earn, it's how much you save, is so critical for me and for my daughter to learn at a young age, that people work hard for money and saving it is going to get you much further than just earning a bunch of money.
Kavita Kamdar:
That's one that I've been thinking a lot about. And then the other is the idea of just values. What are your values around money? What makes you happy? Don't be tied to money, is the point. Pursue your dreams, but don't be tied to money because it doesn't give you happiness, but make right decisions. Right? And that's sort of the balance I want to strike with her. It probably sounds beautiful and it's going to be much harder to do, but...
Sam Saperstein:
So here's a question about teaching kids different lessons about money at different ages. What do you suggest parents start out with when they're teaching, maybe their younger kids? And then what kind of topics would you introduce over time as they get older?
Kavita Kamdar:
75% of parents are looking for help with their kids' budgeting and expenses. So when you just think about everyday spending and the fact that your kids are out there interacting digitally or interacting in the school, I would say the first thing that probably will pop with your child is how much are you trying to spend and how much are we trying to let you spend as a family? And so the first step I think that's really critical is to just do a quick level set on what are your child's spending goals. Your child might be trying to buy AirPods, but that's a long-term savings goal for them.
Kavita Kamdar:
So those go hand in hand and just core finances, this idea of spending and saving. When you learn to drive, you don't learn one thing, you don't just learn how to accelerate, you also learn how to break at the same time. It's the same thing when you start doing these milestones with your child, where you want to talk about budgeting and expenses, but you also want to talk about the flip side, what are your savings goals? So you can look at things a little bit more comprehensively.
Sam Saperstein:
So I'm wondering if you think kids should learn by making mistakes. In other words, as parents, should we let them go out there and make mistakes with money so that they learn things? And if so, what's a safe way to let kids experiment with their money?
Kavita Kamdar:
The idea of letting someone fail and learning is very intriguing, and a lot of research has shown that that is an interesting way for children to actually learn and reinforce the lesson learned versus from the parent. So I would say, to answer your question directly, there is a responsible way for kids to explore finances while you're still instilling the right morals in them. So whatever your moral is in your household, I'm sure you'll embody and live it as parents, but letting your children as unique individuals also explore their own safe zone, I think is very important when it comes to finances or anything, but specifically finances, because they will eventually be making their own decisions, where you give them five bucks and you think they're spending it on lunch, but they might be buying and trading cards with their friends. And so I think for them to learn is very critical, and make mistakes themselves.
Sam Saperstein:
You are reminding me that when I was growing up many years, my mother would say before the school season started, "Okay, we're going to go get you some new clothes," at this giant outdoor flea market near where I lived on Long Island. And she would say, "Here's your budget for the day and be careful how you spend it. Don't spend it all too soon, because you might want other things throughout the day." And of course I was just so excited to have money I could actually spend, that I did spend it in the early part of walking through these aisles, on whatever I saw.
Sam Saperstein:
And then we'd wind up walking through another part of the flea market, toward the end of the day and I'd find the best t-shirt that I really, really wanted, and it was going to be the best part of my collection, but I had no more money to spend. And she really helped me to that. She would say, "Well, I guess next year you're going to remember to save it for the end." And I remember feeling like, oh no, how did I do that? I knew I should've waited, but it was too tempting. So I hear what you're saying, and maybe that's a lower risk way of doing things with children.
Kavita Kamdar:
I love that example, Sam, because your mom stood by her guns. She had a lesson she wanted you to learn, one way or another, but she let you fall into that lesson, and I think that's really critical. The fact that you remember that memory so interesting, I'm sure it's shaped your financial decision-making in your life, because you realize instant gratification is not maybe the best, right? And so I love that example. I think it's spot on with how we can empower the next generation to make better decisions.
Sam Saperstein:
So another tool that many parents use is of course, giving children allowance, some sort of weekly expenditure, maybe for chores that they do. What's your sense of that? How do you feel about allowance as a tool?
Kavita Kamdar:
62% of adults say they learned their financial habits from their parents or their family, the core community they live in. And so I grew up with an allowance. I did not get paid for chores, I was expected to just do them, but I did have an allowance. And I do think a lot of households in the U.S. and globally have this idea of a barter system with their children, where they give them some amount of cash, whether it's for duties they've earned or just as a way to start gaining independence and learning about finances. And so I love the idea of allowances because it allows you and your child to start having dialogue around responsible spending of money, the discussions of where's the money going and this idea of adulting. And so eventually we all get paychecks and we have to make decisions on how we spend that money. So I love this idea of introducing children and teenagers to money that's theirs to make decisions around at a young age.
Sam Saperstein:
What age would you start at? Is there such a thing as sort of too young and how do you think about the amount to give kids?
Kavita Kamdar:
It's hard for me to say, but what I've seen a lot of parents say, it's like eight feels right. And now we're in a new age where kids are using seamless payments, so they are going online, Fortnight, they're gaming on Robolux and they're using their parent's credit cards at the age of seven, eight, nine, 10. And so to me, if they're having the ability to purchase anything, they should also have the ability to make decisions around money, and be taught at a younger age before they start falling down a path that potentially we don't want them to be on. So I think from everything I'm seeing, seven or eight, which might feel young, could be the start where you say, "Look, I'm going to give you $5 a month." They're in middle school, they're likely buying lunch, they're likely buying digital gaming currency, so talking to them about that at young age just feels right with what children are doing at seven and eight now.
Sam Saperstein:
Are there any online tools or games that parents can use to prove this point, that money is not an infinite resource and they really need to be careful with it?
Kavita Kamdar:
Yes, there are. Scholastic offers some great learning that's open for anyone to learn about finances. Again, what we've learned with children is they learn best by example, and so if you can stimulate this environment where they get cash digitally, and then they're spending it on their goals and they're setting goals, Scholastic has some of those tools. So I love tapping into Scholastic because they're a proven leader in the education space. And then we at Chase are starting to commit to the family finances, and if you go to our website on the chase.com/student, you'll see that there's some great tips for parents to have the conversation with their children too. So a big part of this is not just the children's self-learning, but you sitting down in a family environment and, again, going back to what you were principal and ethos is in the household around finances.
Kavita Kamdar:
And so there's some great tip sheets on how parents can sit down and talk to children around the ABCs of credit versus debit, depending on what you want to talk to your child about, the idea of setting savings goals. So we have some neat things ourselves on the Chase side, but there's also a ton of nonprofits out there that really focus on empowering children. And so wherever you are in your community, if you are connected to nonprofits, they offer a ton of great resources for children to learn about their finances, and for you as a parent to feel comfortable having the dialogue with them as well.
Sam Saperstein:
Yeah. I think having those tools are so important for parents to take the time to think about what they want to convey, what values around money they want to actually share with their kids, because maybe until that moment, they hadn't really thought about that. But once your kids are old enough, I think that's incredibly important. Well, let's talk about the things you've been working on for other people to take advantage of when it comes to helping teach their children about money, specifically at Chase, which has rolled out something called First Banking as a new tool to help children understand money better. So tell us about this product and how it works.
Kavita Kamdar:
Yes. So First Banking is a digital product that we launched this year and it's free. So that's one thing we felt strongly about, you shouldn't have to pay to learn about finances. I was very lucky to grow up in a household where very critical lessons were shared with me, and I hope my daughter has the same, it sounds like you grew up similarly, but not every child has that opportunity and not every parent has the time to do that. And so this tool really helps bridge that gap, and I think in this new digital age, I'm sure it's that much harder to sit down and talk to your child about certain things. So this product is digital and free, it's a checking account that's for your child, and they get a debit card with it, but it's controlled by you as the parent.
Kavita Kamdar:
So you, as the parent have the chance to go into that Chase mobile app and set allowances, assign chores, decide if you want them to spend $10 at Fortnite or zero. So you can set spending categories and it goes back to this idea of budgeting and instilling that lesson at a young age. And then savings, so goals, I think that's so critical for kids to learn and so Chase First Banking lets children set savings goals, and they start to now have this full picture, it's almost like a mini adult with a paycheck coming through allowances, then a budget on the spending side and then some savings goals. And so they can start doing needs versus wants subconsciously through this product.
Sam Saperstein:
And so you've described this as a learner's permit, which allows people to learn in a supervised setting, which is great. How do you think people should take this and sort of move up to their full permit, if you will, or their [inaudible 00:12:46]? How do you start with it and sort of go slowly and use it to build up to valuable lessons?
Kavita Kamdar:
What I love about First Banking is, it's already a lesson in and of itself because you're not just giving the $10 allowance and letting them spend it in the [inaudible 00:13:00] at the flea market, not just giving them $20 and saying, "Good job on your chores," putting it into a savings account like I was doing. It's this idea of the full picture. And so when you become an adult, you have to look at the trade-offs, right? You can't just focus on one thing or one day, or one week. And what the tool does is it allows you to have the conversations around the trade-offs, and let me give you an example. In the old world, pre-First Banking, you get an allowance, maybe you'll think about putting it into a savings account, maybe you'll go spend it that day. This one, the only option is to move it into spending or saving, right then and there you're making a decision as a parent or as a family, or as a child around how much of the allowance do you guys both agree on mutually to put into savings versus spending.
Kavita Kamdar:
So when you grow up, you will get a paycheck and you will make a decision right then and there through 401(K), you'll defer some right away and you'll think about, okay, how much of this do I want to have saved at the end of the month or at the beginning of the month? And so it fits very nicely to that paradigm that we all face as adults, which is, it's not just one decision and no impact, there's many decisions coming from one paycheck, bills, retirement savings, immediate needs, wants, utilities, payments, and so this is a small version of laddering into what you will face as an adult when you start getting your first paychecks.
Sam Saperstein:
The reality of life, I love that, it really is going to teach you that. So what kind of feedback have you received from parents about this product?
Kavita Kamdar:
So we've been live for a month and it's been great. So we're seeing mothers, specifically are opening this account, which I love. And they are all over it, I've heard things like, "I've never talked to my kids about finances this way, because it's boring. It's boring for them. It's hard." Now they are proactively going into their app and checking because the child has access to the app and asking around, "Well, how much money of my allowance should I put into savings?" And that's when it starts opening up the dialogue. So I've been hearing a lot of moms and dads just be very grateful for the fact that they're able to now have organic conversation with their children around the notion of spending versus saving. We're also seeing, hilariously, a lot of parents say, "My kids have never asked for this many chores before," because in the app, you can set a chore and pay your child for doing the chores.
Kavita Kamdar:
So I have with my nephew... You could even do something like get an A in school, right? But something as simple as vacuuming, you go check if they actually vacuumed and then you hit transfer money, and it'll transfer the $2 into their account. So I'm hearing a lot of feedback like that, that just makes us smile. And then in general, it's like, "Can't wait to teach my kids these lessons," that I think some parents wish they had learned at a young age. And so a lot of positive reception from the marketplace. So you don't have to be a parent for this one, Sam, which is great too. So we're seeing on social media, aunts and uncles and grandparents, just talking about the idea that they're opening this account and gifting them something and having the conversation with them. So really great and positive feedback and a game changer for children and finances and families.
Sam Saperstein:
It's so meaningful. I love thinking about this as a gift that's going to have so many good conversations attached to it. And tell us about... There's a debit card also associated with the product that children can go out and use. I mean, having children know what to do with a card outside in the world, in stores I think is also very valuable at a young age.
Kavita Kamdar:
They love it. The children love that they have their own debit card with their name on it. So there's this sense of responsibility that comes along with it, that I remember when I had my mom's credit card for a little bit, it's different. It's different when it's your name and it's your thing, you feel a little bit more responsible. So what we've been seeing is kids are taking pictures of them, unwrapping the debit card and holding it, which is so cute. They go in and practice it, they'll look at their app right away and they'll say, "Okay, how much money got taken out?"
Kavita Kamdar:
So it's a great way to sort of bridge that reality with the digital experience, and that's where you can sort of control the spending as well. So on the debit card, we've allowed parents to set those merchant level budgets. So you could have the conversation with your child and say, "Look, you can spend $30 wherever you want," or, "Hey, when you go to McDonald's or the movie theaters, it's only $15, but at school you can spend $30 because you know what generally that cosmo entails versus outside. So the debit card is a great way to start having those conversations around budget and spending, and empowering them. Yeah.
Sam Saperstein:
Literally, if they try to put a little more at the movie theater, it will decline that transaction, it will only let them spend up to a certain amount that you've set.
Kavita Kamdar:
Exactly. Right. Right.
Sam Saperstein:
So good. So how can listeners learn more about this and where can they sign up?
Kavita Kamdar:
Yeah. So if you guys go to chase.com, where all of our products live, it's under the checking account page. Easier, just search Chase First Banking on Google, this is what we all do now, and it'll be the first link that pops up and you guys can go check it out. It's for anyone six and above, six to 17. And then we have other products for when you're in high school and you want to actually start having your own account without your parent attached to it. But I highly recommend parents to think about this tool as a way to talk about everything, Sam, you and I have talked about.
Kavita Kamdar:
The tool itself won't be what changes family finances, but it's such a great catalyst for starting the dialogue with your children and setting them up for success in the future. And I'm such a fan of it personally, and as I was building it, I was also building this child, right? And so I was thinking in my head, okay, what's the perfect product that I would want to give my daughter when she's of age and what are the lessons I want to teach her? And that's really what the whole team at Chase put into the product that folks can try out. It's really child-friendly, it's very easy to navigate and the parents will have full control, so you don't ever have to feel like you're opening doors to areas that maybe you don't want to open with them.
Sam Saperstein:
Okay. So I love this, basically the parent to be has created a money product for parents. So we know it's coming from the right place and you can use it as early as six, which is terrific. So now I'm looking forward to great conversations with my kids and a lot more vacuuming.
Kavita Kamdar:
Yeah. Vacuuming and dishes is what we're seeing a lot of.
Sarah Treece:
I love it. Well, Kavita, be to thank you so much for talking with us about such a critical issue, money for children, but also money as parents and the values that we want to really convey. So we wish you the best of luck with a new baby and a new home, you're really hitting many milestones right now, all at once. So thank you for the work that you've done really to get the First Banking product to consumers.
Kavita Kamdar:
Thank you. And thank you guys for having me on, I look forward to seeing how you guys like the product
Sam Saperstein:
That was so great to speak with Kavita on teaching children about money and learning about the development of Chase First Banking. I wanted to bring this product to life, so I reached out to Sarah Treece, a Chase branch manager based in Ohio. Sarah has been using this tool with her 11 year old son, Gideon. I loved hearing about all the unique purchases that Gideon is saving up for, and I think you will too. Sarah, thank you for being here to talk about your experience with the First Banking product, and particularly with your son Gideon and his experience with it. So before we talk about that, just would love to know something about him. Will you tell us a little bit about him?
Sarah Treece:
Gideon is a funny 11 year old boy who loves Michael Jackson and [inaudible 00:21:00], and he happens to have cerebral palsy, but he doesn't let it hold him back, the kid still goes skiing, rock climbing and loves to play wheelchair soccer. He's a nut job that just melts your heart.
Sam Saperstein:
That sounds great, you're such a proud parent.
Sarah Treece:
I am. He's a pretty special kid.
Sam Saperstein:
You were part of the pilot program of the First Banking product that was offered to Chase employees. You've been using the product since last July. Can you tell me about your experience with this account?
Sarah Treece:
It's been really beneficial for me and my son, especially. He's really learned a lot, it's been really enjoyable for him. Gideon looks at his app and looks at his amount of money that he has to burn through his little wallet every single day.
Sam Saperstein:
That's great. So he's already looking and using this account and trying to see how the money works, so to speak?
Sarah Treece:
He does, he really kind of looks at what he wants, he'll look at something online that he sees or an advertisement for something, and he'll look at his account and go, "Okay, well I have this much money, that means I have $2 left over. I could buy this if I want it to." And so he's very into his account. It's been really beneficial for him, not just his math skills, but his knowing the value of a dollar.
Sam Saperstein:
And did you start off with any goals for him, any savings goals or any spending goals?
Sarah Treece:
So Gideon is a very unique 11 year old boy. He was saving for a Bissell handheld vacuum that was $45.
Sam Saperstein:
Wow.
Sarah Treece:
He saved that in record time too, took him about a little less than a month to get all that between his allowance and some additional chores that he was begging me for, because he wanted this vacuum to help around the house, he says,
Sam Saperstein:
I love that we did hear that from Kavita, that children are asking for more chores to actually earn money, so that is the upside in all of this. So he wanted the vacuum to do more chores or does he happen to just like things really clean?
Sarah Treece:
Both.
Sam Saperstein:
You've taught him well, that's really good. How did the First Banking product help you teach him those lessons? Did you want to teach him some of these things beforehand? And was it just a way to help you get there? What was your experience?
Sarah Treece:
We have been trying to teach him money and the value of a dollar for a while. Gideon has some learning disabilities and some developmental delays, and so this was a lot easier to teach him because he didn't see the money in a jar, he saw the set number that he had. And so that kind of made things more concrete for him, and it made it more real. That really helped us kind of explain, "This is how much you have to save, this is how much you have to spend." It really solidified us being able to teach this lesson to him about finances and how to earn, save, and spend money wisely.
Sam Saperstein:
And then I love your story about how, if he knew he had $2 left to spend that, it could focus him on what he could afford.
Sarah Treece:
Yes. And he's actually been wiser about choices that he wants, and looking for deals and coupons. So like I said, I have a unique child. He loves to buy cleaning products. I got nothing, but he went to target one day and he was looking between Gain Fireworks and Downy Flings, and well, the Downy had the sale and if he bought two of these Downy's at this price, he got a $5 target card, he would have never thought about that before. He would have just gone in, picked whatever one he wanted and got out, but now he's looking at it, "This is my money and I want to make the most of it." So he really sat there strategizing about the best way that he can get more bang for his buck and to look at those prices and everything, it was really kind of funny debating between fabric softener.
Sam Saperstein:
I love that, that he really loves the cleaning products, as well as the choice. I love that. So tell us about any other features you found to be helpful, particularly the allowance feature.
Sarah Treece:
The allowance feature is really nice. We designate, for us, 60% of his allowance every week goes into spend and 40% goes into save. He knows that if he doesn't do his set chores, like feed the dog, brush the dog and keep his room clean, those are our set established, that he's going to get deemed. And so he could lose out on some of his allowance, it could drop a couple bucks or he could not get it at all if it's a bad week. So he usually does a good job., And then he'll ask me for additional chores, like doing the dishes.
Sam Saperstein:
So I was going to ask if there has been a bad week and he hasn't been able to earn that.
Sarah Treece:
I usually just threaten that, all I have to say is, "Do you want to get your full allowance?" And then he goes right off and does his chores.
Sam Saperstein:
Okay. I'm glad to hear that. That sounds like a very familiar refrain in our household too. When you were agreeing to sign up to be part of the pilot and learn about this, what was your original motivation and goal for being part of it?
Sarah Treece:
Honestly, it was that money counting issue. He has such a hard time with it, we've been working with his therapist and the school with counting money, knowing that there was this disconnect, because we do learn visually, being able to see things is a lot easier to learn and guide. And so when he got that card and he saw his money in the account, it literally just [inaudible 00:00:26:22], it clicked for him. He was able to connect that these bills, when they go into my account, they equal this and I can use my card to send it, and I use my card to do this, I can use my card to do that, really kind of made sense to him a lot. It wasn't just money he was saving in the jar, it wasn't just pieces of paper, because teachers made them count, it was his.
Sam Saperstein:
Yeah the way you're describing it is, it feels like more of a cycle of money versus when you just put it in your piggy bank and it stays there for a while. You put it in, you spend it, it comes out, you earn more, and so you can start to really see how these things build over time.
Sarah Treece:
That's one big thing I really like about that too. He's learning that he has to work for it. When mommy and daddy go to a job, we're there working so we can buy things for him. So when he asks for things, when we're out and about, we go, "Well, what's on your card?" "I don't have that." "Well, kid, neither do we. So you got to earn it."
Sam Saperstein:
So what would you say to other parents who, it hadn't dawned on them yet to start teaching these things to children at that age, or may think their children are too young to pick this up.
Sarah Treece:
They're not. They're not too young to learn how to do this. We started early, trying to teach him when he was little with three jars, he has a spend, save and give, and this is very similar to that. And it just kind of puts us in a spot where they can actually have more control over it and they can learn those lessons more in depth so that they can see their savings account grow, they can set their goals, they can actually see those goals and see that little bar grow as they get closer towards it. And then they can see their spending, and as a parent, I'm not going to lie, it's kind of nice to select where my kids can spend their money. You have a little bit more control over them and their spending, but at the same time, they think they have more independence and they're able to learn the consequences for their actions that they spend, overspend and do too much.
Sam Saperstein:
That control is so helpful, but giving them the ability to think that they're managing it is perfect, wish we had that in other areas of life. We've talked about what he likes to spend his money on. Where does he like to give his money? Do you talk about charitable areas where he could give?
Sarah Treece:
So we're big supporters of the [inaudible 00:28:33] Children's Hospital. They've changed our lives, so he likes to donate to that and help. Child life is one of his favorite areas. He jokes, "They make the hospital feel like a hotel." And so he likes to give back to the hospital hotel and to child life, so other kids can have fun while they're getting medical treatment.
Sam Saperstein:
That is really sweet. He has a very big heart.
Sarah Treece:
He's a cute kid.
Sam Saperstein:
Well, thank you so much for telling us this story and really your experience, it sounds like it's a wonderful way to teach him and to bond over this.
Sarah Treece:
It's been really fun.
Sam Saperstein:
I want to thank Kavita and Sarah for joining me to discuss this important topic. I am so excited to explore Chase First Banking with my own kids. And I encourage everyone to visit chase.com/firstbanking and find out more about this great tool. The mission of Women on the Move is to help women in their professional and personal lives. Our goal is to introduce you to people with great ideas, inspiring stories, and a passion to make a difference. If you enjoyed this episode, please rate, review and subscribe, so you won't miss any others. For JP Morgan Chase's Women on the Move, I'm Sam Saperstein. JP Morgan Chase Bank, NA is a member of the FDIC.