Parenting is hard, and children don’t come with directions. In this episode of The Agent of Wealth Podcast, host Marc Bautis is joined by Rachel Murphy, author of I Am Not Your ATM: A Practical Plan for Teaching Your Teen to Manage Money. Together, they discuss how to teach teens a variety of financial lessons – like how to avoid debt, how to create a budget, how to invest, and so on. Murphy, a parent, youth director and mentor to young adults, brings her expertise of teaching life and leadership skills to teens and their parents.
In this episode, you will learn:
- The importance of financial literacy.
- When to start teaching children about money.
- How to teach financial literacy.
- How to have conversations about college costs with teenagers.
- And more!
Resources:
rachelmurphycoaching.com/agents | I Am Not Your ATM: A Practical Plan for Teaching Your Teen to Manage Money | Raising Confident Teens Podcast | Bautis Financial: 7 N Mountain Ave Montclair, New Jersey 07042 (862) 205-5000

Disclosure: The transcript below has been lightly edited for clarity and content. It is not a direct transcription of the full conversation, which can be listened to above.
Welcome back to The Agent of Wealth Podcast. This is your host, Marc Bautis. On today’s show, I brought on a special guest, Rachel Murphy. Rachel has worked with young people for almost 25 years as a youth director, a foster parent, a mentor to young adults and a mom to five children. Through the years, she became more aware of how teens are lacking easily self-taught skills that would help them as they launch out on their own.
Rachel is the host of Raising Confident Teens Podcast, and the author of the newly released book, I Am Not Your ATM: A Practical Plan for Teaching Your Teen to Manage Money. Rachel, welcome to the show.
Marc, thanks so much for having me.
That’s one of the most creative titles for a book I’ve heard. How’d you come up with it?
I’ve just heard a lot of parents say, “I feel like I’m my kid’s ATM.” I guess eventually we’ll have to change it to, “I’m not your Venmo,” because teenagers are not going to know what an ATM is.
True. So, I’m excited to talk about financial literacy for teens – it’s something I’m really passionate about. Why is financial literacy so hard to grasp? Is it that no one knows where to find the information? I know finance is not always taught in school. How did you come to address this problem?
The Importance of Financial Literacy
Money has always been taboo. In earlier generations, financial literacy for teens wasn’t a big problem because teenagers couldn’t get into too much trouble. They didn’t have credit cards, so when they ran out of money they just stopped spending. But then our generation came along, the first generation to have credit cards coming out of college.
Our parents, even the ones that taught us about money, didn’t know how to teach us to navigate credit cards and what they really cost – when interest is accrued.
A lot of our generation had to figure it out on our own, and it cost us hundreds of thousands of dollars. Digging out of debt is hard on your marriage, hard on your family and hard financially. But also, you lose out on years that you could have been building wealth.
Is the teenage years the right time to stay teaching financial literacy?
When to Start Teaching Children About Money
I think you should start teaching children about money as soon as they start talking. Little kids love money – they know it’s important, and often they want to play with money. But, of course, they can’t grasp the bigger concepts until they’re older.
With our little ones, we started by teaching three categories: savings, giving and spending. That’s a great starting point, but as they get older they need to be taught that there’s more to money than those three categories alone – they’ll be bills, necessities, unexpected expenses, etc. when they grow into adults.
I teach by gradually introducing new topics or issues. Such as, how do I plan for something that I don’t have to pay for every month? (Like a car insurance bill)
So how do you do it? Do you pick a concept to start with, and then build on that?
How to Teach Financial Literacy
We teach it as practically as possible. Most teens, in my experience, will not absorb information from a lecture. They want to know how something relates to their life.
So, in our family, we teach by turning over parts of the budget to the children, beginning in fifth or sixth grade. They’ll start with something small. For example, let’s say your family gets ice cream every week. Instead of mom or dad paying for everybody every time, assign your child an ice cream budget. They will get funds for the budget once a month – at the beginning of the month – and they are solely responsible for managing the money for the whole month.
It’s good to start with something small like that, that way if they make a mistake it’s not a big deal. It’s not going to damage for years and years – like a credit card can.
Once your child is able to handle that, add more categories and more money to their budget.
So basically, you’re redirecting money that you’re already spending on them to them, but letting them manage it and have the control.
Yes.
What about the income side? Are they responsible for creating the income by doing some kind of work, or are you just allocating your income towards the budget(s)?
Allocating our income. We take what we’d normally spend on them and put that money in their budget. If your listeners are not sure how much money you spend on what, the link to my website will include a spending tracker that parents can print out and use.
Great. So let’s take the example of ice cream. You go for ice cream, let’s say, once a week. It costs, say, $20. For the month, do you put $80 in your ice cream budget and they figure out how to use it? Or are you specifically saying every week that the budget is $20?
The latter.
And then do you build on that? Maybe in a couple months you hand off another category? Let’s say it’s clothes. So now the kid has to figure out, do they want more ice cream? Or should they forget about ice cream and buy two pairs of jeans?
Right, yeah. For example, we used to go out to eat once a week. So for years and years, we had a restaurant budget. Having five kids, eating out can be a big chunk of change. Over time, the kids started getting water to drink. I felt bad, because that’s probably not what everybody wanted, but once they start getting an allotted amount of money, they began spending less to save for something else. They were also responsible for paying with their own debit cards, including the tip.
You mention debit card, not credit card. What are your feelings on teens having credit cards? Is a debit card better for this exercise, or is it your belief that they’re better in general?
Credit Card vs. Debit Card
Well, we have a progression. We start out with cash when they’re little, because at that age they can’t conceptualize plastic. Then we transition to debit cards. Our bank allows debit cards at 8-years-old, which is young, I think. My kids get their monthly income from us for all the stuff they buy (to their debit card). We also allocate money to their savings, 10% of it.
Once they turn about 16, I put them on as an authorized user on my credit card – that way it’ll start building their credit. But they only use my card if it’s a purchase I would make, like at the grocery store.
By the time they graduate, they get their own student credit card which they start using for small stuff.
‘m not anti-credit card, but we did go through a tough period – about 10 years – digging out of debt, where we did not use credit at all. Credit is important, whether it’s to get an apartment or a cell phone. It’s a part of life.
What has the feedback been from your kids on this method of learning about it, do they even realize it?
They love it. My kids tell me they’re going to do this with their kids, because it makes them feel like adults. It’s taught them a lot of lessons.
So usually kids learn from two areas, school or thome. I’ve been hearing for a long time that financial literacy should be taught in school. In some areas it may be, but it’s not widely taught. Why do you think that is?
Why Financial Literacy Isn’t Taught in All Schools
Well I think one of the issues is that schools can’t find people to teach financial literacy. If you look at the statistics, the average person can’t come up with $1,000 for an emergency.
Plus, financial literacy isn’t tested, at least it’s not in our area. In my opinion, money management is one of the most important skills to master, because no matter where you live, who you marry or what job you have, you have to be able to handle money.
Now, the other thing that’s important is investing. Do you teach that to your children too?
Yes, we talk about it. We’ve showed them a projection of if they invested X dollars a month, how much money they’d be expected to have in 40 years. And my kids do invest – the oldest has a Roth IRA, and my 14-year-old likes to do individual stocks, which we don’t really encourage, but it’s been good for him because it sparks his interest.
That’s great. So you mentioned that your children have had a lot of success with the financial literacy lessons and tools, but nothing is ever a straight shot up. What are some of the challenges that you’ve had using this methodology?
How Parents Can Overcome Challenges in Teaching Financial Literacy
Well, like I mentioned, sometimes budgets need to be adjusted. Sometimes expenses come up that you didn’t think about. For example, my son is the manager for a basketball team. I thought he was just managing the JV, but it turns out that he’s managing both the JV and varsity teams. So, the money I allocated for food – which he eats at the games – was miscalculated because he was attending more games. Things like that.
But most issues are figure-outable, as long as you are committed to this.
Remember, these lessons are going to benefit your children for the rest of their lives. However you choose to teach financial literacy, it needs to be taught, right? Don’t kick the can down the road because you’re worried there might be a learning curve, or that it’ll be challenging.
Do you ever come across parents who say, “My kid is smart, they’ll figure it out”? Or is it more common for parents to try to teach these lessons, but struggle with sticking to the discipline and/or implementation?
I think most parents are just unsure of what to do. They want to help their kids, but they don’t know how. That’s how parents feel about a lot of things, right? We’re all just trying to figure it out as we go. Children don’t come with instructions.
Yeah.
And I think that’s where we, as parents, really need each other. If we come up with something good – like I feel I have – we need to help each other by sharing it.
Yeah, definitely. Now, you said your oldest was what age?
24.
24, okay. Is there a point where you feel your job is done? I’m asking because I envision a college graduate – who is no longer a teenager – entering the “real world,” so to speak, and still needing lessons on finance, responsibility, etc. Now that your oldest is out of college, have you come to the point where you’re no longer helping out?
Well, it’s different for every family, but in ours, the children are on their own after college graduation – unless there is a major problem. So our oldest is totally independent. He pays all of his bills, he got a life insurance plan, he has his own health insurance, etc.
That’s what we’re working towards with all of our children. But, as a parent, I’m always going to ask what’s going on and be interested in their life, and even want to help.
The goal is to get them to support themselves and be confident in their own ability.
Makes sense. You said you went through this process with all five kids, right?
Well, the youngest is only eight, so four of them so far.
Did they all grasp the concepts and react the same? Or were there differences between children?
Kids are all so different. They can be raised in the exact same household, but think differently about so many things. One of my children is a big saver. We have a deal with our kids that we’ll match what they earn for a car, up to a certain amount. So the saver in my family squirrels away everything she possibly can to the car fund.
We have other children that like to spend a little more – so their car funds are a little skinny. Some are more entrepreneurial, and have their own businesses.
And just one has gone through college?
Yes, one graduated college and one is a freshman in college now.
How to Have Conversations About College Costs with Teenagers
At Bautis Financial, we do a lot of late-stage college planning. One of the things we note is the dynamics between parents and children, as far as deciding on what college to attend. Some parents let their child(ren) pick any school, and they’re left to figure out how to pay for it. Others put their child(ren) on a budget, so to speak, telling the child how much the parents are willing to contribute to college. Then, if the tuition and fees go over that, the student(s) are responsible for the difference. How did your family tackle college planning?
My kids all wanted to go local, in Florida. We have something called the Bright Futures Scholarship Program here, which establishes lottery-funded scholarships to reward Florida high school graduates for high academic achievement.
That program has been extremely helpful for my children. My oldest lived at home and went to school on that scholarship, paying out-of-pocket for part. My daughter, who is a freshman now, wanted to move out. She lives with her oldest brother – renting one of his rooms – and works a part-time job to pay for college.
Every family is different, that’s why it’s called personal finance. That said, I don’t recommend parents encourage their children to just “go wherever.” In that case, kids could pick the school based on the football team, or the school colors.
Our oldest kids went through career coaching, which I feel was really valuable. It helped them figure out what they were passionate about and what skills they had.
Career coaching, is that something they do in your local high school?
No, I found it through our podcast – a listener recommended it. I think it’s becoming more popular. Colleges are realizing that they’re accepting students who have no clue what they’re doing, so it’s mutually beneficial.
And in your experiences, has it been worth it?
Absolutely. It costs something like $500-600. But my thought was, ‘If that saves me one college class, it’s worth it.’
Definitely. Who really knows what they want to do at 18-years-old?
It’s totally overwhelming. I couldn’t see getting into a huge amount of college debt over that. Certain careers, maybe. But if you can go local – to a state college – do it. For most jobs these days, the degree matters much more than where it came from.
Yeah. I know you mentioned you have the book and podcast. Do you also coach parents and children through this financial literacy progression?
I don’t, but maybe I should.
Yeah. The reason I ask is because books and podcasts can be a good place to pick up knowledge, but some people struggle with the implementation. People can read a book and learn a concept, but having someone to hold themselves accountable to following a strategy is effective.
That’s a good point, Marc. I should do that.
And do you have another book planned?
Not right now, that one was a lot of work.
Alright, well we’re just about out of time. Rachel, I want to thank you for being on the show. How best can someone learn more about your book, podcast, reach out to you, find out more about you?
If you go to rachelmurphycoaching.com/agents, I’m going to have a page just for Marc’s listeners here.
Awesome, we’ll link to all that in the show notes. Thank you again for being on the show. And thank you to everyone who tuned into today’s episode. Don’t forget to follow The Agent of Wealth on the platform you listen from and leave us a review of the show. We are currently accepting new clients, if you’d like to schedule a 1-on-1 consultation with our advisors, please do so below.