How to Talk With Parents About Money | Series 3.1 - Enjoy More 30s: Family Finance

Episode 1

How to Talk With Parents About Money | Series 3.1

Published on: 17th May, 2021

Being able to talk to you parents about money may be more important than you think.

  • Wanting them to make the most of their money (01:29)
  • Your parents likely come from a different money perspective than you (05:36)
  • Ask basic financial preference questions without giving your input (06:46)

Quote for the episode: "The goal is to start a conversation, not tell them why they're wrong."

Securities offered through TFS Securities, Inc., Advisory Services through TFS Advisory Services, a SEC Registered Investment Advisor Member FINRA / SIPC. TFS Securities, Inc. located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.

Transcript
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Welcome to the Enjoy More 30s: Family Finance

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podcast, the only podcast dedicated to making life more

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enjoyable for young families by hitting on the financial topics

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that tend to weigh on us, stress us out and distract our focus

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from simply enjoying life.

Joseph Okaly:

Hello and welcome to the next series, which I

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really can't help but be pretty excited about for a couple

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different reasons here. This series itself is called "Your

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Parent's Money Mindset". And in it, we're going to tackle a

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number of aspects to help you address many times what's the

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elephant in the room, when it comes to your parents and money.

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Parents and money can be one of the most challenging scenarios.

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We are probably closer to them than most anyone else in the

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world, however, many times money might as well be spelled

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t-a-b-o-o, taboo. The biggest reason why this can be

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challenging is because it generally doesn't come up until

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a crisis hits. Mom or dad can't make their own decisions, maybe

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should no longer be making their own decisions and don't know it,

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or ran into some kind of an escalating expenses or health

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may have declined. All of which can eventually hit their

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children squarely in the face. Obviously 100% on board for

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helping the people that you know raised us, took care of us, put

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food in our mouths, put us on this track, this path to where

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we are today. But that doesn't mean the best time to start

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helping is when a crisis hits.

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The other aspect is really the opposite of that coin. Parents

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don't really know how much they have or what that translates

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into kind of many times and that's really the whole theme of

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this whole podcast. It's really not just them, it's everybody

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when there's not a financial education kind of prerequisite

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that's provided to all of us in school or growing up. And that

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manifests in either not living their own lives to the fullest,

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or maybe not really realizing that they're going to pass with

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a lot more money in their pockets than they expect. So

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when we speak with clients and show them what path they're on,

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many times we literally have to tell them, "If you continue to

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do what you're doing right now, you are going to die with a lot

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of money in your pocket. Is that your goal? Is that what you

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would prefer? Or would you rather get to share it with your

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kids now through vacations, gifting, or anything else and

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see that smile on their face when you're still alive." And so

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in 13 years now, I've yet to have anyone state the goal was

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to have really big stuffed pockets on their way out.

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If your parents always had money for whatever you guys may have

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needed, not that they were frivolous at all, but just you

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know, dance camp came up, they somehow found money for that.

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You had to go to college, they kind of somehow found money for

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that. You needed a car, they somehow kind of found money for

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that. You had braces, they somehow kind of found money for

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that. And if that was kind of how your parents mentality was,

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where they were kind of careful with money but they always were

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able to come up with whatever they needed, many times that's

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kind of the blueprint for this type of a person. They got to

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where they are today by being a little bit more on the frugal

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side overall, very careful with their money, making sure that

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they had what they needed. So now when they're retired, and

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maybe they have more than enough assets to be a little bit more

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free with more enjoying life with, it's hard to just flip a

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switch and say, "Okay, I spent the last 40 years really being

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careful with every penny. And now all of a sudden, I have this

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freedom to kind of spend." And it's not something that happens

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overnight. For us, it might take three, four or five different

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meetings with people to really convince them that, "Hey, you

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have this extra money. Even if you spend an extra $5,000 a

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year, the numbers say you're not going to run out of money even

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when we account for all these things that could go wrong."

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So today, we're going to cover what you need to know about how

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your parents relationship with money is likely very different

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from yours. And more importantly, what you can start

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doing to take steps in bridging that gap between you guys. So my

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daughter Avery is currently four years old. And as any four year

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old, she asks a lot of why questions. Why is the sky blue?

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Why can't we eat chocolate every day? Why does green mean go, and

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red mean stop? I really kind of liked that one in particular, by

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the way. But children have a completely different lens on the

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world and that's so fascinating. And at the same time, it also

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makes answering their questions somewhat difficult because

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they're coming from that different, you know, innocent

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perspective, that different plane compared to us. So

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recently we read David and Goliath, a story I would expect

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everybody to know. So if you remember in this story, David

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hits Goliath with the rock. And Avery asks, "Why did David hit

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him?" You know, this is supposed to be the crowning moment of the

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story where David triumphs, and all Avery could see was that

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David got angry and hit somebody else with a rock. So aren't we

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not supposed to hit people? Is Goliath okay? Well, it certainly

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caught me off guard. Am I supposed to, you know, go

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against everything that we've been talking about with her and

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just condone violence that, you know, if they deserve it, then

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you can hit them with a rock kind of a thing. If you're

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wondering, I instead went with a, "No, you shouldn't hit people

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Avery, you're right. David was just frustrated. I think he and

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Goliath probably afterwards used their words and became friends."

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So right, wrong and different, that's what I went with, and

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there you go.

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So what you need to know about talking to your parents about

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money is first that they come from a completely different

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perspective than you do most likely. While they didn't

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directly go through the Great Depression themselves, their

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parents did. And because of that, they likely were very

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influenced second hand by that Great Depression mentality, so

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to speak. The pay off your mortgage, keep your money under

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your mattress, in the banks kind of a thing. They perhaps don't

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like paying bills online or prefer paper statements.

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Finances overall may be very personal to them, very private

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to them. They probably don't like using Venmo, publicly

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posting that they are paying someone with, you know, a cute

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emoji at the end of it. Because you may come from another money

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mindset, it may be hard to have any money related conversations.

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And just taking that topic off the table is probably much

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easier many of the times. However, putting it on the table

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is the first step to building that bridge, and that's what I

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want to try to encourage you to do today.

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So what you can do is ask questions without providing

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advice or input. So that last part is very important- without

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providing advice or input. Start conversations that involve some

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financial aspect, just to start building a bridge of having that

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topic be something you can talk about, even if it's to a minimal

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kind of an aspect at the beginning. The initial goal here

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is to start a conversation. In the episodes that follow in this

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series, you're going to be able to build out your knowledge,

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extend the conversation, speak intelligently, so they could

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say, "Hey, you know, my kid kind of knows what they're talking

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about here." Maybe I can have a little bit more of a back and

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forth. But for today just focus on the goal of a conversation in

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and of itself. So here's some examples of what you can talk

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about. Again, careful not to tell them why you think they are

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wrong, if you do think they're wrong, but just to open that

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door, rather. For a lot of these questions, it's really just

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about expressing concern for their well being, which I'm

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pretty sure they'd appreciate.

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"Hey Mom, Dad. Just curious, do you use one bank? Or do you have

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a number of different banks that you use?" "Hey Mom, Dad. Just

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curious, do you like paying most of your bills online? Do you

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like paying them directly? What do you feel like works out the

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best for you?" "Hey Mom, Dad. Just curious, do you use your

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debit card mostly? Do you have a number of credit cards you use?

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Again, kind of, what works best for you? What do you find to be

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the best and most comfortable?" "How did you know when you

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should start investing? How did you kind of figure that out? How

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did you say, 'hey, I should start putting money away'? And

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how did you go about doing that?" "If God forbid anything

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ever happened to you, do you have some place with like

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documents? Or some person I'm supposed to go talk to?" "Hey

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Mom, Dad. You know, just urious, how did you know you

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an even retire? Like, how did hat dawn on you? How did you

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now, 'Hey, I have enough money for the next 30 years'? Did yo

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have a financial advisor ever d like projections for you to kno

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how much you could spend, or h w long your money might last

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" "Hey Mom, Dad. Just curious, o you have medical coverage wh

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n you're retired? I know I g t mine through work, but you don

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t work anymore. Do you still ha e coverage? How do you know wh

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t it covers and what it doesn t cover

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Every parent now is different. So maybe none of these will open

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the door even a crack, maybe there are other questions you

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can think of that might be more fitting for your specific

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parents. But coming from this place of concern, which you

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likely have for them anyway I would assume, is the best chance

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to have it be well received.

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So a quick recap of today. First is to acknowledge that money is

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hard to talk about. But there are significant reasons why you

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should think about having those conversations with parents. The

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first is to head off that bad track earlier than later. And

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secondly is to get them thinking about making the most out of

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their money that they've worked so hard to earn over their

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entire lifetimes. They may have worked for 30 years or more, so

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they really deserve to use that money and I'm sure that's what

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you want for them too. Know as well that they are almost

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certainly coming from a different mindset about money.

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Remember, no public Venmo purchases with emojis at the

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end. Lastly, start bridging that gap by asking very basic

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financial preference questions, or those that express concern

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without being invasive. I've said it many times again today.

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The goal is to start a conversation, not tell them why

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they are wrong.

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Thanks for tuning in today. As always, if you are able to

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implement what we cover, that's fantastic. You have less to

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worry about than before, and can focus more on enjoying life. If

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you are wanting help with these things though, or have questions

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you need help in clarifying, check out the 'Ask Joe' section

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on the show's website. www . enjoy more 30s .com, that's

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enjoy more three zero s .com. If you enjoyed this episode

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specifically, please make sure to subscribe and review us on

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Apple podcasts or wherever you listen. There are literally

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millions of young American families out there I'm trying to

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reach and help just like you. Clicking a star, writing a

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review really goes a long way. The next episode is "Your

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Parents Trust Their Advisor", where we are going to extend now

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into if you can open that door of conversation, who are they

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probably taking advice from already, and what does that

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advice maybe look like? Until next week, thanks for joining me

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today and I look forward to connecting with you again soon.

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The conversations on this show are

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Joe's opinions and provided for general information purposes

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only. They do not constitute accounting, legal tax or other

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professional advice for your specific situation. You should

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always seek appropriate advice from a financial advisor,

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accountant, lawyer or other professional before acting upon

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any content or information found here first. Joseph is affiliated

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with New Horizons Wealth Management LLC, a branch office

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of TFS securities Inc and TFS advisory services, an SEC

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registered investment advisor member FINRA/SIPC.

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About the Podcast

Enjoy More 30s: Family Finance
Family Finance for Young Professionals.
Young families receive little to no personal finance help. We all grow up to have jobs and money, yet our education system focuses on Shakespeare and Algebra. Even professional advice can be hard to come by, with the majority of the industry chasing retirees and existing wealth.

Joe Okaly's podcast is aiming to change this, providing personal financial advice geared specifically to professionals with young families. This podcast is dedicated to making life more enjoyable for young families, by hitting on the financial topics that tend to weigh on us, stress us out, and distract our focus from simply enjoying life.

Joseph P Okaly is a CFP Certified Financial Advisor who fits directly in with who this podcast is focused on - a young professional with a family. With over a decade of experience as an advisor, there is passion and knowledge to make a difference.

Securities offered through TFS Securities, Inc., Advisory Services through TFS Advisory Services, a SEC Registered Investment Advisor Member FINRA / SIPC. TFS Securities, Inc. located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.