Meet Linda Kitchens
Helping young people understand their money
Linda Kitchens wants to help take the mystery out of thinking about money. So for her, as a director of Wealth Planning and partner at Aspiriant, educating young people about finance strikes at her core values.
“People don’t get basic training in school about financial management or the choices one can make. You don’t even learn how to balance a checkbook,” Linda explains.
Linda has been teaching teenagers and college students about finance for years — first, at the firm she co-founded with Neil Hokanson, another principal and wealth manager at Aspiriant, and also through raising her own two children.
Her overarching message in these discussions is that financial management is about choices, and everyone is capable of making great decisions. There are a lot of good ways to approach this if you plan ahead.
Linda’s passion for teaching good financial decision-making started early. Her first job out of college was as an administrative assistant at a financial management firm in the Southern California community of Del Mar. The company had a business model that was unique at the time — combining independently licensed advisors under one roof to share revenue, support and resources.
It was there that she met Neil, who previously ran a firm in Santa Fe, N.M.
“Neil and I were on the same page. Our approach to working with people and squarely focusing on their best interests was the same,” she recalls. “We started to become a team, working exclusively together.”
Once she got to know the business, she was drawn to the positive affect she could have by getting to know clients and what they wanted to achieve in their lives. She enjoyed how problem-solving is a major part of the job.
As a parent, all these conversations are opportunities to focus on what you think is most important and reflect your values in your decision-making.
“It’s not just helping them, you become part of the family team,” she says. “If you start with caring first, it’s really amazing what you can do and the impact you can have on people’s lives.”
In 1987, the two broke from the firm and formed Hokanson Associates in San Diego, which grew to 12 employees and managed about $600 million in assets. Hokanson Associates then merged with Aspiriant at the end of 2015 as both companies shared the same philosophy on how to best serve clients.
Desiring to give back to their community, Linda and Neil started teaching young adults at a community college and then at local high schools. “I loved it when we were really hitting them with a one-two punch — giving the kids an idea about the business as well as a foundation to start their financial futures,” says Linda.
Today, she shares these lessons to the children of clients and the broader community for Aspiriant. Here’s a little sample of how she goes about it.
Linda, you have a son and daughter who are both now in their early 20s. Looking back, how did you introduce them to money and managing it responsibly?
A: Thank you – it’s fun to think back! Their father and I took nearly every opportunity to talk to the kids about the things that are most important. We didn’t exclude them from any conversation around the day-to-day financial decisions we had to make. We were just careful to be age-appropriate in the level of detail.
For example, we’d have a discussion once a week at dinnertime. We did it subtly and kept it very basic initially. They didn’t even realize it was an educational experience. We started with careers: Why do both mom and dad work? What do we do? We broadened it to the work of other people in their lives — their teacher, doctors, grandparents etc. We’d talk about what’s happening in the world, and then open it up for questions: How would you handle this? As a parent, all these conversations are opportunities to focus on what you think is most important and reflect your values in your decision-making.
When it came to allowance, our theory was everyone has a responsibility to participate in the household. No one gets paid for basic things; we all take care of our rooms, etc. Then there was a whole list of chores that could be done to earn money. We also gave a base amount each week for entertainment that we might normally pay for anyway, just to get them started on managing it themselves: I can buy the puzzle, but then I won’t be able to buy popcorn at the movies. The last thing we did, was match savings — any savings — weekly allowance (This was a costly deal. We gave the allowance and then matched it if they saved it!), birthday money, etc. Here’s one takeaway — I think some people are born with a natural proclivity toward money. My daughter was a saver from the very beginning, saving every penny. My son was not.
The cool thing about having two kids is they learn from each other. For example, we have a vacation fund, a jar in which we put our change throughout the year. And when we go away, we split the savings between the kids to spend as they wish. If they want more, then they have to bring their own money. When we went to Disney World, my daughter had a pile of cash, my son didn’t. I explained to him that this is the result of the choices he made along the way, and I reminded him that he really enjoyed the Batman toy he bought.
How about teaching some of the more complicated topics as they got older?
A: Exposure to concepts is important, but I think the lessons make a greater impact when taught through real experiences. For example, my daughter got her first job at a donut shop before she was even driving. That’s when I explained how she gets paid, and I helped her fill out the W-4 form. Of course, the first paycheck was the perfect opportunity to talk more about taxes and the benefit of an IRA.
When it came to investing, I started with super basic concepts. We talked about life planning and goals, and how that connects to what they might invest in. We kept it pretty high level. Do you want to lend money and collect interest? Then you’d buy bonds. Bonds are less risky, but most of the time, the “return” you earn is the interest you collect, not much growth of what you invested, if any. Or are you an investor? Stocks mean you own a piece of a company. They can be riskier, but over time, you can watch your money grow.
In the fifth grade, they did a school project where they were given $50,000 in play money to pick stocks and plot over several months. I piggybacked on that project and kept it going for a couple of years to watch how stock prices were affected by news, as well as business conditions and the economy. Then, we looked back, and I asked them how well they knew these companies and whether they would feel comfortable buying those stocks.
It’s all about taking their education in steps.
How often do clients ask you about educating their children about finance as they come of age?
A: I talk to parents quite a bit. They usually start asking questions when the kids are in high school.
Traditionally, I’d educate the family one-on-one. But after getting lots of interest, we reflected on the classroom experience and created a seminar for young adults. That was a light bulb! When the kids are in a room of peers it’s a different experience. They start sharing stories and learning from each other. A key component is exploring a fictional case study where they debate different options and solutions for “Lisa,” a fresh-out-of-college, newly hired “Giggle” employee. We’ve done this about seven summers now — sometimes running it in two conference rooms when there’s enough demand.
We’ll also hold small classes for clients and their friends. Those are more customized, adding to what they have already learned in a finance class and elsewhere.
What mistakes or misunderstandings do youths typically have about money?
A: Initial mistakes usually have to do with credit cards. These little pieces of plastic are not clearly explained: how the balance works, what you are charged interest on, the high rates of interest. A biggie is that kids don’t understand the minimum payment, and if that’s all they pay each month, then their debt continues to grow and they pay more interest. I remind them that credit cards aren’t all about changing your life like the ads portray. The banks are out to make money.
Young people also don’t understand retirement savings. Many think of savings as just a bank account. I explain IRAs and 401(k)s, what compounding interest is, and what an employer match can do for them.
Ultimately, what is the most basic financial concept you think all people should understand?
A: Money represents flexibility and choices. Yes, the more money you have the more flexibility you have, but you get to decide what that means to you. And if there are trade-offs to make, are they worth it? It’s too easy to say I want to make a zillion dollars or make the most I can. Let’s back up, what do you really want to do? What things are most important to you? If you’re shooting for the zillion dollars, how will you get there?
The reality is achieving wealth isn’t mysterious. You can plan for it.