From Lemonade Stands to 401ks: Building Financial Literacy Foundations Early

Join Arsenal Financial advisors Doug Orifice and Jeremy Vaille as they open up their relaxed office conversations about various financial topics for everybody to hear. In this episode they get together to discuss the importance of finding ways to talk about financial literacy at an early age.  Listen to learn about:

• How money games such as Monopoly can help introduce the topic
• Lemonade stands, piggy banks, money apps, and other ways kids can start interacting with real money
• The difference between savings accounts today and how to make them work for you
• Is financial literacy being taught in schools?
• Jobs that even kids under 16 can do to start earning some money
• This episode's Mythbuster with Jeremy tackling the idea that young adults can't afford to save
• Then finish up with some dad jokes

Learn more about Doug, Jeremy, and Arsenal Financial at arsenalfinancial.com or call (781) 335-9100.

Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. The information in this podcast is educational and general in nature and does not take into consideration the listener’s personal circumstances. Therefore, it is not intended to be a substitute for specific, individualized financial, legal, or tax advice. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a final decision.

Transcript

Doug: 0:04

All right, hello and welcome. Here we are, yet another episode of the Arsenal Money Clip Podcast. It's a gorgeous Friday. I am here with my good friend, Jeremy Vaille. My name is Doug Orifice. Jeremy and I are financial advisors here in Massachusetts. Our firm is Arsenal Financial and we do this hangout once a month. Again, as I've told, to dispel the beliefs of my now 13-year-old child, not to become Joe Rogan or Bill Simmons, but just for you and I to hang out and try and give our clients and maybe some strangers out there, a listenable podcast about money. Jeremy, how are you doing today, man?

Jeremy: 0:39

I'm glad it's May and I do believe Matt Hanna tells me that this is our 10th episode of this. 

Doug: 0:45

We made it. We made it. Way back in the day we ever wondered if we would be able to do something like this. You know it's like hey, we should record our Tuesday morning banter. So, Matt, thank you. Thank you for allowing us to give JV and I a very easy, doable way to have these conversations. We've had some clients talk to us during either meetings, phone calls and emails saying that these have been helpful check-ins too. So thank you, Matt Hanna, and, I guess, a good shout out if you're listening to this, please check out Matt Hanna's podcast. Matt Hanna is a treasure here in Watertown, Massachusetts. He runs a podcast called Little Local Conversations where he interviews all kinds of different people here in Watertown. He's done a fabulous job with that. Little Local Conversations just turned one year old recently, so thank you, Matt.

Jeremy: 1:31

A treasure, a treasure, Matt. I don't know if I've ever been called a treasure before.

Doug: 1:35

Yeah, you are a treasure, you know, and shout out to Porchfest, which I don't know when this podcast is going to come out, but Porchfest here in Watertown is on May 17th, so super excited about that and, Matt, thank you for all of your efforts here in town. You know we try and provide some evergreen content, meaning that a podcast that you can listen to really any time of the day, any time of the year, any year in the future, right. But I think it's also important to kind of timestamp where we are right. So we record this on May 2nd 2025. A month ago was quote liberation day, JV, right? 

Jeremy: 2:10

Ooh yeah.

Doug: 2:11

Have you felt liberated over the course of the last month?

Jeremy: 2:13

Um no.

Doug: 2:17

It's been an interesting ride for JV and I, as you know, we have said to our clients, our friends, our family, that maybe when we embarked on the journey becoming investment advisors and financial planners we didn't realize that so much of our business would be psychology and trying to help assuage client fears and just making sure that people are OK and checking in with them. And gosh, you know, I graduated from Bentley College, now University, which you know doesn't exactly have a robust liberal arts program, and I probably could use JV a good four to five psych classes and maybe even a minor in psych, in addition to that major in finance.

Jeremy: 2:52

Seriously.

Doug: 2:53

It's been a very, very interesting last several weeks, last several months, and let's talk about that really briefly before we get into today's topic, which is financial literacy. I think one of the things that's allowed us and our clients to get through this odd time here in 2025, where we have had a concerning news cycle, a lot of questions about policy, a lot of questions about global trade, we have had a correction in the stock market, we've had volatility in the bond market. It's been a tough time to be an investor. It's been a tough time to really digest the news. I'd argue that one of the things that has helped guide us as we guide others is having these foundational pieces that we stick to right, some foundational principles from a planning point of view, from a money management point of view, that we stick to.

Doug: 3:44

I'll share one right and JV, I'd love for you to storytell a little bit too, but here in the first quarter of 2025, I celebrated a 47th birthday and I kind of outed myself to clients that don't know, that I am a gray bearded snowboarder here at the age of 47. And they're like cool, why are you talking about snowboarding? I'm like well, you know, at 47, it hurts to fall more than it did at 37 and definitely more than 27. So when I'm snowboarding with my wife and son or with my friends and I'm at, let's say, a really icy mountain like Cannon Mountain up in Franconia, New Hampshire, which tends to get icy and have its own weather ecosystem, you are going to find a patch of ice most days at Cannon Mountain. And I've told clients when I'm snowboarding and I see that patch of ice, I do not hit the brakes. You have to kind of stare at that ice 15, 20, 25 feet ahead and go over it, and then you keep looking 20, 25 feet ahead and you look for your next safe point in which to slow down or turn.

Doug: 4:44

And I feel like that's been my analogy for how to approach these volatile markets, right. When we have uncertainty, when we have a market and an environment that we don't understand because really this has been a chapter that we haven't seen before, you do have to go over the ice, right. It is not a good time to hit the back edge of your snowboard or grab an edge on your skis and try and stop on the ice, because that's when investors make mistakes, right, because then we're investing emotionally. It's been helpful to have that principle to go over the ice, stick to your cooking, because prior to that, we've done some planning, we've talked about why you invest, right, and we understand which trail we are going down, and we've chosen a risk appropriate trail on which to ski or snowboard. So you know, as we talk about financial literacy today, I think we're going to talk about some of the building blocks of this at different points in your life. Do you feel like over the last few weeks, you've had conversations like that?

Jeremy: 5:41

Oh yeah, a hundred percent. My analogy is a little bit different. More for our southern brethren that are snowless and mountainless, people are used to riding a bike and they ride over that sand patch and it's a little thick, thicker than you expected. Last thing you want to do is turn. You're going to make it through. It's going to feel a little squirrely, but you're going to get through that 10, 20, 30 foot patch of sand. You kind of nailed it. It all started with planning in the first place, right. So, and it's normal to feel the emotion. We're not immune to the emotion, right, and we know, you know, we have all the details and the nuts and bolts. So there's a lot of noise in the system. There's a lot of media. It definitely weighs on our clients, us, and it's always good to continue having these conversations and bringing them back to the foundation.

Doug: 6:23

Yeah, and I think, to kind of bring this full circle too, I mean, I remember doing a social media post from a great chart that you sent me, talking about how the average peak to trough in a normal year is 14%, right. So you're going to have a 14% swing top to bottom in just a normal process of investing in the stock market, right. And I wrote the social media posts and I'm like, damn, you know, like I'm getting old, I've been doing this for a little while. And it gave me a little bit of context to see kind of what we've been through as advisors, what we've been through as investors right and what our clients have been through. And you know, you build these scars over time and for you and me, it becomes easier with every crisis, every correction, every data point, right. And it becomes a lot easier the more time that you have in. So let's go back to the very, very beginning. Recently, we had financial literacy month. I think that was April, so we missed that. So when is the best time to kind of learn about financial basics, JV?

Jeremy: 7:17

I go back to the blog that we did last year and it was, I think it was in the context of saving for college. Right, we had the three. It was like get started, get serious, and get involved. And I think it starts right out of the gates.

Doug: 7:28

Yeah, absolutely yeah, that was at zero to six, six to 12 and six to 18. We want to focus on financial literacy today and have a little bit of fun. And for those of you listening who are investors, maybe this is an opportunity to think about your kids, maybe even your grandkids, and how they can interact with money, right. Because maybe the earlier that they start to learn about money, the easier it is for them to get through their version of what we're going through right now in terms of recalibrating and recalculating our own financial situations. So we have this like semi-organized today where we'll talk about kids, we'll talk about teens, we'll talk about coming of age, we'll do a little mythbuster at the end, hopefully have a little bit of fun along the way. So, JV, I don't think we prepped this, but I'm going to ask you the question: what was your favorite board game that some way, shape, or form, dealt with either money or real life?

Jeremy: 8:18

I definitely gravitated towards Monopoly. I just love the scooping up the cards, getting the properties, and then being able to build the hotels on the properties. That was great. And being able to collect the rent from everybody.

Doug: 8:29

Yeah, were you a swing for the fences, boardwalk park place kind of guy, or were you like I'm going to go dominate the mid tiers with the New York and Tennessees?

Jeremy: 8:40

I think I mid tiered it, for the most part.

Doug: 8:43

That's you. That tracks. 

Jeremy:

Yeah, I wanted to go against the grain a little bit. Railroads, you know I loved those things. How about you?

Doug: 8:50

Doesn't surprise me. I love the railroads. Love the railroads. You know it's interesting too, like maybe on another podcast we could talk about the railroads and the monopoly cards and how that's like income investing, right. But I think playing Monopoly as a kid was, you know, it's really the first game that you have that introduces you to a little bit of how money kind of touches everything. You're paying taxes. You're going around the board and collecting a two hundred dollar salary every time you pass go. You're taking ownership of stuff. You're collecting rent checks when people land on your spot. I love playing Monopoly and I remember even during COVID my son was addicted to Monopoly. It was just like every single day. It's like, dad, can we play Monopoly? I'm just like, well, you know, after I'm done getting through this as an adult and as advisor, and then getting through your curriculum which has been handed to me, yes, we'll play some Monopoly. So, yeah, that was a huge one too. Did you ever play life?

Jeremy: 9:49

I did, but not as much. I wasn't as into that one.

Doug: 9:52

Oh, I got one for you too. Here's an old one. Did you ever run into a game called Careers?

Jeremy: 9:57

No.

Doug: 9:58

Oh, so that was an old one I used to. My grandparents had this game and it was just like remember opening like old board games, and you can kind of smell the musts because the board game is like 30 years old. Right, it was one of those. I think it was a board game from the 1960s or what have you. But it was cool because, like, the whole point of it was like you had to choose a career path, and I think there was one that was science was one, and one was just called go to the moon, be an astronaut, one was business, and one was journalism and whatnot. I think that was instructive too, because it was just like oh, based on what you do for a living, you can make different types of money. That's really fascinating, right. So I guess maybe topic one is money games never get old.

Jeremy: 10:39

Yeah, when are you starting to play those? Six, seven, eight?

Doug: 10:43

Yeah, I think six, seven, eight, but I think you can do them even earlier, right?

Jeremy: 10:48

Yeah, well, because one thing to think about is, like the money scripts that we grow up with, heavily influenced by our parents, right. So that early phase of zero to six, even that six to twelve phase and beyond, I mean, we're learning from our parents. The majority of our financial world that we understand is because of what we see at home, not necessarily what we're seeing at school, but because of the way our parents think about money, the scripts that they've grown up with and the way they perceive it and the behaviors kind of percolate down to the kids of the household.

Doug: 11:18

You make a good point too, because we think of our growing up and our parents, right. We did not grow up in a digital world, so a lot of the games that you might play might be on whatever, your folks' iPad or something like that when you're a younger kid and maybe there's a few less board games going on. So I guess one thing I'd throw out there, right, is you're introducing your child or your grandchild to money, right, these tactile board games where they can touch paper money, where they can have a little bit of fun with it, where they can get competitive. That stuff never gets old. I got one more for you too. You know it's still in my playroom at my house, which my son is by far outgrown, but when he has a little cousin that comes over gets played with all the time. Let's see if you get this in the house. The toy cash register. You got one of those?

Jeremy: 12:04

No, I don't think we do anymore. 

Doug: 12:06

Oh yeah, still got it. Still got it. I remember when he was a little guy he would want to play store. I remember I used to do that as a kid with my little brother, and even now my guy's little cousin will come over and it's one of the first things she'll go for. Sits down, opens the cash register and everything you know, and I don't think she even has a structured game for it, but likes the idea of it, right.

Jeremy: 12:31

We do still have a piggy bank though. 

Doug: 12:34

Oh, that's huge. 

Jeremy: 12:35

That is key, but it's not really a piggy bank. It's not the pig, maybe we do have a pig, but we also have the four quadrant bank. I think we've talked about this before. Right, the four quadrant bank. There's four slots in the piggy bank, so he gets his.

Doug: 12:47

Can I pause you for a second? So the piggy bank. What's that physically actually look like for your family? How do you divide up the jars or like what's it look like? What's the experience?

Jeremy: 12:57

So it's like a box with four sections in it. So it came that way. Came that way, right. And it says save, spend, invest, and give. So it's got these four quadrants. He gets some money from birthday, he gets some cash for doing something, right. He's able to deploy that money however he wants into the buckets we always talk about, right. So he's got four buckets that he can deploy that to. And occasionally he'll be like hey, can I put this in my bank account because I know that's growing, which is awesome. So at eight years old, I know I'm doing something in those earlier years kind of getting him to think about this.

Doug: 13:34

Out of curiosity. That's not something that you made, that's something that you bought. 

Jeremy: 13:38

Yes. 

Doug: 13:39

Where do you get the four quadrant bank?

Jeremy: 13:40

So there's a bunch of them. Yeah, you can just type that in Google it and save, spend, give piggy bank and a bunch of options come up. 

Doug: 13:48

Beautiful, beautiful. So I guess two things have not gotten old, which is board games, number one, and then some idea of the piggy bank. Yeah, we like it. Alright, you know, I just had a guy who, my son, was 12, just turned 13 last week, right, so he just left that six to 12 and entered that 13 to 18 phase, right. So let's think about maybe those six to twelves, right, so, you know, you're still playing games. Games are still cool, the piggy bank thing still works, but now every once in a while they're learning about trading money for time. What was the first time you traded time for money?

Jeremy: 14:26

Well out in the fields, out in the fields landscaping. You know, I guess if it wasn't part of the home experience, it was the paper route, you know, on the bike.

Doug: 14:36

I think mine was lawn mowing. That was the first time it was like do a task, trade some time, get some money. So I think do that as early as you can for anybody who's willing to pay. You know, nextdoor neighbor is willing to give you five bucks to shovel a walkway and you're eight and you could shovel. Go do the thing. 

Jeremy: 14:54

Yeah, earn the money. 

Doug: 14:55

You know we still have in our neighborhoods to this day lemonade stands 

Jeremy: 15:00

Nice. Well, that's the Watertown thing. You know, Porchfest, the lemonade, yeah.

Doug: 15:02

What's funny about the lemonade stand, too, is, once one person has the idea in our neighborhood, two or three other kids want to jump in and get involved. And it's cool because all of a sudden, there's one thing they don't see and one thing they do see. They do start to get exposed to a little bit of sales and marketing, which is like I get to scream and do some jumping jacks for people to realize I am selling cookies and lemonade. I need to make a sign, right. I need to make change when somebody buys something. I will tell you what they don't usually see is cogs, cost of goods sold, because usually it's mom and dad buying the stuff you know. Not anymore though. He wants to do a lemonade stand, he now knows the cogs are on him. But the lemonade stand never gets old, and being entrepreneurial never gets old. Here's what's a little bit different though, that you know you and I have talked about this, is we are in this digital age. Our kids will probably grow up never writing a check in their entire life, right.

Doug: 16:04

So I would say for parents out there who have kids that are older than six, maybe younger than 10, start thinking about the apps that you can use for money. 

Jeremy: 16:14

You've got some experience with those, right?

Doug: 16:15

Yes, sir, yep. An example that you can look up is a company called Greenlight. Greenlight takes a little bit of banking past and banking present, puts them together. As a parent, you get an app. As a kid, you also have access to this app if you happen to have a phone or a watch, or maybe even not I'll get to that in a second. But you have this app where you can transfer money from your bucket as a parent to the kid's bucket, right. So the kid could have a spending bucket and a savings bucket, and maybe my son's going out to the movies and an experience out to the movies maybe might be $20, right. If he wants to grab a snack and get a ticket, whatever it is. I might be feeling charitable that day, I'm like buddy, this one's on me, I'm going to put $20 on your Greenlight account. If you use the Greenlight app, that usually comes with a corresponding debit card for the kid too. So now the kid can go use his own debit card, right. Have a little bit of financial freedom. Understand that he has a budget to work in, right. If he spends $22, the purchase is going to reject. So maybe this is something we can actually throw in a newsletter at some point too is a couple of these different companies that have these apps and tools for kids.

Doug: 17:25

But you have SoFi, you have Greenlight, there's a whole bunch of other ones, and it's great because you give your child the chance to learn about a little bit of independence of either spending money that's theirs, money that's given to them in a limited fashion. And you know, this is interesting too, and this is a bit of a segway. One thing that's changed for all of us in the last two and a half years is we've gone from this anomalous all time low, zero interest rate environment to interest rates that are more historically normal right now, right. So you and I are lucky that we have longtime clients and we get to help their adult children I don't know, 25, 28, 30, maybe having their first kid, maybe buying their first place, and sometimes I think about their experience with banking. Their entire coming of age was during a time where they paid banks and banks didn't pay them.

Jeremy: 18:16

Yeah, and they probably never went into a bank either. 

Doug: 18:18

Yeah, probably not. Do you remember opening your first bank account?

Jeremy: 18:22

Yes, I do. Rockland Trust, downtown Rockland. 

Doug: 18:25

Wow, do you remember how old you were? 

Jeremy: 18:26

I got the passport book. Oh, it was pretty early. Probably seven, eight, that's my guess. Because I was into this, you know, I was in an entrepreneurial family, so it was kind of like this is what you do.

Doug: 18:37

Yeah, yeah, I remember being able to have my own account, I think when I was 12 or something like that, at my local bank, right, where I could actually go in and I could put the money in and I could take withdrawals out and everything. But the way that you and I get taught was the reason that we put it there is it's somewhere safe, number one, and then number two we make a few bucks, right.

Jeremy: 18:58

Yeah, you get some interest on your money. 

Doug: 19:00

Now I used to work for Bank of America, right. So I'm going to out my former employer here. Some banks still don't pay you anything. The average savings rate on a Bank of America savings account is actually less than 0.1% right now on a typical deposit account. So not all banks will pay you, but we are in a period of time where you can advocate for yourself and you can get paid. So if you are helping your kids open their first bank account, if you are using one of these apps like Greenlight or whatnot, let your kids know that they can make a few bucks in the bank again. You know, even if it's two or three percent, their money can not sit in a jar necessarily. It can be at a bank and pay them a little bit. It's really really cool to see these things add up.

Jeremy: 19:43

So not all banks are created equal, right. Some banks will give you interest, some won't. Is there any kind of like one or two bullet points on that?

Doug: 19:50

Yeah, I'm glad you brought that up too, right. So if you are shopping for a bank for your kid to do business with and you want to get paid, think of the large national money center banks, right. So your JP Morgan Chase type banks, your Bank of Americas is I'm not trying to be mean here, but their business model right now. They are not really incented to go pay you a whole lot in your savings account. In fact, these banks have such wide deposit bases, enormous deposit bases, that if they decided to be charitable and raise their average savings rate from point whatever percent to 2%, it is enough that it will destroy their net income for the quarter and you'll have a pretty good shareholder revolt and you'll actually see stock prices drop right. So thus and so, you will not see interest rates come up anytime soon for these large, large banks.

Doug: 20:38

However, there are some banks that are more credit card dependent for their revenue. Think about Discover, think about American Express, think about Capital One Financial. These are banks that have huge credit card portfolios where, unfortunately, they're dinging people at 15, 18, 20% plus interest. When you have a bank that has a larger revenue source from credit cards, oftentimes they're able to have some of these online savings accounts that pay you a little bit more. And then you can check out some of these websites like nerdwallet.com, bankrate.com, and then go shop for some online accounts. So shop carefully. And yeah, I'm glad you bring that up. No, not all banks are created equal right now, and it doesn't mean they're bad banks. It's just different banks have different priorities.

Jeremy: 21:23

And when I'm looking on a site like that, I usually go with a name I've noticed before.

Doug: 21:29

Yes, yeah, you know.

Jeremy: 21:31

There's a lot of banks out there that never heard of that before.

Doug: 21:33

I mean, if I see, like Matt Hanna Bank, I don't know. I'm just kidding.

Jeremy: 21:39

You know it's FDIC insured.

Doug: 21:40

Yes, you know, trust is a huge, important thing. Let's stay with our under 18 kids right now, too. If you are partnering with your kid to try and educate them about a bucket of money, one thing that I believe also never goes out of style is the custodial account. We might know them as UTMAs or UTMAs. These are accounts that either could be savings accounts or securities accounts that are owned by your child or your grandchild or your nephew. Owned by the minor, but piloted, or the custodian, is the adult. And what's cool is you know this could be a bank account like we talked about, or, you know, in that structure you could go buy shares of General Motors and have those in your kid's name. If your kid likes to play with Hot Wheels or Matchbox cars as a kid, right. Or they could be a baseball fan and you could buy shares of whatever, I don't know, Madison Square Garden or the Atlanta Braves or something like that. So you can actually have securities that are also held by the minor, piloted by the custodian. So it's another way to just give kids some exposure to stocks.

Jeremy: 22:44

Some tax advantages there, but also they get full control at the age of maturity. 

Doug: 22:50

Right right. All right, so we talked about our kids. We talked about our teens. Let's talk about our coming-of-age folks too. You did a great job doing some research about Commonwealth of Massachusetts financial literacy in schools. Love to get your take on this. I thought this was pretty interesting that the vast majority of schools have programs that have personal financial literacy content, but the vast minority of schools actually have requirements for it. As you were poring over this research, what were your takeaways, JV?

Jeremy: 23:20

Yeah, it's like a five-page report by the state of Massachusetts and I think the headline is requirements are rare. That was the thing that kind of caught my attention right away. It turns out of like 108 schools in the study, only 16% of them have some sort of requirement. And I think it kind of goes into how you define, because then the next section talks about how many have some sort of program that have at least some content in there. I'm not sure how you define that, but it seems like that number's a lot bigger. So it sounds like there's a lot of school systems that have something, not knowing totally what all is involved in that. But that's good at least to hear.

Doug: 23:58

A little piece of data here is 85% of high schools that responded to this survey, and 95.8% of high school programs that were studied, have at least one course with personal financial literacy content in it. But yeah, to your point, that could be a math class that does like a one day on it or something like that, or a business class that kind of covers this stuff. So I would say, if your kid is going from middle school into high school and you actually get your chance to ask some questions, A, are there financial literacy programs in your community school? And then for folks like you and me, is there an opportunity for us to volunteer and get out there and maybe help people?

Jeremy: 24:35

Definitely is, and it seems like there's a lot of, especially this day and age in Massachusetts, a lot of reductions and a lot of challenges at the municipal level. So I think one of the things that that report talks about is the manpower and the ability for educators and funding to help provide that kind of stuff. So, yeah, any opportunity we get, you know, as adults and people in the business world, get a chance to volunteer and do those kinds of things, that's we should definitely take our opportunities to do that.

Doug: 25:02

So part of the message there is let's not necessarily rely on our schools for our kids to learn about money, because that's probably not going to fit the bill. I'll throw two bullet points out there. If you have a community bank, all community banks are required by something called the Community Reinvestment Act to have a financial literacy program. So banks are always looking for opportunities to get out there and get involved in the community. So if you happen to have a contact with a local bank and you have the means to maybe set something up, that's a great non-municipal, non-school way, but a community resource where you can get some financial education out there. There's a lot of great local banks that get involved with that.

Doug: 25:38

One thing that we haven't talked about too, that hasn't necessarily gone out of style, but has definitely changed a hell of a lot since you and I were teenagers, is working at any age, that you're able to work, doesn't go out of style. The crazy thing is that youth unemployment rates have just gone through the roof over the last 30 years, right, for a whole number of factors. Be it available jobs is a shorter portion of it, be it overscheduled kids, be it the proliferation of sports, be it more time dedicated to your studies, be it, you know, maybe a little bit less incentive to go and work because cost of living has gone up and sometimes it's not, quote, worth it for people.

Jeremy: 26:17

To your point, just thinking about some of those jobs, like I had a paper route. Who does that anymore? I just went to Panera the other day and ordered coffee and I didn't talk to a single person. I just typed it into the kiosk and you know, next thing, you know. Those are jobs that teenagers could do and they've gone away, right, gone away. Not to mention the pressure we've talked about that's on them for school and everything else, right. 

Doug: 26:39

Right, but here's the good news, as young as even 14, through your municipality, your town, your city, there's a whole bunch of ways that you could start to get involved and at least get a little bit of experience. Even if it's starting with community service type hours, which can lead to maybe some paid gigs, right. Camp counselor, you can do that stuff at age 14. A lot of programs through your town and city that you might want to look at. It could be reffing a soccer game, umpiring a baseball game. You can actually do this stuff before the age of 16. Make a few bucks and just start to have a different relationship with money and actually see what it's like when you're like oh okay, I don't mind trading 90 minutes of my time for 35 bucks to umpire a baseball game for some eight and nine year old kids, that's pretty cool right.

Jeremy: 27:23

Yeah, oh and shoot. Why did 35 turn into 27? 

Doug: 27:27

Yeah, exactly. Learning about taxes. JV, we're getting closer to our time here, right. So you know we've talked about kids, we've talked about our teens, we've talked about our coming of age folks. Let's maybe fast forward to our young workers. Maybe this will give us a chance to get into our mythbuster. One of the principles that I know you and I first learned, way before we even got into this career, right, is paying yourself first. Making sure that when you get your first paycheck, you pay yourself first. You take care of some of your savings responsibilities, do you want to tackle today's mythbuster about young savers.

Jeremy: 28:04

Sure, yeah, so the myth that exists out there is I can't afford to save, and I couple that with I'm young, retirement savings can wait. Regardless of any other facts that surround this, the fact of the matter is nobody is coming to bail you out for retirement. Like I've said, it's the biggest honker out there, right, that you can't borrow for and you got to pretty much save on your own. Because at this point we've talked previously that pensions existed for a large population, social security, and then personal savings. That was the three-legged stool that we talked through in the early, or call it, the mid part of last century. That's kind of changed quite a bit now. Now the onus is much more on the saver themselves or the person saving for retirement. So you got to take control of this. And if you look at the Vanguard 2024 study, I did a little data digging on this, and the average 401k balance is, do you know what that is? I'm going to ask you that first. Do you know what the average 401k balance is?

Doug: 29:04

Well, I only do because I have it in front of me.

Jeremy: 29:06

Oh, all right.

Doug: 29:07

Should we ask Matt? 

Jeremy: 29:08

Let's ask Matt Hanna. 

Doug: 29:09

Matty Hanna, out from the stands. Matt Hanna, what is the average 401k balance across the country?

Matt: 29:16

So that includes all ages?

Doug: 29:18

All ages, yeah.

Matt: 29:20

$150,000.

Doug: 29:22

He did pretty good. $134k right JV?

Jeremy: 29:25

$134k. Yeah, here's the kicker, though what's the median? The median, that means, is half above and half below. 

Doug: 29:34

Yeah, that I don't have.

Jeremy: 29:34

This one will blow your hair back.

Doug: 29:36

Matty, let's both you and I guess. I'm going to throw a $57,000 out there. Matt says 75.

Jeremy: 29:44

$35,286. 

Doug: 29:48

And that's illustrating the wealth gap there. For sure, for sure.

Jeremy: 29:57

All right. So we recognize that people are somewhat undersaved, right. So if we think about the myth of, well, I can't save, right.

Doug: 30:00

And especially in the context of, like you and I have dozens of 401k plans that we help with and from that we ended up talking to fairly young participants and late to the game starters. And I think when I think of our younger participants and our late to the game starters, that's where we hear that quote, right, can't afford to save.

Jeremy: 30:17

And the fact of the matter is you can't afford not to. I got some numbers from the US Bureau of Labor. If you're a high school grad with some college, you're going to be in the $47,000 to $52,000 range a year. All right. So let's just say you make $50,000 a year. If you were to save call it 3% of your salary, because you're getting, guess what, free money from your company, they're going to give you a match. They're going to give you 3% if you put 3% in, right. So that's $1,500 that you're going to put in from your own paycheck that's going to be tax deferred, potentially. And then you're going to get another 1500 from your employer to help, right. So if you did that from the age of 22 to the age of 67, so call it 45 years and you didn't change a thing, you just did 1500 bucks a year and got the $1,500 match, which is really undershooting, right. As your salary goes up, you're going to want to increase. At an 8% return, that is $1.159 million. So that right there is the power of compounding when we think about 45 years and just doing a little bit, right.

Doug: 31:18

Yeah, power of compounding and the power of keeping up great financial habits too.

Jeremy: 31:22

Right, but you think about that number of 1500, that's less than $150 a month. That's less than $5 a day for a coffee. We've talked about before. So I don't really love that analogy, just because, I like it because it kind of brings the number down to a day to day kind of figure, but one of the reasons why this is so hard is because it's so easy. Something that's really easy to do is also something really easy not to do. And that's why harping on consistency is like my number one thing is making sure that you're consistent with it. Because if you do this thing, you do 3%, 1500 a year, that's going to add up to a lot of money over the course of time.

Doug: 32:00

It's good numbers. I'm going to use those in our next 401k review.

Jeremy: 32:03

So is that too much, or can you not afford it? That's the myth, right, I can't afford to save. Well, I argue you can't afford not to. 

Doug: 32:09

Can't afford not to, quoteth Jeremy Vaille 2025. 

Jeremy: 32:16

So I think it's busted. 

Doug: 32:17 

It is busted. Busted. 

Jeremy: 32:21

Here's the thing. If you can't do the 3% match, fine, start at one to two and then, if you get a raise, well then, now you move it up a percent. So it's really about building the habit, making sure that that habit is in place and it's consistent, and that's really where the power of the whole thing happens.

Doug: 32:39

And most of our clients are in that we'll call it 55 to 75 bracket and our clients that have less to worry about as they transition into retirement are those who have had these habits for years. And then on top of that, to kind of tie it all together, have lived within their means, have a healthy relationship with money, understand what it's like to have a budget to save, to pay yourself first. All of these things.

Jeremy: 33:06

Kind of like that monopoly game that they practiced when they were in the 60s and 70s.

Doug: 33:11

Absolutely, absolutely. All right man, this has been pretty good. So if you're out there and you're having a little bit of anxiety here in 2025, it always helps to go back to the basics, right. We talked a lot about going back to the basics as savers. Didn't talk about today is going back to the basics of investing, too, which is establishing rules around your investment. As you're going through day by day, make sure that you're establishing rules and guidelines for every investment bucket that you have, that you have a plan around your investments too, that you actually understand the risk level of this ski and snowboard trail that you're going down as your journey unfolds as an investor, and then seek help where you need to as well. Now off to our favorite part of the podcast. JV, it's Friday, it's dad joke time. What do you got?

Jeremy: 33:59

All right, good, we got soccer practice tonight. Soccer this weekend, baseball, first week of baseball, which is pretty cool. We didn't talk about that. I got to run practice tonight because the other coach broke a rib yesterday riding the bikes with me, 

Doug: 34:15

So it's your fault.

Jeremy: 34:16

It's pretty much my fault. So I get to go to practice. 

Doug: 34:17

You coaching soccer practice, or baseball? 

Jeremy: 34:21

Soccer tonight.

Doug: 34:22

I love it. I love it. Beautiful.

Jeremy: 34:23

All right, so I got two quick ones. Here's the first, kind of in line with what we're talking about here. What do you call a man in debt?

Doug: 34:31

What do you call a man in debt? I feel like I should be able to get this, but I got nothing. Matty? Matt's got nothing. What do you call a man in debt? Go for it.

Jeremy: 34:45

All right. Owen.

Doug: 34:49

That's terrible. Matt just fell on the floor, dead as a doornail. There goes Porchfest. All right number two. What do we got?

Jeremy: 34:59

All right number two, this one's more for you. Why do the Norwegians put barcodes on their battleships?

Doug: 35:06

Oh, why do Norwegians put barcodes in their battleships? Oh, oh, so they can be scanned 

Jeremy: 35:14

Pretty close.

Doug: 35:15

What is it?

Jeremy: 35:16

So they can Scandinavian. That's half credit. That is definitely half credit. 

Doug: 35:24

I love how you get to throw a nod at my obsession with Scandinavia too. So that is awesome, cool. Matt Hanna, thank you, appreciate you. JV, appreciate you every day. Thanks, this was great. You know, if you're having trouble here in 2025 navigating the waters or you found something interesting today and you want to talk a little bit more, or actually better yet, if you have suggestions for us as it comes to how you are helping your kids, your teens, your high schoolers deal or interact with money, we would love to hear from you. Shoot us an email at info at arsenalfinancial.com. We've got a website that has a bunch of blogs and links to these podcasts at arsenalfinancial.com as well. You can always ring into the office at 781-335-9100 or go knock on my door here on Mount Auburn Street in Watertown. So, JV, thank you again. Always have fun doing this. Matt Hanna, thank you. And we will catch you next time on the Arsenal Money Clip Podcast.

Matt: 36:24

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