#15 - Equity at 16: Part 1 with Sam

In this inspiring episode, Chelsea Williams and Sam share Chelsea's daughter's remarkable story of buying her first car with equity at just 16. Discover how solid saving habits, resourceful decision-making, and leveraging family connections played pivotal roles in this milestone achievement.

Chelsea dives deep into the importance of instilling financial literacy in children, emphasizing the lasting impact of teaching kids about money management, and savings from an early age.

Episode highlights:
1. A teenager's journey to buying her first car through disciplined saving.
2. Teaching children about the importance of financial habits and savings.
3. Lessons learned from setbacks in the car buying process.
4. Leveraging family connections to make financially savvy decisions.
5. Overcoming instant gratification and fostering long-term financial motivation.

Tune in to this enlightening conversation that celebrates financial empowerment at any age and learn how to inspire the next generation towards financial success.

Stay tuned for Part 2 of this series next Wednesday!

Sam's Links:
LinkedIn

Always and Never About Money Episode Links:
Video Podcast: https://www.youtube.com/@MoneyMasteryWithChelsea
Socials: https://linktr.ee/the_money_whisper
Money Mastery Website: www.moneymastery.work
Reddit: https://www.reddit.com/r/AlwaysandNeverMoney/

Transcript

Speaker 1

So I was really, really proud of her for utilizing her resources and taking the initiative. And look for those of us that have kids, it is really freaking hard to find motivation sometimes.

And that's another reason why I was willing to be flexible with this situation because it takes a lot for my daughter to be motivated like that. And the hustle and the grind and the willingness that she showed during the process of finding her first car I've never seen in her before.

Hey, they're financial explorers. Whether you're a seasoned money guru or just dipping your toes into the world of finance, I'm glad you're here. I'm Chelsea Williams, your money whisperer and founder of two companies that focus on helping business owners and individuals take control of their finances. Always a never about money is where we gather to dive deep into the fascinating intersection of money and human behavior. We're here to learn about our money story, uncover the driving forces behind financial habits, understand the impact of history on our wallets today, and give you all the knowledge and tools to change your money story.

So join us for insightful conversations, personal anecdotes, expert insights and thought provoking ideas that will challenge your perspective and help you use money as the simple tool that it is to enhance your life. So whether you're a business owner or an individual working a job, get ready for a journey that will transform the way you think about money.

Hey listeners, today you get to meet Sam, and Sam works with me as my sales manager. She's done many, many things, but I have also worked with Sam in a past life so many years ago and we spent a lot of years apart and we ended up coming back together through my company and the opening that we had and I'm so happy to have her back. Part of what makes Sam such a staple in my team is that Sam just gets it. You know, have you ever met those people where you can just have such a good conversation and talk about things that you can't normally talk about and it just flows so nicely? Well, Sam is one of those people for me.

She helps cultivate creativity, thoughts, ideas for me and the business and our conversations are just always so good. So she came down to see me one day and we decided to just flip the switch and turn the mic on and have a conversation. And as always, it was a really good one. And a lot of our conversation ended up circling around the fact that my daughter is 16 and just got a car and ended up having equity in it. And so we even made a follow-up episode to this one of exactly how she did that because it was, there were a lot of really cool lessons in that. And so it is my pleasure to introduce you to Sam while we have one of our incredible conversations.

And be sure to tune in next time so you can hear exactly how a 16-year-old acquired a car and started with equity.

So when it comes to raising kids and teaching kids about money, I think there are a lot of different ways that we can do it, right? And I mean, like the podcast is called Always a Never About the Money.

When Kyra, my daughter, started to get close to 16. IWI had been prepping her for years, right? To just let her know that like my strategy with giving, you know, helping you when you turn 16 to get a car is that I will match your effort. I will match your energy. Like I will make sure to help out, help out and do my part. And so leading up to it, I had a little SUV and I had decided that I was going to just give her the SUV. It's a good little car. It was also nice 'cause I can fit my dog in the SUV and I have a great Dane. So it's, he's a beast and he, he's never gonna fit in a car, ever.

And so I gave my daughter the car. And now here's an important piece of information too, because the whole point of me sharing this story is to share how my 16-year-old built equity for herself and what went into her doing that. I think I had a total of about $2,700 wrapped up into this car. And I had gotten it like three years ago. Now, the reason why the car didn't cost me that much is because my husband at the time, my son's father was and is still a mechanic. And so sometimes these cars come through the shop and something is so wrong with them that the owners don't want to pay all that money to have it fixed.

They'd rather just buy a new car. And so sometimes these mechanics can snatch these cars before they go into the sales room and you know, they might get less for like trade-in value or something like that. So we got the car in one of those situations, it was a deal when we got it, the transmission was blown. We put some money into it to fix the transmission, but because he was a mechanic, we didn't have to pay that. So already this car had equity going into it, right? So when I gave it to Kyra, I had gotten a new car so that I could preserve this one for her first car. And the trade-in value on this car was a thousand dollars.

Well, we knew that we could turn around and sell it for $3,000. And at that point, you know, going back to my original, what I had been telling her is that I will match your energy. I will bring to the table what you bring to the table. And so at this point, she had maybe $2,000 in savings.

And that is from a little bit of babysitting. Most of it was like Christmas and birthday money that she just held onto because saving is something that I have been doing for her since she was born. And as soon as she could understand the idea of saving, I brought her into the conversation. So we would, at a very young age, she would get money for her birthday, say it was $50. And I would be like, okay, we have $50, we're gonna put 20% in savings. And I would just tell her what dollar amount, you know, that is. So even from the years when she was first even able to understand these things, it's always been normal and understood to her that of the money that we get, we put some off to the side, right?

And I think that's one of the most important things that we can teach kids, because that is a habit. That is a habit that is easy to be taught and ke kept, but very hard to learn and undo if that's not how you start. So at this time, she had about $2,000 in her savings account. I knew that we could get about $3,000 for the car. And so I came to her and I was like, okay, here's the deal. I'm giving you the the SUV and you have a choice. You can keep it and save your money or you can sell it and get something else with all of the money that you have. And she decided very quickly, she was not excited about driving a Ford Edge.

She never wanted to drive that thing, but she decided very quickly that she was going to sell it. And she did. And she got, I think $3,000 on the dot. And so she had a certain amount of money that she could spend on a car. It was about $9,000 that she could spend on a car. And so this whole time we're having conversations with her, I'm having conversations with her about what to look for in a car, what to consider, right? And for the longest time she wanted a Camaro. She was dead set on a Camaro. That is a terrible first time car, especially in the Midwest with our winners. And that front wheel drive like that was a terrible decision.

But like, here's the thing that I was willing to do. I was willing to let her make that bad decision.

She had been informed.

We had also found out that a lot of the Camaros were owned by people who simply didn't take care of them. And so, you know, getting a car like that, she was also looking at potential repair costs and spending her maximum budget. She didn't have extra money for these, you know, potential repairs that have an unknown dollar, you know, price tag on them during the time that, you know, she was looking for a car, she was also being educated on her options. It was a process for us. So here's the, here's one of the big reasons why my 16-year-old was able to create equity for herself. One of the very big reasons is because her, my, my ex-husband is still a father figure to her.

And she consulted him. She reached out to her network.

You would be surprised when you just put it out into the world and talk to the people around you about what you're trying to do at the resources that will be offered to you.

And when it comes to money, utilizing your resources is one of the best things that, that you can practice. And so for her and us, one of our resources that contributed to this situation being possible was the fact that he is a mechanic.

And even to that end, we gave her the independence and we expected of her to do the work. So she was on Facebook marketplace, she was on cars.com, she was looking for Camaro's, he would give her a list of look for cars, but if it doesn't meet all of these checkbox requirements, don't send it to me for review, right? Like, if you can find a car that fits, that marks all these check boxes, send it to me. I'll give it a look over, we'll see if it's worth going and driving to, to see it. And so she did. And not only did she find the cars that she was interested in, but she engaged in conversation with the sellers.

Like she was having conversations and asking questions and you know, is there anything wrong with it? And you know, for example, one guy messaged her back and said, well, yeah, this part needs this and that. Well, she has no idea what that is, but she Googled it and she got an idea of what the part was and then even ask the follow up question. So I was really, really proud of her for utilizing her resources and taking the initiative. And look for those of us that have kids, it is really freaking hard to find motivation sometimes.

And that's another reason why I was willing to be flexible with this situation, because it takes a lot for my daughter to be motivated like that. And the hustle and the grind and the willingness that she showed during the process of finding her first car, I've never seen in her before. So I let it ride and we just continued to be the bumpers for her decision making. And we had a few hiccups, but like, there's lessons in everything, right? Like we went to go see a car, it was like an hour and a half away. So we're talking three hours drive time that were invested into just going to look at this car. And the pictures looked great.

It had all the check boxes marked that that needed to be marked when we got there. And there were already red flags, mind you. So one of the red flags, for example, was they weren't gonna, they didn't wanna let us go to somewhere where we could put it on a lift. And so that, you know, my son's father could check it out and investigate further. They didn't wanna do that. That was a flag. And we told her this and she wanted to go anyway. So what we knew is that her instant gratification was kicking in. And when it comes to money, instant gratification will kill your saving and investing plans because it's a, it's a habit again, right?

Like credit cards, the basis of credit cards is that it gives you instant gratification. It doesn't matter if you have the money to pay the credit card, you can buy it now. Worry about that later. Well then we get so used to, I'm just gonna swipe, I'll worry, I'll figure it out later, right? I'll borrow money from so and so, or I'll work a few extra hours. We're always in the habit of spending ahead of our budget with those things. And so she had a case of that when we went to go see this car. And so we talked and, and we decided, okay, despite the flag, we're gonna do it. We're just, we're gonna give it to her 'cause she has been putting in so much work, so we're gonna go check it out.

And when we got there, they ended up finding two leaks on the car. The car was in bad shape in the inside and it was such a disappointment for her. Like she actually cried, but she had what it took to walk away.

And that was the muscle that I was grateful that she was able to exercise in that situation, was getting her hopes up, seeing it wasn't a good fit, having the option to make an impulsive instant gratification decision or walk away and wait for what I know that I'm gonna be better off with. And it paid off because she ended up finding a cute little BMW when it got posted, it was actually underpriced. So that's another piece of this. How did she get equity at 16? There's like, you know, it's almost like the stars aligned, but the car was listed for less than it was worth. And just so happened that the seller was a man of his word.

And he was like, you know what? You reached out to me. I'm gonna honor this price if you want it. And she, she got it.

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