From Piggy Banks to Portfolios: Ric Edelman’s Guide to Financial Habits for Every Generation
What’s the best way to raise financially responsible kids? Or pick the right financial advisor? Or make the most of your mortgage and investments without falling for scams? On this episode of The Truth About Money, Ric Edelman and guest Michelle Singletary covered exactly that—and more. Whether you’re a parent, a young investor, or someone rebuilding after a financial setback, this episode packed in powerful advice for every stage of life.
- Teach Kids Smart Money Habits Early
According to Ric Edelman, the best time to start teaching money management is when your kids are young. Use a simple system: if your child earns or receives money, split it into four parts:
Spend a little right away (for fun)
Save a little for a big goal (like a bike or tablet)
Give a little to charity (to instill generosity)
“Tax” a little (to mimic real-world income taxes)
Here’s the twist: that tax money isn’t really gone. You secretly save it in a high-yield account for a future expense like college or a first car. It’s a clever way to teach responsibility while also funding their future.
- Maximize Your 401(k) But Don’t Stop There
Ric reminded viewers that participating in your workplace 401(k) up to the employer match is the bare minimum—you should aim to contribute the maximum allowed if you want real retirement security.
But don’t stop at retirement accounts. Saving outside of a 401(k) builds flexibility and helps you reach other goals. Historically, the S&P 500 has returned just under 10% annually since 1926. So, if you’re diversified and patient, compound growth will reward you. Just don’t assume 12% returns. Ric recommends planning around 6%-9% to stay grounded.
- Should You Refinance Your Mortgage? Maybe
A caller asked if refinancing a 15-year mortgage to a 10-year term makes sense. Ric countered with a surprising suggestion: consider refinancing to a 30-year term instead. Why? Lower monthly payments = more cash flow. That extra cash could be invested for 10-15 years and potentially grow faster than your mortgage savings. You can always pay the loan off early if you want but this way, you have options.
- Choosing the Right Financial Advisor
Ric was blunt: “Your advisor isn’t there to beat the market. Their job is to help you reach your goals.” That means your advisor should ask about more than just investments. They should understand your income, debts, risk tolerance, and long-term vision.
If they’re focused only on recent performance or pitching high-commission products, that’s a red flag. You need someone who can guide you on everything from taxes to mortgages to employee benefits.
- Cash Value Life Insurance? Not for Everyone
One woman called in about her 22-year-old son’s $10,000 in cash value from two whole-life insurance policies. Her advisor recommended using it to buy a universal life policy worth $180,000.
Ric’s reaction? Fire the advisor.
Why? Her son doesn’t have dependents, so life insurance isn’t a priority. That cash should be invested in mutual funds or ETFs instead, where it can grow without the hidden fees and commissions that come with permanent insurance products.
- Michelle Singletary on Tough Love and Gratitude
Michelle Singletary, personal finance columnist and author, shared wisdom from her grandmother, who raised five grandchildren on a $13,000 income. No debt. Bills paid on time. Mortgage-free by retirement.
Michelle enforces the same financial discipline with her kids limiting their clothing budgets, teaching them to save, and refusing to fund entitlement. “Live on less than you make,” she says, “and you’ll always have peace of mind.”
- Entitlement Culture Is Costing Us All
Michelle warned that the need to “keep up” with others clothes, tech, cars leads to overspending and dissatisfaction. The solution? Shift your mindset from scarcity to gratitude. Instead of striving for more, appreciate what you already have.
This isn’t just about budgeting it’s about finding contentment and raising kids who aren’t caught in a cycle of consumerism.
- Don’t Fall for Debt Elimination Scams
Desperate to get out of debt? Ric warned against companies offering quick fixes. If a firm promises to wipe out your debt fast or charges upfront fees run.
Instead, turn to trusted resources like nonprofit credit counseling agencies, some of which are listed on truthaboutmoneytv.com. Debt is real, but with patience, planning, and trustworthy help, it’s manageable.
Bottom Line
Whether you’re just getting your kids started with money or rethinking your own retirement strategy, the principles shared in this episode are timeless: save early, spend intentionally, and stay skeptical of flashy promises. From teaching taxes with allowance to choosing the right advisor, Ric Edelman and Michelle Singletary showed that financial wisdom isn’t about being flashy it’s about being prepared.
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