CentSai: Cary Carbonaro On Teaching Kids Delayed Gratification

This article was originally published in CentSai.


Cary Carbonaro: Teaching Kids Delayed Gratification

A Childhood Money Lesson


Sam X Renick: What is the most important money habit you learned as a child? Briefly share the story of how you learned the habit and what impact it has had on you throughout your life.

Cary Carbonaro: I saw that my dad made the money and my mom stayed home. I wanted to be the one who made the money. I also saw the dynamic of fighting over money. The parent who had the money seemed to have more control over decisions.

I also learned the value of budgeting. I got an allowance and learned when to save, spend, and gift.


Being able to budget was an amazing skill. It’s lifelong, and everyone needs to know what’s coming in and going out.


Even kids need to learn the value of a dollar and sacrificing to save for what you want. For example, if I wanted a Barbie and my allowance was $5 a week, I would save $1 a week for 12 weeks to get that $12 Barbie. It is kind of like the marshmallow study done at Stanford in the ’60s. It is all about delayed gratification, which is a big lesson to learn early.

I’m an excellent budgeter. I have always spent below my means. I always say that if you spend less than you make, that is where financial freedom comes from. Most people think that a budget is . . . like a diet. But it’s not about not spending — it’s about spending less than you have. It is the most important lesson to learn and to teach children.

Credit cards were an invention for convenience, but unfortunately they get many people to overspend. It comes back to learning to delay gratification. If you can’t pay your credit card balances off in full when you get the bill, you can’t afford it. A person should either pay cash, not buy the item, or save up so they can pay their credit card balance off in full.


The Most Important Money Lesson to Teach Kids


Renick: If you could only teach a child one money habit, what would it be?

Carbonaro: That money doesn’t grow on trees. Kids need to know the value of a dollar. When my nephews ask me for an Xbox, I make them do math. I have found that it’s one strategy that helps them develop a better understanding of the value of money. Then I might ask them questions like, “How many hours would you have to work at minimum wage to buy it?” If minimum wage is $7.25 an hour and the Xbox costs $269, my nephews figure out they would have to work 37 hours to buy the Xbox.


A Final Thought: What If the Research Is Wrong?


Renick: Cambridge University research indicates, adult money habits are set by age seven? What if the research is wrong and adult money habits are formed earlier than age seven — perhaps around the age the “give mes” set in? What does this mean for families, schools, and the financial education industry?

Carbonaro: It’s like the marshmallow study at Stanford in the ’60s and ’70s. It’s all about teaching about delayed gratification. Also showing why waiting to spend will be worth more in the future (i.e. the time value of money). At that young age, it helps if you gamify these topics. Maybe there’s an app for that. I also believe children learn by watching positive and negative examples from adults in their lives. I was recently with my niece, and she told me that a person is “soooo” rich.

“How do you know?” I asked.

She said that they have a big house and expensive cars and clothes. I said that you don’t know that person has wealth. What if they borrow all their money and have high credit card and mortgage debt? I said you have to look under the hood and see their assets and liabilities. I explained that that’s what you own and what you owe. Some people who you might think are rich might actually have a negative net worth. I think I may have blown her mind!


This article was originally published in CentSai.


Get The Money Queens Book by CFP MBA Cary Carbonaro

Cary Carbonaro is listed in the Notable Women in Finance

Cary Carbonaro listed in Notable Women in Finance


The New Yorkers named to this inaugural list of Notable Women in Finance in New York City are pioneers and leaders in the world of finance. They are founders, managers and executives.


Crain’s Notable Women in Finance


In addition to their careers on Wall Street and beyond, many of these women are engaged in exceptional philanthropic activities, ranging from sitting on the board of major cultural institutions to working as mentors, championing diversity and boosting the careers of other women.

By highlighting these women, Crain’s is acknowledging a talented group whose members are defined by more than their gender. They are remarkable first and foremost for their achievements and commitment to excellence in the financial industry.

That’s especially noteworthy, given that not long ago, women weren’t even able to take out business loans—let alone run the institutions that provide them. In fact, this year marks the 30th anniversary of the passage of HR 5050, the Women’s Business Ownership Act, which ended discriminatory lending practices that favored male business owners, including laws that required women to have a male co-signer on business loans.


“In some cases, women couldn’t even buy a car, even if they were going to pay cash,” said Beth Goldberg, district director of the U.S. Small Business Administration.


Three decades later, women own about 30% of all the small businesses in the United States, contributing $1.7 trillion to the economy.

The lenders who once restricted the purse strings—whom women could only approach with a man, even if that man was their
18-year-old son—are now women themselves.


Meet the inaugural class of Notable Women in Finance


Notable Women in Finance - Cary CarbonaroProfessionals whose resumes boast outstanding achievements in the industry and substantial community involvement.

Our list begins with nine trailblazers who have achieved business success and paved the way for women in the industry—and continues with the full list of notable honorees whose stories are equally inspiring. As the year goes on, look for future installments in this series, which will recognize notable women in a variety of industries.



KBK Wealth Connection features The Money Queen

This article was originally published in KBK Wealth Connection


5 Books to Improve Your Financial Literacy


We are celebrating Financial Literacy Month at KBK Wealth Connection. April was officially declared Financial Literacy Month in 2003 by Congress and I want to share some of my favorite books that will help you improve your financial literacy.



1. Raising Financially Fit Kids

Author: Jolene Godfrey

Great book for parents who want to empower their children at various stages of their development.


2. On Your Own Two Feet: A Modern Girl’s Guide to Personal Finance

Author: Manisha Thakor and Sharon Kedar

A perfect fit for the twenty-something in your life who is transitioning from living at home to living in the “real world.”


3. Age Proof

Author: Jean Chatzy and Michael F. Roizen

Aging talks with our parents and our partners can be challenging. A great book to spur conversation and learn together.


4. The Money Queen’s Guide: For Women Who Want to Build Wealth and Banish Fear

Author: Cary Carbonaro

For the woman who wants to be more proactive about her finances but is uncertain how, Cary shows you how.


5. The Feel Rich Project

Author: Michael F. Kay

A wonderful blend of financial psychology and concrete know-how to help you feel more balanced in your relationship to money.


This article was originally published in KBK Wealth Connection


Get The Money Queens Book by CFP MBA Cary Carbonaro

MarketWatch: Should we divorce so my husband can get more Social Security?

This article was originally published in MarketWatch


Dear Moneyist,

My husband and I are soon to be retired. I have saved in a 401(k) and have pension benefits. He owned a small business for many years, but never created a nest egg for retirement. He is a vet. He may be entitled to more Social Security if he’s single. We thought about divorcing and coexisting to ensure we can make ends meet throughout retirement, but that means placing our modest home in my name only, right? – Kim


Dear Kim,

There is no marriage penalty or limit to benefits paid to a married couple.

And that’s a direct quote from the Social Security Administration website. “A working woman is not limited to one-half of her husband’s Social Security,” the site states. “(That rate applies to women who never worked outside the home.) So, for example, if you are due a Social Security benefit of $1,200 per month and your husband is due a Social Security benefit of $1,400 per month, you will be paid $2,600 per month in retirement benefits.”

There’s no point in getting divorced for monetary reasons, although I’ve heard of people staying together for the health of their finances (joint health insurance policies and lower housing costs). “Since you have a pension when you are married, the spouse gets it as well if you pick the joint life option,” says Cary Carbonaro, a certified financial planner and managing director at United Capital. “If you were not married, you would not get that option.”

What’s more, home ownership is excluded from your qualification for Social Security. “As for your husband’s veteran status, his time in military service can boost his lifetime earnings record as far as calculation of his Social Security benefit, which can result in a higher benefit, but it does not add directly to his monthly check,” says Kimberly Foss, certified financial planner and founder of Empyrion Wealth Management.

That 10-year marriage rule is good for people who actually want to divorce, if you remain unmarried post-divorce and you’re over 62 years of age. “Sometimes, divorced spouses can both claim full spousal benefit and allow their own benefit to grow until age 70,” Foss adds, “but the actual benefit amount varies by age and employment status, so you should do some careful calculation using both married and divorced scenarios and your current data to make sure of which way makes the most financial sense.”

Talking to a financial adviser instead of a divorce lawyer would be far less costly.


This article was originally published in MarketWatch


Get The Money Queens Book by CFP MBA Cary Carbonaro

Investment News: Cary Carbonaro’s experience in the land down under

This article was originally published in Investment News


Australia’s money culture diverges from the U.S.’s given its higher standard of living and stronger retirement saving system.


Earlier this year, I spoke in Australia at Real Women Global, a women’s empowerment organization, about my experience as a woman in the financial services industry.

During my travels, I met fellow certified financial planner professionals from many major regions in Australia. Although we share many similarities, I discovered real cultural distinctions in how Australians save and invest, and how women find their way in the world of finance.



Much like their American counterparts, Australian advisers focus on goal-setting and retirement. In Brisbane, I found women who echo the financial life management ethos increasingly adopted by forward-looking advisers in the U.S. Called “goals coaches,” they focus on making clients feel safe and comfortable with engaging in financial planning.

These “soft skills” prove to be increasingly relevant in our industry. As FinTech advances automate more asset management activity, it is incumbent on advisers to show their value by helping clients with big-picture goals and problems. I would love to see more Australian-style goals coaches here in the U.S.

The CFP certification is a mark of distinction in Australia as it is in America (CFPs are recognized in 26 countries across the globe, according to the Financial Planning Association of Australia). There are about 5,500 CFP professionals in Australia’s population of 23 million, proportional to the approximately 79,000 or so CFP professionals who serve the 319 million people in the U.S., according to the CFP Board.

Our money cultures diverge in Australia’s higher relative standard of living and superannuation, a retirement vehicle with stronger governmental support. Every employer must contribute a minimum of 9.5% of an employee’s wages for retirement. An average Australian can expect about 20 years of retirement based on employer contributions to their superannuation. A large amount of Australian’s net worth is in their homes, while their health insurance costs are generally lower.

  • Most financial planners in Australia make a significant portion of their revenue on mortgages. Their interest rates on CD term deposits are extremely high at about 2%-3%, compared to U.S. CDs, which earn less than 1%.


  • Australians have a high standard of living — in 2016, annual earnings were approximately $78,832 a year in U.S. dollars. If overtime and bonuses are included, it’s $81,947 per year, according to the Australian Bureau of Statistics.


  • • Their minimum wage is one of the highest, at $18.29 an hour in Australian dollars, according to the Australian government’s Fair Work Commission, which comes to around $14.30 in U.S. dollars.


  • Advisers counsel clients in debt, which means they can work with anyone. They work a lot on cash flow because most people have money in their superannuation and in their home.


  • Australians spend much less for insurance than we do — approximately $300 a month for a family plan. Most hospital visits cost more out of pocket. A two-day hospital stay and operation generally costs $20,000.


  • Long-term-care insurance does not exist. In my conversations with advisers, they could not believe we even had that as an option in the States. They shared stories of many people having to sell the family house and deplete their assets to pay for nursing home care for an older member of the family.


  • Australian advisers have to have their clients re-sign an agreement to work with them each and every year.




As I am accustomed to dealing with American 401(k)s, the more robust contributions to Australian superannuations surprised me. Employees can make voluntary contributions (though the Australian Uber drivers I met did not), but employers are generally obliged to put away 9.5% for every employee. This figure is expected to go up to 12% in 2019.

Australia does offer an old-age pension, comparable to the U.S.’s Social Security, if you have less than $400,000 in your superannuation.

Australia wants every resident to have a “comfortable” retirement, which equates to approximately $66,000 a year. Workers are paid so much that in the middle of the 2017 Australian Open finals, as Roger Federer played against Rafael Nadal, they shut down the concession stands. I could not believe my eyes. I was told they were done for the day, and that it was cheaper to shut down than continue to pay the workers.




Australia’s housing market is heating up, like the U.S.’s. There’s been a recent surge in Australian house prices, thanks in part to an increasing number of foreign homebuyers, who accounted for more than 20% of property purchases each year, according to the Sydney Morning Herald.

All real estate transactions in Australia are done by auction, rather than a regular sale. While the recent influx in real estate is noticeable, the debt ratio is very high. The average price of a home is $600,000, so most have to be leveraged. Prospective homeowners borrow four times their salary for a home, according to Canstar, Australia’s biggest financial comparison site.

Housing prices in Australia’s two biggest capital cities, Sydney and Melbourne, are between 25% and 30% overvalued, according to ABC News Online. The 2008 global financial crash only temporarily halted the climb of Australian housing costs, compared to some markets in the U.S., like Florida and Nevada, where prices dropped as much as 40%.




At Real Women Global, I was asked whether I have children. When I told them about my grown stepson, most of the attendees said there was no way I could have had my career and had children. In Australia, they said, women have to make a choice because they can’t afford nannies, a luxury reserved for the wealthy. In Australia, it is either high-powered careers or kids.

Australian women, like those in the U.S., lack easy access to highly credentialed female advisers. I was curious to learn how many women were CFPs, but couldn’t get statistics. But there are estimates that 20% of Australian CFPs are women. About 23% of U.S. CFPs are women, and that percentage has gone unchanged for the last decade, according to The Wall Street Journal.

Australians do not generally practice a “Take Your Daughter to Work Day,” nor do they have a variety of strong female voices in personal finance. The women I met reacted with surprise when I told them to take ownership of their own financial future. While they told me they loved credit cards, most of the women I spoke with didn’t have them.




While Australian investors enjoy real advantages and face distinct challenges compared to their U.S. counterparts, their motivations are universal. They want to be free from debt and money worries. They want to give back to the world around them and live better lives. They want to make sure their families are OK.

I believe that we should never pass up an opportunity to see financial planning through the lens of foreign cultures. We can celebrate and learn from our differences and build bridges through our similarities.


This article was originally published in Investment News


Get The Money Queens Book by CFP MBA Cary Carbonaro

5 Times Following the Crowd Can Really Cost Us

This article was originally published in Grow- from Acorns.


Cary Carbonaro Blog



We may be a lot more open-minded as a society than generations ago, but some ideals die hard. “The American Dream is still deeply embedded in our psyche, and the heritage of how successful someone is in our culture is often measured by materialistic things,” says Maggie Baker, PhD, author of “Crazy About Money.”

And that can spell trouble for our finances. But because certain tenants, like the five below, are so ingrained, we rarely question them.

Well, here’s your chance. Before undermining your nest egg, reconsider whether these axioms are truly in line with your values and your budget—or if it’s time to flip the script.


1. You should… spring for (or wear) an engagement ring.


Decades after diamond company De Beers told us, “a diamond is forever,” and encouraged men to spend several months’ salary on a rock before popping the question, couples are spending more than $6,300, on average, on engagement rings.

That’s a pretty penny for something that holds as little as 20 percent of its original price tag—which is why Certified Financial Planner Cary Carbonaro warns against racking up debt to buy one. “You should have the resources to either pay cash for the ring or pay back the money within the next month,” she says.

If you can’t, there are plenty of cool, budget-friendly alternatives to consider, like non-precious center stones or vintage or heirloom rings. Or you might forgo a ring entirely if you realize spending thousands for jewelry doesn’t align with your priorities after all.


2. You should… splurge on a blowout wedding.


What better way to celebrate the Big Day…than with wallet-crushing costs? The average wedding topped $35,329 in 2016. (In contrast, the median household income is $58,000.)

Like the engagement ring trend, over-the-top weddings are a new phenomenon—likely thanks, in part, to intensified peer pressure from social media, says Carbonaro. In 1939, 16 percent of brides got married in clothes they already owned, and one-third skipped the reception and honeymoon.

Today, 21 percent of couples go into debt due to wedding costs—and that’s no way to start a life together. “People think they will get the money back in gifts, but they never get that much,” Carbonaro says. “Think about all the other things you could do with that money,” from buying a car to putting a down payment on a home. If you’re set on throwing a big bash, get creative about cutting costs without compromising fun: Hit up the local farm market for sunflowers, use online invitations and skip the band in favor of a DJ.


3. You should… buy a home.


It’s a cornerstone of the American Dream, but home ownership doesn’t make sense for everyone. For starters, due to pricey closing costs, it’s generally only financially sound if you’ll stay put for at least five years. That’s rarely realistic for job-hopping millennials, 91 percent of whom expect to stay in their current job for under three years.

And don’t overlook the sense of freedom inherent in renting—not only can you pick up and go if your life shifts direction, but you’re not responsible for the hassle and cost of repairs, maintenance and property taxes.


4. You should… pick a profession you love.


Follow your passion. Don’t settle. Do what you love, and you’ll never work a day in your life. These idealistic notions aren’t always attainable; sometimes, they don’t even yield happiness. “Millennials grew up believing they could do anything,” Baker says. “This mindset makes it difficult to accept the idea of putting limits on their dreams—but the conflict between finding meaningful work and being well paid is much greater now.”

Before chasing that dream job, take an honest assessment of your skills and what’s important to you—including unsexy stuff that can hugely influence your well-being, like your commute, pay and work hours. You can also give yourself a deadline: Pursue a music career for a year, for example, then reevaluate if it’s bringing you satisfaction—or if you might prefer playing guitar in your free time instead.


5. You should… lease a nice car.


One-third of millennials who purchased a new car in 2016 chose to lease. “This generation wants instant gratification,” Carbonaro says. “Leases make it possible for them to drive a car that otherwise they’d never be able to afford.”

But what are you sacrificing in exchange for riding in a Mercedes? Do the math: Spending $500 a month for a luxury car equals $6,000 a year that could go toward an emergency fund, retirement accounts or other savings goals—and that’s not counting the cost of premium gas and insurance.

“If you want to have the same car for at least four years, or drive more than 800-1,000 miles a month, you should buy,” Carbonaro says. “The longer you hold onto a car, the lower the cost of ownership.”


This article was originally published in Grow- from Acorns.


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