When Dad Is a Mum

Dear Scott,

We are two mothers -- a couple wanting to have a baby. We finished reading your book a couple of weeks ago and have started implementing the strategy. The trouble is, I have never wanted to have kids until I had enough money, but my partner wants them as soon as possible. And I admit the biological clock is ticking. We both work but have next to no money. I thought you may be interested in a same-sex couple. We too have financial troubles ... it is not easy, that’s for sure.

Annie

Hi Annie,

On one hand, you wouldn’t be the first broke parents to decide to have a kid.On the other hand ... what the bloody hell are you thinking?

Look, I don’t care if you’re gay, straight or polygamous -- you need to take responsibility for your financial situation before you can take on the ultimate financial responsibility of having a child. You’ve read the book, so you’ve got your road map -- now it’s time for wine, garlic bread … and action.

Scott

The Present I Gave Malcolm Turnbull

Last week I sat down one on one with the Prime Minister.

A journo from a rival rag snivelled, “He’ll answer questions from hosts who aren’t wearing shoes” … which, unless Malcolm has been doing vox-pops with homeless people, is a swipe at yours truly. (And for the record, I not only wore shoes, I even donned my wedding suit jacket for the occasion.)

Anyway, I found him to be a good bloke — though maybe that’s because we’ve got a lot in common (like me, in his line of work he tends to upset people, and, like me, he’s even been known to cop it in the neck from his own … err … kitchen cabinet).

The video is on the Barefoot Investor Facebook page … but here are some of the highlights from our chat:

(note the shoes)

Power to the PM

Barefoot: You’ve recently given the energy retailers a slap. I’ve saved $540 on my power bill by going to energymadeeasy.gov.au. Have you run the numbers on The Lodge?

PM: (laughs) Well, I’m pretty sure my son-in-law has …  but I must say your savings are representative of what a lot of people are making by switching.

Financial Education in Schools

Barefoot: Something close to my heart is financial education. The Commonwealth Bank is one of the biggest providers of financial education in schools. Do you think there’s a conflict of interest in having the banks teaching kids about money and then getting them on a database to sign up as customers?

PM: Well, um, I can understand that argument but I think the important thing is getting plenty of people in schools giving that financial education. I mean financial literacy is critically important as you say, so it’s a fair point, Scott.

Barefoot Community Q&A with the PM

Barefoot: Now to some questions from our Barefoot Investor community. Laurie asks, “Why does our government continually reduce the amount we can salary-sacrifice into super?”

PM: I don’t think it’s fair to say we continually reduce. We made some changes in the last budget to make the super system fairer and more flexible, but we don’t have any plans to make any other changes.

Barefoot: Elle asks, “Why is so little being done to help housing affordability? There are so many tax deductions for property investors, like negative gearing, but those of us trying to buy just one home get jack!”

PM: You’ve got to recognise that there’s nothing special about negative gearing … It’s been part of the income tax system since the Income Tax Act was passed in 1911.

(Barefoot aside: Though in 2005 he agreed with you, Elle, labelling it ‘tax avoidance’.)

Barefoot: Finally, I’d like to give you a copy of my bestselling book. I think you’ve got your money sorted, but you might want to give that to ScoMo — it could help him balance the budget.

PM: (laughs) Thanks very much, Scott.

Tread Your Own Path!

Divorced Dad Wants to Win

Hi Scott,

As a dad, how do I best set up my son financially? He’s four, and I'm planning ahead! I am 42, separated, and renting. I have no debt other than a mortgage. My total assets are $20,000. I am on a low training wage now (midlife change of career) but if I pass I will be earning up to $100,000. So, do you suggest saving or investing for him in his name? Or building up my assets so I can provide a home?

Tim

Hi Tim,

You’re already making the right long-term investment for your son -- by lifting your income to six figures, you’re going to be able to buy yourself long-term financial security. When you have your money sorted, you’re free to focus on the things that really matter. Your son doesn’t care about what car you drive, whether you own or rent your home, or how much money you have in your bank account -- all he really cares about is spending time with you. What more status do you need? You’re the man!

Finally, I’ll tell you this: handing a kid a huge cheque on their 21st birthday sometimes does them more harm than good. If you really want to build your son up, invest the time you have with him right now. Do ‘jobs’ with him, and pay him in gold coins into three jam jars (‘Save’, ‘Spend’, and ‘Give’). That’ll do more to shape his values than almost anything else you could do.

Scott

Chasing Ghosts

Hey Scott,

I am a 32-year-old soon-to-be father (with my beautiful fiancée). In the past, my spending was out of control, causing me to rack up $55,000 in credit card debt and a huge car loan. Now all of that bad debt is history and we will soon be settling the purchase of our first house in the suburbs. But I feel that the ghost of reckless consumerism still lingers in my past. How do I stop this poltergeist from infecting my children and plunging them into a life of bad debt?

Nick

Hi Nick,

You’re not the first bloke who was a little loose when he was younger. And you’re also not the first bloke who has cleaned up his act in the face of the impending Triple Ms (marriage, mortgage and midgets).

My view?

You’ve clawed your way out of a heap of debt and got yourself in a position where you and your fiancée are buying a home for your family. There’s nothing loose about any of that, mate. Besides, the fact that you’re admitting you’re packing your dacks about the awesome responsibility (and privilege!) of providing for your family tells me you’re up to the challenge.

Finally, remember it’s not your money anymore. It’s your family’s. You’re not a single bloke, you’re a team! So do the Date Nights I speak about in my book -- once a month get a babysitter (or grandparents), take your wife out and, over a glass of wine, make joint decisions about your finances. It’s one of the best things you can do for your marriage -- and your stress levels!

Scott

What Motivates Me

When I was younger, I was motivated by trying to attract women (largely unsuccessfully, but that’s another story).

That was a long time ago.

These days, I’m a dad, and my motivations have changed. It does have an upside though, I now get to wear the same jumper and chino combo most days (it’s my dad uniform), and I couldn’t care less if women looked at me … and they still don’t!

As a Dad, the thing that really motivates me now is being a hero to my kids.
(My wife? Well, the polish has worn off me, but, like a comfy pair of boots, she keeps me around.)

And let me tell you, it’s hard work impressing my boys.

Take this week, when I proudly announced:

Barefoot: “Today I’m meeting the most important man in the country!”

Four year old: “Donald Trump?”

Barefoot: “No … the Prime Minister of Australia!”

Four year old: “Does he know Jimmy Giggle?” (The ABC Kids host).

Barefoot: “No, I don’t think so … ”

Every DIK (Dad I Know) is motivated at a deep level to be a hero to their kids. (Of course, the only one who really nails it is Jimmy Giggle … he’s got it all sorted out.)

The thing fatherhood has taught me is that deep down your kids aren’t impressed with what car you drive, or the suburb you live in, or the clothes you wear, or even the fancy-pants people you get to meet in your job — all they really care about is spending time with their hero.

Pediatrician Meg Meeker, in her book Strong Fathers, says that if dads could look at themselves through the eyes of their kids — and see just how big and important and powerful they are to them — that’s all the status they’d ever need.

And to celebrate Father’s Day, this week’s questions are dedicated to dads …

Too Young to Be Barefoot

Scott,

I do not have a job or any real income, besides weekly allowances and lunch money, because I am only 15. I picked up your Barefoot Investor book (thought it might be an interesting read) and am halfway through, but I can’t really relate because I can’t save up or anything like that. Anyway, my question is, how do I make sure that I never have to turn my life around financially and that I am ready for any financial fires that come my way?

Oscar

Hi Oscar,

Truth is, I get a lot of teenagers who write to me with concerns like yours. Often it’s because they’ve grown up in homes where a lack of money was a big problem. Often they learn what not to do from their parents.But you know what, Oscar?

The cool thing is that it doesn’t matter who your parents are, or where you’re from, or what you look like, or whether you’re good at sport, or how popular you are.

All you need to do is build some ‘million dollar habits’: work hard, save, and compound your money.

Money is the great leveller in life. All you have to do is have at least a passing interest in it, early enough. The fact that you’re reading a finance book and not on Snapchat tells me you needn’t worry about any financial fires. You’re going to tread your own path!

Thank-you for reading!

Scott

How to Save 98% of Your Income

Hi Scott,

My mum and I always read your column, and it is one of few times we stop arguing and have great discussions. I am in Year 11 and interested in sports journalism and management. I have worked at KFC for 18 months and saved 98% of my pay, just over $3,000. Thinking ahead to next year when I get my licence, I will not be able to buy much of a car so I was hoping to invest some of my savings. Would be grateful for your advice. Oh yes, and I turn 17 soon, so your book would be a wonderful gift, don’t you think! 

Mark

Hey Mark,

First of all, congratulations on being a saver; it’s the number one habit of financially successful people.

However, the ‘11 secret herbs and spices’ on how you’re able to save 98% of your pay packet is … it’s your mother who’s picking up the tab. Finger lick’n good!

So what should you do?

First, put $500 into a Mojo account, so you can stand on your own two drumsticks.

Second, if you’re focusing on long-term investing, think superannuation. Just make sure you’re not getting screwed with fees on your super, and think about opting out of the expensive (and automatic) life insurance while you’re young and still living at home.

Third, start researching what wheels you can buy for around $7,000 (like, say, an early noughties Subaru Forester … rugged, urban, yet understated), and then apply your hard work and savings ability until you get it.

Oh, and if you’re saving 98% of your income, buy your own bloody book … better yet, buy one for your lovely mum!

Scott

What Young People Should Learn from Their Parents

In last week’s column you talked about young people and money. My husband and I encounter many young people, some even in their thirties, who do not know the basics about saving, super, banks, financial advisers, etc. We spend a lot of time talking them through stuff they should have learned from their parents. We are thrilled you want to change the school system to teach kids about earning, saving and giving – the proper way, with no ‘sales pitch’. Go for it! We are behind you!

Kathleen

Hi Kathleen,

I received a massive response from last week’s column. There were two main camps: teachers wanting me to kick off my program at their school, and Barefooters like you. After years of doing this, I know that many of my readers mentor young people. What an absolute privilege, right? It’s one way to positively change a person’s life. I’ll have more information on the program over the next few months. Watch this space.

Scott

Sinking Not Swimming

Scott,

My stepdaughter is a single mum in her early forties, with two kids. She earns $60,000 working three days a week, and has never owned property. She has $10,000 saved. She wants her bank to second-mortgage my house for a deposit for her in country Victoria on a house worth $350,000. I have $102,000 in credit card debt and (at most) $100,000 equity in my house. I am struggling with my own debt but I feel sorry for her and would like to help. I am widowed from my second husband. What should I do?

Linda

Linda,

It’s beautiful that you are wanting to help out your stepdaughter ... but with $102,000 in credit card debt you are clearly not in any financial shape to help anyone. It’s like someone who can’t swim diving into the sea to rescue a drowning person. Who’s going to rescue you?

Scott

Scott’s Hot Date

Dear Scott,

At 17 I am currently completing my VCE studies, but will soon have to make my own way in the world. I have $7,000 in savings and was hoping you would be able to help me find the right way to invest it so I do not just burn through it right after graduation. I am constantly anxious I will not have enough money to do all that I want, namely paying for living expenses, travel and study.

Holly

Hi Holly

Where were girls like you when I was seventeen? I would have dated you in a heartbeat!

Keep at least $5,000 in an online saver account (which Barefooters call Mojo). The return you’ll get on your Mojo is peace of mind. When you graduate, look at getting a full-time job over the summer -- preferably one that you can continue when you go to university.

If you’re living at home, you should be able to save up a few thousand dollars for your upfront expenses next year. Depending on your parents’ income, there’s also a chance you could get Youth Allowance.

My final tip is a strange one. In fact, you’re probably going to think I’m completely bonkers, but think about doing it anyway: go to kiva.org/team/thebarefootinvestor and lend some money (as little as $25) to a struggling businesswoman in the third world.

There is no need for you to be constantly anxious. You’re not only well ahead of most girls your age, you’re also one of the wealthiest women on the planet. You’ve got this.

Scott

Parents, You’re Doing it Wrong

When I was fifteen I would sit in English class and read the Financial Review.(This, of course, made me wildly popular with the ladies.)

Looking back on it I was always going to become the Barefoot Investor: I started working when I was in primary school (for coins!), and had built a prized share portfolio by high school.

Most teenagers don’t give a snapchat about managing their money.

That was confirmed this week by the results of an international financial literacy survey of nearly 15,000 students which found that, on average, 15-year-old Aussie kids struggle to understand financial basics.

“Australian students performed significantly lower in financial literacy than [international] students with similar performance in mathematical and reading literacy”, said the report.

And parents, you know what that means, don’t you?

It means that there’s a real possibility that your grunting, moody, Xboxing teenager could still be fronting up for Coco Pops when they’re in their dirty thirties …  possibly accompanied by their fiscally challenged boyfriend.

That’s actually not too far of a stretch: nearly 25 per cent of people aged 20 to 34 continue to live with their parentals, according to the latest HILDA study. And here’s the kicker: research by AMP found that a kidult (aged between 18 and 24) costs a middle-income family $678 a week, or $35,256 a year.

Froot Loops!

Well, allow me to lay out a Barefoot Bootcamp for your teenagers. Do these three things, and you’ll be able to lovingly boot your kids out when they can grow a beard (or date a man with a beard):

#1 Open Up Your Wallet

I’ve always said that the best way to raise financially fit kids is to be financially strong yourself.

Whether you like it or not, they’re modelling your behaviours: do you fight about money? Do you turn off lights when they’re not needed? Do you gamble?

When your kid turns 18, you don’t throw them the keys to the Jag for the first time, do you?

Of course you don’t.

You spend many (frustrating, potentially lethal) hours sitting beside them with the ‘L’ plates up. Their first experience driving comes with you clinging to the seat beside them.

It should be exactly the same with money.

Look, your kids are being actively targeted by the predators of the banking industry (especially if you signed them up for one of those cute little Commbank Dollarmites accounts). You need to make sure they’ve got their money miles up while they still live with you.

The best way to teach your kids about the reality of money is to give them responsibility.

Challenge them to find a lower-cost energy provider — and make a game out of it. If they can get your household bills down by $500 a year, split the difference.

Show them your bank statements, and again challenge them to find a better home loan rate, or (gulp) calculate the amount of interest you’re being whacked on your credit card.

Actually read your super statement, and have your kids calculate the amount of fees you’re paying, and see if they can find a cheaper alternative via superratings.com.au. Then head over to moneysmart.gov.au and check out their managed fund fees calculator to visualise the amount of money you could save by switching.

These are the real-life lessons that will stick with your kids.

#2 Flip it Good!

These days kids get participation trophies. Everyone’s a winner!

Uh-huh.

Kids need to understand that the world isn’t there to serve them — it’s the other way around.

Thankfully there’s an easy fix to this counter-culture: make them get a part-time job.

Every teenager should have a part-time job … preferably with a boss who doesn’t treat them like a unique special snowflake, and one that gives them a bit of acne from flipping greasy burgers.

Again, making them work isn’t really about the work, and it isn’t really about the money — it’s just another tool to give them real-world financial education. They learn to show up on time and work. To get along with other people. To deal with a tough boss (hopefully). To read an employment contract, and, if you’re doing your job right, to choose a good super fund.

This shouldn’t be an elective — it’s an essential part of their formal education. When I’m hiring a young person for my business, I can always pick who has had a part-time job through school. They’re more resilient.

#3 She’s Got a Ticket to Ride

Straight up, buying your teenager a brand new car amounts to child abuse.

Don’t do it.

The pull of owning your own wheels is strong with teenagers — especially boys. Use it. Again, hopefully you’re seeing a theme here. It’s not about the car, it’s just another tool for teaching.

So sit down and challenge your teen to save up for their first car. In reality this could involve you matching them dollar for dollar, so they don’t end up driving around in a 1966 XP Falcon like I did (safety features? Lap seatbelts). Have them research the running costs of various models, how much it costs to insure, and how to negotiate a good price.

I’m biased of course, but I see these financial literacy findings as just as important as the final year marks.

Why?

Because it’s the one skill every student will be tested on — daily — in the real world. A below average grade in money management colors your entire life; what you do for a career, the amount of time you have to spend working, the stress you will endure over your working life, your relationships, your health, and ultimately what your last days look like. This is important stuff … so start testing your teens today.

Tread Your Own Path!

Schools sell out their kids for cash

Let me give you a window into my Wednesdays ….

Every Wednesday, I’m just one of the girls.

That’s because I do the pick-up for my son at kindy.

All the mothers come in wearing Lorna Jane activewear with their hair pulled back in ponytails.

“Are you in between jobs?” one of them asked me innocently the other day.

“Huh?” I asked.

“Oh, it’s just that not many fathers pick up their sons … in the middle of the day.”

For the record, I told her that “I’m always scratching around for something to do” (unless it’s tuckshop).

That being said, I’m definitely going to play a big role in my kids’ education, especially their financial education. And if an ABC Drive radio interview I did this week is any guide, I’ve got my work cut out for me.

Let me explain:

I got a call from an ABC presenter earlier in the week, asking me to join in on an interview she was about to do with Sarah — a furious mother who’d just witnessed something unsavoury at her kid’s primary school assembly.

Now as shocking as what I’m about to tell you sounds, I promise it’s 100 per cent true (and verifiable on the ABC radio website):

Presenter: “Sarah, tell us what happened at your child’s primary school assembly.”

Sarah: “The Commonwealth Bank … did this presentation that left a bad taste in my mouth … Probably the most disturbing thing was that the female presenter was accompanied by a mascot who was someone in a costume, who was introduced as ‘Cred’, which I assume is short for credit.”

Wait a minute. Let’s have some fun:

I picture ‘Cred’ as Gary, a 34-year-old out-of-work actor, whose last role was at a theatre restaurant.

We find him backstage of the Gilmore Heights Primary School assembly.

He takes a final drag of his fag, stubs it out with his oversized yellow cartoon foot, and puts on his styrofoam cartoon head.

He’s now in character.

He’s not Gary (who, come to think of it, probably has a heap of credit card debt).

He’s Cred, a cool dude who plays by his own rules (but is also careful to follow the terms and conditions of Commbank’s credit policy).

“Hey kids! Do you want to learn about credit cards?!” he says as he wobbles out on his skateboard.

The kids stare at him in silence.

Okay, word up to Commbank’s lawyers: I have absolutely no evidence that Cred is an overweight, out-of-work actor. I just made that up. But what I could never have made up is Sarah’s account of the presentation, which is true, and even funnier, and even more tragic:

Sarah explained that the reason she and the other parents were at the assembly was to see the Year 6 play. But Cred and his banking buddies were running way over their allotted five minutes.

Sarah: “It went for about 20 minutes in the end, which took up about half the assembly and cut short the play that the Year 6’s had written and practised.”

You can picture it, right? Little Timmy and his classmates are patiently waiting in their cute costumes, nervously glimpsing at their proud parents standing up the back, who’ve taken time off work to watch their performance.

Well I’m sorry, Timmy, but your little play doesn’t pay the bills. Today you’re getting a lesson on how the real world works! When you earn $9.45 billion a year in profits — and you’re paying thousands of dollars in kickbacks to schools for signing up kids — you can stay on stage as long as you goddamn want.

But maybe I’m being a little harsh.

After all, I’m always banging on about the importance of giving kids financial education. Surely the Commbank presentation taught the kids something … surely it wasn’t just a blatant ad?

Well, no.

“The presentation was aimed at getting the kids excited, rather than having any financial literacy content”, said Sarah. “So they talked about what they could win if they made deposits, and got them to do a Mexican wave … for really no apparent reason.”

When Sarah had finished her story, the ABC presenter turned to me for my thoughts.

“Just how lame would that school assembly have been?” I said.

Yet make no mistake, signing these kids up is serious business for Commbank. The presenter mentioned that Commbank’s Dollarmites program is in 4,000 schools across the country, and that, according to a survey, two out of five people still use the same account our parents set us up with. That’s seven million Aussies who’ve never switched bank accounts.

That cute little passbook they get at age eight puts them on a marketing database that spits out a credit card when they turn 18. As I’ve said in the past, having Commbank — the biggest credit card issuer in the land — teach financial education in schools is like having Ronald McDonald teach kids about nutrition.

Here’s Your Chance, Malcolm Turnbull …

Word is that Malcolm Turnbull is pinning his political hopes on making a splash with first homebuyers in the May budget. He and ScoMo are cooking up all sorts of weird schemes in the hope it’ll buy them some love at the polls.

However, their schemes will no doubt have as much credibility as … Cred.

Giving every first homebuyer more money (or whatever Malcolm has in mind) to put towards their first home will not make property cheaper. It’ll actually make it more expensive — because first homebuyers will simply spend that much more on a place.

The main reason that houses are so unaffordable right now is blindingly obvious: the banks have lent us a record amount of debt … at a time when interest rates are at record lows.

Australia has one of the highest rates of household debt in the world. More than the Yanks. More than the Greeks. More than the Poms. And at some stage, when interest rates rise, our day of reckoning will come.

So Malcolm (or Malcolm’s junior press secretary who is actually reading this), here’s a suggestion for the May budget. Instead of giving first homebuyers another cash grab that will only serve to further inflate property prices, be the first prime minister in history to adequately fund a financial literacy program — taught by truly independent — in every Aussie school (minus the mascots).

The right wing of your party will love it: conservatives have wet dreams about promoting fiscal conservatism and self-reliance. And for what would be a rounding error in the budget, it’ll pay huge dividends in the future. Take it from a bloke scratching around for a job in the middle of the day — financial education is a core life skill. It’s too important to leave to Cred.

Tread Your Own Path!

How Not to Raise a Spoilt Brat

Recently, I received the following email:

“Hello Scott,

We’re a PR firm representing a toothpaste company. We’ve commissioned some research on how much Aussie kids get from the Tooth Fairy. Can we pay you to comment on the research for our press release?”

“No” was my firm answer.

I mean, seriously, who do they think I am … the Easter Bunny?

Still, I have young kids, so I’m inherently interested in the parental construct of the Tooth Fairy. Not that I’ve broached it with my son, Louie, for fear he’d never sleep (or eat a toffee apple) again:

“Mate, each time one of your choppers is ripped from your gums, we wash off the blood under the tap, then we pop it in a glass of water by the side of your bed. And then in the middle of the night, a fairy will creep into your room, take your tooth, and leave you some money for it. Sweet dreams!”

The survey, of over one thousand Aussie parents, found that the average payout for a first tooth has hit $3.51, which sounds suspiciously like the amount of shrapnel in your car’s cupholder that evening. Yet the survey also found that some parents in Western Australia and New South Wales are shelling out a whopping $40 per tooth!

What sort of message is little Timmy getting when he wakes up, looks at his bedside table and sees two crisp $20 notes sticking out of the glass?

For an entrepreneurial kid it says, “My little brother’s mouth is a goldmine! Where are Dad’s pliers?”

Or, more realistically, it tells Timmy, “I just got forty bucks for doing nothing”.

How Not to Raise a Spoilt Brat

No one wants to raise a spoilt brat, but plenty of otherwise well-meaning parents do.

And often the bratty behaviour begins with the best of intentions — giving out pocket money.

According to a recent study from comparison site Finder, the average parent is shelling out $483.60 per year in pocket money per child.

Yet here’s the kicker: the survey also found that, of the 3.3 million Aussie kids who receive pocket money, only a third have to do any chores to earn their cash!

Is it any wonder some kids grow up to be entitled little brats?

So, parents, here are my five pocket money tips for raising financially fit kids.

#1 Don’t Pay Your Kids For Basic Chores

Most kids get paid to do nothing. Bad.

And even if they do end up working for their pocket money, it’s usually for doing a few basic chores around the house.

The danger is that if you pay them for basic chores then you’re creating a pavlovian response that tells them that the only reason they should bother lifting a finger is if they’re being paid.

No, no, no!

You need to explain that everyone needs to pitch in and help out the family, for free.

Example: “Boy, have I got a deal for you! If you set the table each night, you get to … eat.”

#2 Give Them Responsibility

Understand that pocket money isn’t about the money — it’s a tool for financial education.

If you get it right, your kid will gain an appreciation of the value of a buck, a sense of accomplishment, and the self-confidence that comes from being able to earn their keep.

So, set them age-appropriate jobs: younger primary school kids can mow lawns, wash cars, crutch sheep. Older primary school kids should be able to cook the family dinner once a week: give them a budget, make them do the shopping, and have them explain over dinner how much it all cost.

#3 Pay Them Quickly

How much should you pay?

A good rule of thumb is $1 for each year of their age — so a five-year-old will get $5.

Now, and this is important, make sure you have a good supply of $1 and $2 coins on hand so you can pay your kids straight after they’ve finished a job. Don’t keep them waiting till the end of the week — what we’re trying to do is create the link between work and money.

#4 No Bank Accounts

For primary school kids, bank accounts totally suck.

The only reason student bank accounts are popular is that they’re a lucrative marketing tool for the big banks, who want to sign up kids as quickly (and as cheaply) as they can.

Yet kids learn by seeing — you want them to watch the dollars piling up as they work. Enter my infamous ‘Jam Jar’ approach: grab three empty jam jars and label them ‘Spend’, ‘Save’ and ‘Give’.

Divide the gold coins evenly each time they do some work. These are the building blocks of good financial behaviour: encourage them to spend wisely (their choice), encourage them to save up for something, and, finally, show them how much fun it is to give to other less lucky kids.

#5 No Fairies

A survey by Westpac found that 66 per cent of parents are worried about how financially savvy their kids will be by the time they finish high school.

With good reason. Despite my best endeavours, your kids are unlikely to be taught about money in school (and if they are it will be from Commbank, who have wonderful cartoon characters with such catchy names as ‘Cred’ (and, no, I’m not making that up).

The bottom line is this: there’s no magical fairy who’s going to teach your kids how to be good with money.

Raising financially fit kids — generous, hardworking kids — is your ultimate responsibility as a parent.

Tread Your Own Path!