The 4 cheapest home loans on the market in June

Why NAB Employees Read My Book

The other day I got this email from Trevor:

“Catching the city-bound Frankston train this morning, I had to chuckle at a NAB employee reading The Barefoot Investor. I wonder if it’s part of NAB’s mandatory training?”

What Trev is referring to is a script in my book that I call the “$22,064 phone call”, which gives you the exact words to say to get a cheaper rate from your bank.

Yet with 1.6 million copies sold, it’s now a well-worn script!

You can almost picture the bank’s call centre staff gnashing their teeth when they realise they’ve got a Barefooter on the line. They instantly know exactly what the customer wants … and how the call will end if they don’t get it.

Last week I spoke about getting rogered by your bank, as they sneakily cut their savings rates in the month before the Reserve Bank dropped its rates.

Well, on the other side of the bank’s ledger, things are getting cray cray, in a good way.

Example: NAB-backed UBank is offering a one-year fixed rate at 2.99%.

Smoking rate, right?

Sure, right now. But a year is a long time in Reserve Banking ‒ and this week they’ve indicated another cut (or two) is on the cards.

That’s why I recommend staying variable, and screwing down the cheapest rate you can.

So what are the best deals right now?

According to my fiercely independent research, the cheapest variable mortgage is Reduce Home Loans at 3.09% (or 3.19% with an offset account). Reduce Home Loans, by the way, is actually a white-labelled (rebadged) loan from the Bendigo Bank.

(Let’s spare a thought for Bendigo’s head of marketing, who just spat out his morning coffee at having this revealed in the paper.)

Other cheapies are financial tech outfits TicToc at 3.27%, Loans.com.au at 3.28%, and Athena at 3.34%.

These rates are generally only for eligible borrowers. (Think of it like striking up a conversation with a hottie at a bar. Unless you’re a good catch ‒ more than a 20% deposit or equity, a stable job and all your teeth ‒ they won’t even look at you.)

Still, home loan rates are at the lowest levels in history, and competition for borrowers is cutthroat.

Bottom line?

This is a once-in-a-lifetime opportunity to get the banker off your back.

So please do me a favour. Take out your phone. As in right now. Go on. Ask Siri to remind you to call your bank this week. Borrow my book from the library, and use my original well-worn script. Then, after you’re done, email me (scott@barefootinvestor.com) and tell me how much you saved.

Tread Your Own Path!

Reminder: I first wrote about this years ago and highlighted the low costs. Today there are better deals on offer. How do I know? Because my readers constantly email me about them! So before you do anything, do a quick google.

The Best Bank Accounts After the RBA’s Rate Cut

Interest rates are officially at their lowest level, ever. Which means things are grim for savers.

So today I’m going to make sure you are not getting rogered by your bank.

And there’s a lot of it going on:

For example, did you know that, according to comparison site Mozo, banks cut rates on 59 separate savings and term deposit accounts in the month before the latest RBA decision?

That explains why the Financial Review this week reported that 80% of savings accounts are actually losing money after the effects of inflation.

They’re like the Oliver Twist of finance! More? You want more interest? (Ask your parents.)

Okay, so let’s talk basic transaction accounts.

I like a ‘Mark Waugh’ (all-rounder) type of account, which is why I have steadfastly stuck with ING’s Orange Everyday: it has zero fees (including no international fees), makes it easy-peasy to maintain my buckets, and pays decent interest. (Although today ING dropped the maximum interest rate on the account to 2.55%, in line with the RBA’s rate cut last week.)

Yet I’m not paid to promote anyone, so what about the competition?

ME Bank is good, though their tech feels like it was built by the same team who made the Sputnik.

On the other hand, Up Bank (a division of Bendigo Bank) has great tech and offers competitive rates on all your buckets … but it’s still a work in progress as they roll out their feature set.

Now let’s talk Mojo (savings) accounts.

I use UBank’s USaver, which pays 2.87% ‒ although you have to keep contributing $200 a month to maintain that rate. Still, if you’re boosting your Mojo, that works.

And the competition?

Well, there’s a bunch of online savers that pay bonus interest bribes, but they all fizzle out after a few months and revert to lower ongoing rates. Then again, the best of them revert to rates between 1% and 1.8%, which is still better than the vast majority of accounts out there.

Finally, if you want to lock in your money, the best 12-month $100,000 term deposits are with Arab Bank and Teachers Mutual (both at 2.7%), though it’s a slippery-dip from there (say a prayer for the retirees!).

Fact is, cash is trash at the moment, and it’s only getting worse.

Roger that!

Tread Your Own Path!

Reminder: I first wrote about this years ago and highlighted the low fees. Today there are better bank accounts on offer. How do I know? Because my readers constantly email me about them! So before you do anything, google the best accounts on offer now.

Dollarmites Out!

Yay! You made it into the Yarraville West Primary School newsletter:

“After consideration, school Council has decided that Yarraville West PS will no longer host the CBA Dollarmites banking program. Financial literacy is important, perhaps now more than ever. There are independent educational initiatives available for your family to investigate together, such as the federal government’s MoneySmart or books, and Scott Pape’s Barefoot Investor for Families.”

Thanks for educating our educators!

Susan

Hi Susan,

Thanks for sending this through!

Just to clear things up, my new school program isn’t about me selling books (I’ve sold enough already, and anyway, I’ve donated a copy to every school library in the country).

This is a not-for-profit program, and it’s funded from my own pocket (no funding from banks!). That way, I’m free to explain to the kids how much of a rip-off credit cards are, why Nimble loans suck, and the hidden cost of UberEats.

Now, since I launched the Barefoot Money Movement a few weeks ago, I’ve had thousands of teachers apply to pilot the program later in the year, from schools across the country and around the world.

My biggest discovery?

We are truly blessed to have so many hardworking teachers educating our kids.

Seriously, they’re passionate about their students and are determined to ensure they learn these lessons.

It’s been a very humbling experience.

Thank-you for reading,Scott

Scott

You’re a Shocker, Barefoot (Part 2)

Scott,

Your article ‘Prisoner’s Last Chance’, about the prisoner coming into a six-figure sum of money, is the most disrespectful article I have ever read. You tell the guy “good on you for learning how to manage your money” and give him advice on how to invest, then gloat about how you donated your books to prisoners. How shallow are you?

What about telling him to clear his conscience and pay back the money he probably stole from victims, or compensate those he has offended against. Come on! I’m disgusted in you not telling him to give his six-figure sum to victims he most likely never had the mind to compensate.

I challenge you to say in one of your articles that you offered wrong advice on this matter and should have told the person in prison to compensate those he did wrong by. Bet you won’t.

Ricky

Hi Ricky,

I bet I won’t either, cobber!

It sounds like you (or someone you love) has been wronged by someone, and you’re still bitter and beat-up about it. Here’s how the prisoner described his situation:

“I have spent most of my life in institutions, from boys’ homes to jails (I’m 59). My goal is to have enough money to buy my own home before I die, with no debt and maybe some savings. After all, isn’t that every man’s dream?”

Now, here’s my thinking:

I don’t know what crimes he did … and neither do you.

Though I do know one thing: after doing their time, everyone deserves a chance to put their lives right.

And if he can achieve financial security, he’s more likely to stay straight and not end up back in the clink.

That’ll potentially save the taxpayer the $110,000 a year it costs to keep a prisoner locked up.

That’ll also help keep the community safe.

And it may just give this bloke some peace after a lifetime of pain.

Scott

You’re a Shocker, Barefoot

Mr Pape,

Your ‘shock/horror’ credit card piece in the Sunday Times was one of the most irresponsible financial articles I have read for some time. My wife and I (73 and 78 years old respectively) have been using credit cards for everything since they came into existence. Each month we only have one bill to pay, and it is paid on time every month ‒ very convenient! A more positive article would have explained the virtues of credit cards and how to use them wisely.

Wayne

Hi Wayne,

You don’t seem to understand how this column works.

It’s not my job to explain the virtues of credit cards and how to use them wisely!

(I’ll leave that to Commbank, who teach this to nine-year-old kids who attend their schools education program.)

Now, you gave me a backhander by saying I wrote “one of the most irresponsible financial articles” you’ve read for a long time. (I can imagine the bankers reading this would be giving you a golf clap: “Hear, hear! Finally someone gave it to Barefoot! You’re a jolly good sport, Wayne old boy!”)

Well, let’s talk about financial irresponsibility:

As you know, the banks do their best to lure people, especially young people, into taking up credit cards.

The reason is obvious: while interest rates have fallen to an all-time low, the average credit card interest rates haven’t budged from 18% since Alan Border donned the Baggy Green.

Yet at least the original Bankcard didn’t have a membership fee. Annual fees on today’s credit cards have been increasing by more than 20% per annum to an average of $135 a pop, according to Canstar.

At the same time, the value of credit card rewards points have been slashed. Last year a report by comparison site Mozo found that they were virtually worthless, plummeting a staggering 96% since 2016.

Look, I get that some people ‒ like you ‒ pay off their cards on the due date and get a 55-day interest-free loan.

However, the truth is that for most people ‒ particularly the young and the vulnerable ‒ they’re a debt trap.

Wayne, it’s these people who are subsidising your interest-free loan. So who’s being financially irresponsible, sport?

Scott

The Great Australian Finance Experiment

My five-year-old son is obsessed with maths.

The other night he worked out that the maths app game we play each night is charging us a recurring fee.

He was ropeable: “You need to delete this game off the iPad, or we’ll keep getting billed. Do you understand, Dad?”

I nodded.

Chip off the old block.

Anyway, it wouldn’t surprise me if he eventually studies finance at university.

And if he does, he’ll almost certainly (as part of his ‘financial history’ class) look back at this monetary madness we’re living through in 2019.

I picture him coming back to the farm, scratching his head:

“Dad, what the hell were you guys thinking?

“The housing market was slowly deflating after the mother of all housing booms … but then you started cutting interest rates to almost zero?

“And at the same time you loosened lending criteria and encouraged young people to buy a home with just a 5% deposit?

“How did you think it would end?!”

Okay, so I’m putting it on record that I don’t think any of this is a good idea.

Yet I’m clearly in the minority: this week the media predictably cheered that the average homeowner would be $58 a month better off with the latest rate cut.

They’re missing the point.

Having to cut rates to the lowest levels in history ‒ with the promise of even more to come ‒ is a sign that we’re in deep trouble.

Rate cuts are supposed to act like cocaine … yet after this many hits, their effectiveness is wearing off. (The Verve sang it best: “Now the drugs don’t work, they just make you worse.”)

Just like I can’t fathom my father paying 20% on his home loan in the early nineties, I’m sure my son will be baffled by our rock bottom rates today. Either way, this is a massive financial experiment that we’ve all signed up to … and the effect could be felt for generations.

Tread Your Own Path!

Netflix For Cars?

Hi Scott,

I homeschool my 11- and 13-year-old girls. This week, after reading your letter to Sally (the teacher with car loan issues), I decided to ditch my maths lesson for the day and teach your ‘car finance’ lesson. It was such an eye-opener for my girls and a truly great life lesson. They were gobsmacked by the repayment amounts! The lesson has inspired them to teach everyone else in our extended family about the consequences of buying a car with credit. Thank you for the work you do.

Sarah

Hi Sarah,

As the question above shows, cars are very seductive!

And that’s why I love the fact that you’re taking your daughters through this lesson.It is kind of frightening to add up all the costs of owning a car that is parked 95% of the time!

That’s why cars are going the way of Netflix ‒ being offered for a monthly subscription:

In the US last week Hertz launched a car subscription service: for ,000 a month you get a new car, full maintenance, roadside assistance and insurance (and there’s no ongoing commitment, so you can take it up in December, ditch it in January, and not have any of the ongoing costs).

And it’s not just car rental companies: Volvo launched a subscription service at $600 a month that went berserk, and Mercedes-Benz, BMW, Audi, Porsche are all planning something similar.

Will this be a good deal for drivers? Time will tell. Then again, if Uber has its way, no one will drive at all!

Scott

Should We Make the Sacrifice?

Hi Scott,

My husband and I are two months away from finally clearing nearly $100,000 of card debt we racked up some years ago. Now we are about to start a family and want to buy a new Mazda CX-5. We are thinking of doing this through salary sacrificing, which would cost us a fortnightly fee including all on-road costs. However, we are nervous about getting caught up in long-term debt again. Is salary sacrificing a safe option for getting a car?

Jess

Hi Jess,

Are you freaking crazy?

No, you should not borrow to buy a brand-new $40,000 car.

You’re like an alcoholic who celebrates their sobriety with a Jäger Bomb!

The only thing you should be salary sacrificing is superannuation (after you’ve saved up a deposit and bought your first home ‒ Barefoot Step 4). You have two months till you pay off all your debts. After that save up and buy the cheapest, safest second-hand car your ego can afford.

You’re doing great, don’t blow it!

Scott

My Socially Irresponsible Brother Marries his Masseuse?

Hi Scott,

My socially irresponsible 34-year-old brother has recently spent four weeks in Thailand and met an attractive masseuse who seems to have made him believe he is the man of her dreams. They spent the entire time together, and now that he is home in Australia we hear she is expecting their baby!

He is paying the mortgage down on his own property, has a secure job, and will soon receive a substantial inheritance from a relative (who would be mortified at this situation). I feel he is being scammed ‒ if there is a baby on the way, I think this is exactly what this lady intended. Yet he wants to believe all the lies he has been fed, and of course she now wishes to set up life here in Melbourne.

Most of our family agree he should send money to support this child and visit a few times a year. But I fear he will bring her over here, and I am not sure it will end well. What are your thoughts, and how can he protect his interests?

Danielle

Hi Danielle,

That’s a hell of a story … and a complicated question: how can your brother protect his interests?

Well, that presupposes that he actually wants his interests protected.

He’s a grown man. He’s in love. And he’s going to be a father for the first time. So I’m not sure how far you’ll get telling him that the mother of his unborn child is a scammer.

(Look, I have no tuk-tuk in the race: he may be getting scammed. It wouldn’t be the first time something like this has happened. Or she may turn out to be the love of his life. Who knows?)

If I were in your shoes, I would do three things:

First, let him know that he’s your brother and you’ll support him.

Second, encourage him to get DNA tests to ensure the baby is his (as legal counsel Kanye West says: “Eighteen years … eighteen years … and on her eighteenth birthday he found out it wasn’t his?”).

Third, encourage him to get proper legal advice: investigate having the inheritance diverted into a discretionary trust (of which he’s a beneficiary), set up a testamentary trust (estate planning), and, finally, if the relationship goes ahead, get a binding financial agreement (BFA) which sets out what happens in the event of a separation.Good luck.

Scott

Westpac Jackpot!

Dear Scott

I just wanted to say thank you! I received a letter from Westpac today to say that in response to my ‘query’ they have cancelled my credit card repayment insurance and refunded $1,100 in premiums paid over the past four years. Woohoo! One giant leap towards paying off and cancelling my card altogether!

Fiona

Hi Fiona,Ka-ching!

Since I wrote my column a few weeks ago, I’ve had heaps of Barefooters tell me they’ve got thousands of dollars back.

And if you, dear reader, have been sold junk add-on insurance, head over to demandarefund.com and stake your claim.

Scott

Prisoner’s Last Chance

Dear Mr Scott Pape,

My name is Peter. I am 59 and I have four years left to serve on a five-year prison term. As a prisoner I do not have access to a phone or the internet, so writing this letter is the only way I can get in contact with you.

I have spent most of my life in institutions, from boys’ homes to jails. I have only got a very low level of education ‒ I think I may have finished Grade 6 (am not sure). I need a lot of help with my reading and writing as well as my spelling. Yet recently I read your book and was able to understand most of it. Now I am hoping you could help me.

I have come into some money (just over six figures) which I want to invest while I am doing time, but I am having problems with my bank, NAB. They will not allow me to do electronic transfers from one bank to another while I am in jail. Yet I am afraid to close the account because if they send me a bank cheque it could go missing (that is not unusual for prisoner property).

I do not have any family or friends outside prison who can help me, either. I would love to invest at least $90,000 for the next four years before I get out of jail. My goal is to have enough money to buy my own home before I die, with no debt and maybe some savings. After all, isn’t that every man’s dream? Please help me and write back.

Peter

Hi Peter,

Good on you for learning about how to manage your money.

Having financial security is one factor that will help you stay on the straight and narrow when you get out (and I’ve donated many copies of my book to prisons across the country for this very reason).

Now, I spoke to NAB on your behalf, and they’ve suggested that you write a letter to NAB’s special service:

NAB Resolve
Reply Paid 2870
Melbourne, Victoria 8060

I’d suggest you transfer your money into a term deposit and time it to mature when you get out, and in the meantime spend the next four years mastering an employable skill.

Good luck!

Scott

Family Feud

Hi Scott,

I am 26 and recently got married (yay!), but my husband and I are not sure how to combine our finances. He owns a house with his brother, and I have a decent inheritance which I would not like to lose if we ended up divorcing (yes, I know it’s a bit early for that!). I thought of leaving the inheritance in the offset account, but if my husband dies I do not want to lose it to my brother-in-law either! How can we make it all work? Do we need a (post) prenup?

Ashley

Hi Ashley,

It sounds a little like you want a Meatloaf marriage: “I would do anything for love, but I won’t do that (share my inheritance).”

The way I see it, there are three things you can do:

First, you can go to a lawyer and draw up a ‘binding financial agreement’, which will set out who gets what if you want out of the marriage like a bat out of hell (another Meatloaf reference … ask your parents). The downside to binding financial agreements is that they can be expensive, and they’re often contested.

Second, a more practical approach could be for both of you to write single wills which state that your parents (or whoever) get your stuff in the event of your death. These wills can be updated as you go through life.

Third, if you want to avoid a lot of financial heartache in the future (and also avoid the costs associated with the first two options), I’d seriously consider talking about your feelings to someone qualified ‒ and that’s not me!

Fact is, you’re still in the honeymoon phase of your marriage (which, in my personal experience, lasts until the first kid pops out) yet you’re already choosing money over marriage.

That doesn’t make you a bad person, and it’s nothing to be ashamed of. It just means you have doubts.

And those doubts won’t go away.

Scott

Introducing … Zuckbucks?

Facebook is set to launch its own crypto-currency next year, the BBC reported this week.

(The article referred to the new currency as ‘GlobalCoin’ … though I much prefer ‘Zuckbucks’.)

So, will this be yet another crazy crypto coin?

Not a chance!

My bet is that ‘Zuckbucks’ will be as boring as your Aunt Betty’s status updates.

See, Facebook is already lame (but incredibly lucrative), so they’re doubling down on something even lamer (and equally lucrative): payments.

And that’s because Facebook’s end game is to become the WeChat of the West.

Hang on … what’s WeChat?

It’s the Chinese version of Facebook, Instagram, Twitter, YouTube, Google. All rolled into one ‘super app’.

However, WeChat’s big dumpling is mobile payments. In China you can order a meal, split the bill with your mates, pay your share, and take a photo of your dish to impress your friends ‒ all on WeChat.

This immersive experience throws off a lot of personal data, and that is what Facebook really wants. Oh, and so does Google. And Apple. And Amazon. And thousands of tech companies that you and I have never heard of (yet).

Now think about your current humble little bank account.

Yes, you’ve got an app on your phone … but it still looks and feels pretty much the same as it did 20 years ago, right?

It’s all still BSBs and account numbers, and plastic cards you carry around with long numbers printed on them.

Well, ‘big tech’ is coming for your wallet … and our banks know they have one almighty battle on their hands.

It really began a few years ago when Apple Pay arrived with the promise of ditching your silly plastic card, and allowing you to make payments with your iPhone (in return for Apple sharing a clip of the transaction).

“Bugger off!” said the big banks.

The only problem was their customers wanted Apple Pay.

And so, one by one, they’ve each folded like a cheap card table: first ANZ, then the CBA (who announced this week they’re spending $5 billion on updating their tech to fend off tech competitors), and this week NAB.

And that leaves Westpac, who are gallantly continuing to produce their own ‘Apple lite’ white trash wearables, which they call ‘Centsitive Objects’.

(Geddit?)

Yet my all-time favourite banking bling is the Bankwest payment ring. No jokes. It’s really a thing (and yours for just $39!)

Here’s how Bankwest describes it:

“Our award-winning payment ring is as easy as tap & go – just grab the things you need, fist-bump the terminal and you’re done.”

(Yes, they really said that.)

This week Morgan Stanley estimated that the rapid take-up of smart wallets (payments on your phone) could cost Aussie banks $22 billion in lost revenue as the tech titans move in.

Fist bump to that!

Tread Your Own Path!

Reminder: I first wrote about this years ago and highlighted the low costs. Today there are better deals on offer. How do I know? Because my readers constantly email me about them! So before you do anything, do a quick google.

The Barefoot Kid

Hi Scott,

I am so proud of our three-year-old! Scarlett saved up her pocket money from doing her ‘jobs’. We took her to our local tip shop and she selected a second-hand bike for $5 (see picture). She’s a Barefoot Kid!

Emilie

Hi Emilie,

That’s awesome! As a fellow parent of a three-year-old, I can attest that there’s something amazing that happens when they work hard, save up and buy their own stuff. I love hearing stories from families who’ve read the book. Now it's time to hit the schools as well.

Thank-you for reading, and sharing.

Scott

Car Crash Classroom

Hi Scott,

I am a 25-year-old teacher and I got a car loan in my second year of uni. I had no idea what interest rates were, or how getting a loan worked, and just signed away on the first deal I got accepted for (which ended up being a fixed rate loan with a 17% interest rate). I have now finished uni and am teaching, earning $63,000 p.a. I want to start saving towards my first house, but I have had the car for four years and still owe $8,000! How do I go about fixing this mess?

Sarah

Hi Sarah,

Honk your horn, because you just got totally rear-ended on that deal.

You signed up to a 17% p.a interest rate, fixed for the term of the loan?

Hopefully the term of the loan is five years, which would mean you’ll be free in 12 months’ time. (Though it’s worth checking your contract to see if you can repay early without penalty.)

Unfortunately, I have no magic wand for you. However, you can be the fairy godmother to your students, by making sure they don’t fall for the same trap you did.

So what I want you to do Sarah is to stand up in front of your class and tell your students just how ‘toot, toot, chugga, chugga-d’ you got when you bought a car.

Actually, don’t do that, they’ll use it against you.

Here’s how old Barefoot would teach it.

(It involves harnessing their hormones ‒ their desire to buy a car, travel, party, and get rich!)

Here goes:I’d channel my inner Oprah and start running between the desks and yelling at the kids:

“You get a car! You get a car! You get a car!”(Sorry … got a bit carried away there. Let’s get serious.)

Okay, students. Eyes front. Shoes off. Barefoot is here.

Step 1: Research a car you’d like to buy

Don’t censor yourself ‒ it can be any car you want (new or second hand).

Write down two things:

The cost of the car, which will involve some online research.

And why you chose this particular dream machine: Is it fast? Cute? Would it make you 10% more attractive?

(The class can then vote on the cars the students have chosen.)

Step 2: Decide how you’re going to pay for it

Let’s say you earn $30,000 a year once you leave school, which gives you $2,100 a month in your hand.

You can get a car loan with super-easy low monthly repayments. Why wouldn’t you?

Or you can save up and buy something for cash (though not as flash).

Step 3: App It Up

Download ‘Money Smart Cars’, a nifty car app from Moneysmart.gov.au which automatically calculates all the ongoing costs of owning a car.

Here’s an example:

Lucy buys an adorable 2016 Suzuki Swift for $13,000 and takes out a car loan at the car yard.

How much will this car cost Lucy over the next five years?

$20,000?

$30,000?

Go to the app and type in the details. After factoring in rego and insurance, interest and running costs (including $50 a week in petrol), the total cost of owning the Suzuki after five years is … a Swift $53,765!

(That’s Oprah money right there)

Scott

Here's One For The Teachers

I looked at my bedside clock: 4:03 am.

It was Monday night (actually, Tuesday morning), and I hadn’t slept a wink.

Earlier in the week I’d launched the Barefoot Money Movement ‒ my free, independent, money school program.

I’d made my case that this country needs a financial revolution, and that it needs to start with our kids.

I pressed ‘Send’ on my column … and waited.

(I made a pact with myself that I wouldn’t check the results for 48 hours … a classic ego defence mechanism.)

Would anyone sign up to pilot my money-education-minus-the-bank-mascots school program?

A few hours later I rolled out of bed and nervously checked the stats on barefootmoneymovement.org.au

It turns out people did sign up.

By the thousands.

Teachers from every nook and cranny of this country have joined the Money Movement to ensure that their students learn the life changing lessons most of us didn’t.

Fair dinkum!

There were teachers from Melbourne. From the Cocos Islands. From America. From the UK. From Uganda. From … Russia?

Anyway, I’m absolutely blown away by the response from teachers.

So everything’s ready to go for my new program, right?

Wrong.

There's just one little problem … I’ve spent the past week talking to passionate, hard-working Aussie teachers. And the one thing I’ve heard over and over again is that it’s incredibly hard to teach kids this core life skill if you’ve never learnt it or lived it yourself.

Teachers have one of society’s most important jobs, yet they don’t get paid what they’re worth.

So, here’s my promise:

Teacher Professional Development

Next year, I’ll deliver some free online professional development for those teachers who join the Barefootmoneymovement.org.au

And I’m taking this Money Movement to the top. I caught up with Education Minister, Dan Tehan during the week ‒ who I have been pitching this idea to for a while ‒ and told him that the seeds of our grassroots movement are starting to sprout. And he’s on side, commenting that “Scott Pape’s campaign to teach young Australians the importance of managing money is highly commendable”.

Finally, a big thank-you to all the teachers and principals who’ve already signed up to the Barefoot Money Movement. And if you know of a teacher who could benefit from this, please do me a personal favour and forward this on to them.

Tread Your Own Path!

Barefoot’s Money Movement

Do you want me to come to your school … and teach your kids about money?

Well, if you’re a teacher, a parent or a principal, this may be the most important column of mine you’ve ever read.

For years I’ve been saying this country needs a financial revolution ... and that it needs to start with our kids.

Kids spend roughly 2,400 days in school, yet not one of them is mandatorily dedicated to learning the practical money skills they’ll be tested on every day of their lives.

Most of us didn’t get taught this stuff either, and instead we learned our lessons the hard way. (And many of us are still learning ... given Australian families are shouldering some of the highest rates of household debt in the world.)

Our kids deserve better.

So let me tell you about my latest project, which I’m kicking off today:

‘Barefoot’s Money Movement’

My motto is: ‘Teach the Kids. Help the Parents. Change the Nation.’

And that’s exactly what I’m setting out to do.

I’ve created a brand-new school money education program for kids of all ages, based on my bestselling books.

It’s totally practical for the kids. It’s ‘plug and play’ for the teachers. And it’s mapped to the curriculum.

Oh, and it’s free, independent (no Dollarmites in sight), and totally not-for-profit.

Now my long-term goal is to roll the program out to every school in Australia. Yet to prove it works ‒ and to make it even better ‒ I’m going to pilot my classes in a small number of primary schools and high schools this year. This is a really big deal for me, and I’m going to work closely with each school I select.  

So if you’re a teacher, I really need your help.

To join the movement, go here:

barefootmoneymovement.org.au

And if you know a passionate teacher, please forward this email to them.

This is a grassroots movement, and I can’t do it without you.

Tread Your Own Path!

You Made Me Cry

You made me cry today. My 90-year-old mum had her purse stolen at the local shopping centre. When I told my seven-year-old, he immediately made her a card, put in all the money from his three jars, and gave it to his grandma. I am so proud of him. Thank you.

Melanie

Melanie,

What a great kid you have!

My biggest fear is that my kids will grow up to become entitled brats.

That’s why the ‘Money Movement’ program I’ve created for primary school kids is all about Jam Jars. The Jam Jars give the kids (and their parents) the behavioural building blocks that will shape the rest of their lives: to be hard workers, smart spenders, savvy savers, and generous givers.

The final lesson of the program has the kids brainstorming ideas of who they can help in their local community, and then donating the money in their class ‘Give’ jar.

A Cambridge University study found that adult money habits start to become fixed by age seven!

It makes sense when you think about it: as the Jesuits say, “Show me the boy at seven, and I’ll show you the man”.

Well done.

Scott

Would You Like a Credit Card With that?

Hi Scott,

My 19-year-old daughter just started a job at David Jones. To my horror, one of her KPIs is to sell the David Jones credit card to customers. In fact staff are incentivised $75 for every customer they sign up. There is a lot of pressure on her to meet this KPI, and we both feel very uncomfortable with this. I would be interested in your thoughts on this practice.

Wendy

Hi Wendy,

Would you like a credit card with that?!

Seems the beancounters at David Jones have worked out there’s potentially more money to be made flogging debt than designer duds:

The David Jones American Express Platinum Card has an interest rate of 20.74% on purchases, and a ‘competitive annual card fee of $295’.

(They seriously think that’s competitive? Who the hell are they competing with? Cash Converters?)

Anyway, this is exactly why I’m starting ‘Barefoot’s Money Movement’

Debt has been sold to us so relentlessly, so forcefully and so underhandedly that we’ve become desensitised to it.

Look, I’m not saying that DJs shouldn’t be allowed to sell debt, or that your daughter is wrong for following orders.

(That being said, if she feels uncomfortable about it, that’s a very, very good sign. Encourage her to trust her gut and her ethics. That’s a proud parent moment right there.)

What I am saying is that I’m sure as hell going to do everything I can to make sure kids coming out of school see the trap before they get upsold into the merry-go-round of misery. And in the next few weeks I’m back to my old school (in Ouyen, Victoria) to blend up some credit cards in the classroom!

True dinks!

Scott

First Home Loan Deposit Scheme

Hi Scott,

After years of saving up for a deposit and getting nowhere (I live in Sydney, and I work in hospo!), I was slightly stoked to hear about the new policy that helps first home buyers get a house with just a 5% deposit. You always say “if it sounds too good to be true, it probably is”. So what’s the catch?

Chris

Hi Chris,

When I turned 18, my teetotaling mother gave me possibly the wisest piece of advice I’ve ever received:“Nothing good happens after midnight.”

Too true, Joan. Too true.And way past midnight (in an election sense), ScoMo burped out the First Home Loan Deposit Scheme.

Here’s ... err … the guts of it:

The Government (read: taxpayer) will ‘help’ singles earning up to $125,000 (and couples earning up to $200,000) to buy a house with a 5% deposit, instead of a 20% deposit, by covering their Lenders Mortgage Insurance (LMI) bill.

On a $400,000 home loan with a 5% deposit, the LMI would cost a young couple $13,406, so it’s a huge saving.

Yet it’s also drunk policy ‒ and it has bipartisan support (Bill was quick to say he’d do it too if elected).

It’s a bit like ScoMo (or Bill) is giving you a sleazy pickup line ‒ one that sets you up for a one-night stand that leaves you with itchies and scratchies.

Look, there’s a reason banks require first home buyers, like you, to save up a 20% deposit. You’re entering into a 30-year contract, and they want to make sure you have staying power.

And if a bank that earns $10 billion a year in profits won’t lend to a first home buyer without them taking out expensive ‘default insurance’ ... why should the taxpayer foot the bill?

My view?

If you buy a home with a 5% deposit, you’re setting yourself up for a potential killer hangover … by buying a home you probably can’t afford.

Picture yourself waking up the next morning next to ScoMo (or Bill). He rolls over and whispers, “Was it as good for you as it was for me, baby?”

Don’t do it.

Scott