Dump the Dollarmites?

Question


Dear BFI,

My kid’s school is considering school banking, and someone suggested Dollarmites. I bit my tongue while screaming NOOOOOO inwardly. I want to attend the next meeting armed with my Barefoot ‘bible’ and strong arguments against Dollarmites, but I also need to supply an alternative. Someone else suggested school banking with Bendigo Bank, but what would you suggest? I want to educate our kids about finance, not set them up for financial ruin.

Melanie

Scott's Answer


Hi Melanie,

As Jenny from the Block would say, “You go, girl!”

If I was at your P&C committee, here’s how I’d lay out the argument.

First, let’s look at this from the school’s perspective.

The CBA has said that it pays the average school $400 a year in kickbacks. That’s a great deal for the bank (after all, bank tellers get bonuses for signing up accounts). Yet it’s a crummy deal for even the most cash-strapped school.

Second, let’s look at it from a parent’s perspective, who are the ones putting the money in.

The CBA Youthsaver account pays a pretty attractive 2.29% per annum (*).

* Welcome to banking! If you fail to make at least one deposit a month, or if you make even one withdrawal, you’ll get a not-so-attractive 0.01 per cent. And if you forget about the Dollarmite account after a few years (which many of you will do), you’ll actually end up losing money when you account for inflation.

Finally, let’s look at it from a kid’s perspective.

Financial education is a core life skill that every child will be tested on every day of their adult lives.

It’s far too important a subject to be left to a bank’s marketing department.

In fact, financial education isn’t about opening a bank account … or even much about money. It’s about teaching values. It’s about raising resilient, hardworking, responsible and generous kids.

So, Melanie, what would I suggest?

Hold off till next year.

Why?

Because I’m in the very, very early stages of writing my next book … which is all about teaching kids good old-fashioned money values and skills. And I’ll be taking it to schools — no kickbacks, no bank accounts and no dancing mascots.

Scott