Make sure your munchkins become money-smart grown-ups.
Barefoot Investor helped adults sort out their finances. Scott Pape's new book The Barefoot Investor for Families: The only kids' money guide you'll ever need helps parents raise kids who understand how money works, and how to make the best of it.
Do we want our kids to be normal? Scott says normal (for an adult) is $4,200 in credit card debt, working a job we resent, to make payments on stuff we regret buying. Doesn't sound like a great future for a kid.
What if our kids' lives could be better than normal? Less debt, less resentment and less worthless stuff?
Everything from cooking their own food (a great money-saver) to opening their own savings account and promising to never get a credit card. Each one comes with a memorable experience that stick with them as they enter the world of adulting.
According to the book, researchers compared kids playing with 4 available toys to kids playing with 16 available toys. The kids with only 4 toys play for longer with each toy, had better focus and more creativity. That's what we want.
Apparently the average kid in Britain has 238 toys and plays with just 12. That's 226 wasted toys. Scott suggests putting most toys away in a cupboard and only having a few out at at time.
This experience, along with a game Scott describes, helps build kids' resistance to the brainwashing of advertising. This will help them enormously later in life, but also hopefully reduce the frequency of "Mummy, can you buy me a ____".
A little bit of research could save us hundreds each year. Sometimes you don't even have to switch companies. Just mentioning another company's offer can get you a significant discount with your current company. See some examples.
Half of us consider switching but only 25% ever do. One of Scott's list is to give you kid a go at doing the research. Maybe even split the savings with them.
Scott's preference is to "dial down the dollars" and spend more time with the kids. In other words, less fees, less time away from family and less work stress.
Smarter spending and investing wisely can obviously result in much more wealth. It can also give you freedom. You can choose a job you love rather be forced to choose the one that pays more. You can find yourself out of work for a while and still be OK. If you want to retire earlier than the government pension age you can do so. If you want to work part-time or have time off between jobs you can do that too.
Ultimately the smarter our kids are with money, the more freedom they'll have and the more meaningful their life can be.
The Barefoot Investor for Families looks like a great guide to help that happen.
PS. If you've are looking to sell items online (either as a lesson for kids or to cash in some unwanted possessions) you may want to grab a free copy of my ebook Less Clutter More Cash for tips.
Barefoot Investor helped adults sort out their finances. Scott Pape's new book The Barefoot Investor for Families: The only kids' money guide you'll ever need helps parents raise kids who understand how money works, and how to make the best of it.
Do we want our kids to be normal? Scott says normal (for an adult) is $4,200 in credit card debt, working a job we resent, to make payments on stuff we regret buying. Doesn't sound like a great future for a kid.
What if our kids' lives could be better than normal? Less debt, less resentment and less worthless stuff?
The Barefoot Ten
After some introductory pocket-money advice - a great simple method - Scott outlines the "Barefoot Ten". Ten things he reckons your kids should do before they move out of home.Everything from cooking their own food (a great money-saver) to opening their own savings account and promising to never get a credit card. Each one comes with a memorable experience that stick with them as they enter the world of adulting.
Kids and Toys
Kids might not appreciate the minimalism concept. Have you ever heard a kid complain of too many toys? Even so, less is still better for them.According to the book, researchers compared kids playing with 4 available toys to kids playing with 16 available toys. The kids with only 4 toys play for longer with each toy, had better focus and more creativity. That's what we want.
Apparently the average kid in Britain has 238 toys and plays with just 12. That's 226 wasted toys. Scott suggests putting most toys away in a cupboard and only having a few out at at time.
Second-hand teaches two lessons
One of the Barefoot Ten is to buy and sell something second hand. Seeing the price difference between new and pre-loved items teaches them two lessons. First, that buying something you don't really want can be a waste of money if you sell it for a fraction of what you paid. Second, if something doesn't have to be new, you can get a bargain if you buy second-hand.This experience, along with a game Scott describes, helps build kids' resistance to the brainwashing of advertising. This will help them enormously later in life, but also hopefully reduce the frequency of "Mummy, can you buy me a ____".
The Lazy Tax
It's a term for the extra amount we pay on bills - insurance, gas, phone, gym and energy - because we don't look for better options. Collectively Aussies pay $11.6 billion in "lazy tax" each year. Imagine how many hours we worked for that - just to waste it on overpriced bills.A little bit of research could save us hundreds each year. Sometimes you don't even have to switch companies. Just mentioning another company's offer can get you a significant discount with your current company. See some examples.
Half of us consider switching but only 25% ever do. One of Scott's list is to give you kid a go at doing the research. Maybe even split the savings with them.
Private School
The biggest predictor of a child's happiness and success is the time parents spend with them, not the school they go to. Yet many parents take on extra work to pay the school fees. A quarter of parents borrow money for school fees and 1 in 7 rack up a credit card debt.Scott's preference is to "dial down the dollars" and spend more time with the kids. In other words, less fees, less time away from family and less work stress.
Other people are important too
A book on personal finance runs the risk of becoming to self-focused. Scott's pocket money advice includes putting some aside for giving. He also has a whole chapter on showing your kid how to contribute to the community.Why I'm talking finance
Money is the key to living a simpler more meaningful life. Working part-time I've had so many people say they wish they could do the same but can't afford it.Smarter spending and investing wisely can obviously result in much more wealth. It can also give you freedom. You can choose a job you love rather be forced to choose the one that pays more. You can find yourself out of work for a while and still be OK. If you want to retire earlier than the government pension age you can do so. If you want to work part-time or have time off between jobs you can do that too.
Ultimately the smarter our kids are with money, the more freedom they'll have and the more meaningful their life can be.
The Barefoot Investor for Families looks like a great guide to help that happen.
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