…and give you our top twelve takeaways.
It seems like just yesterday that our kids were tiny. In a blink of an eye, they are growing independent and don’t need us as much as before.
As scary as it is to think about, time will pass just as quickly. They’ll be moving out of home and going off into the world, without us there to hold their hand every step of the way. As parents, we can only hope that we use this time wisely and teach them everything they’ll need to know before going out into the big wide world. One of the most important lessons, and one of the hardest to teach, is for kids to know about managing their money.
How to make it, save it, spend it wisely, and not blow it all, are all things that most of us as adults’ struggle with every day – how on earth can we teach our kids about money?
But my kids won’t sit and listen to me talk about money…
Enter – The Barefoot Investor for Families. This follow up book to the best-selling book by Scott Pape is just as impressive as the first. Full of dad jokes, relatable stories of growing up in 1980’s Australia, Pape brings money management into your kitchen table and makes it fun.
One of the keys to the Barefoot Investor methodology is “Date Nights” – where you and your partner have a nice meal together and talk money. In this edition for families, he uses the same concept, but provides 10 essential money lessons for kids that you can work on over your family date nights.
Many of the lessons are modelled on the original book, with adaptations for age appropriate activities. Pape shows an understanding of the child’s mind – what will motivate and excite them to try new things and be learning money concepts through play and games without even realising they’re learning lifelong lessons. Being a busy parent himself, he also recognizes that formal money lessons are going to be low priority for most parents most weeks, so he promises you can do the basics of money management each week in less than three minutes.
Here are my top 12 takeaways from the book
1. Money management starts from the top – You can’t expect your kids to be good at managing their money if you’re not. Although it’s scary and time consuming at first, having confidence in your own abilities will flow on to your kids.
2. On the same note – (and this is a hard one to face!) – Even as adults we’re not immune to the FOMO (fear of missing out) YOLO (you only live once) and instant gratification of online shopping and next day delivery.
If you see your kids being spoilt brats about getting things they want, have a look at your own behaviour. Do you need instant gratification and buy whatever you want as soon as you see it? Have you ever gotten grumpy if your partner says you can’t have something, or that you can’t afford it? We’ve become used to getting what we want straight away, and then get upset when our kids ask the same from us.
An excerpt from The Barefoot Investor for Families by Scott Pape
3. It’s really never too late. Even if your kids are leaving home next year, even if you only do one thing a month, even if… you can still make a difference in their future money management skills today. The Barefoot Investor for Families suggests that three minutes a week is all you need to start with having the money conversations, and then a weekly family money night, where you discuss each of the ten key lessons in the book (actually doing the lessons takes some time, but this is setting up the basics).
4. Giving back and connecting to the community makes you a better money manager. It’s so easy in our busy, financially stressed lives to forget that there are others worse off than us. Practicing gratitude and giving makes you appreciate what you have so much more.
5. No one is born being bad at managing money. You have learnt your money lessons from your family, and it’s not too late for you to change your money story and your kids’ money story.
6. Start saving today. Every dollar adds up, every conscious choice you make to manage your money better makes you a better money manager.
7. Ditch the credit cards. The Barefoot Investor for Families advises never, ever letting your kids have a credit card. You’ve probably got at least one or two yourself, and depending on the time of year, probably some debt owing on them. Ditching the cards might be the hardest for me to do, as we’ve been pushed for so long to keep them as a backup and use them as an offset to the mortgage. Which is fine when they are under control, but when I see the expenses creeping up, I know I need to act and cut back on these.
8. Take charge of your expenses – Again, The Barefoot Investor has some great ideas to involve the kids – from making your little ones into “lights monitors” to getting tweens to play the petrol price game as you drive around town, and getting teens to do price comparisons on your bills. Recognising that many of us pay the price of loyalty and laziness in shopping around for a better deal on our bills, Pape suggests we hand over the job to our teens. Offering to split the first months savings should be incentive enough to get them googling like mad for a better deal. This is a great math lessons for kids, as well as a money lesson.
9. Make your older kids get a job. Seriously. If they don’t do a proper day of paid work (or even volunteer work) before they finish their education – they are missing out on so many vital lessons. Working for other people will teach them team work, punctuality, grooming, the value of hard work and communication skills. Not to mention they will learn how to value their money so much more when they are the ones working hard for it.
10. Of course, no money guide would be complete without touching on kids earning and managing their own money. Pape’s methods are simple (and we’ve got a blog coming soon that will outline the best tips for each age group). Here’s some of the golden rules:
- Pocket money should be earned, and should be for jobs over and above usual household maintenance tasks
- Money earned should be split equally between spending, saving and giving (like the buckets concept in the original book)
- As children reach their teenage years, they should get a part time job and pocket money from parents stops.
11. If you’re not already following the Barefoot Investor methods, you’ll get just as much out of this book as your kids. And when you make the changes suggested (like switching your super fund to a high-interest, low fee account) – talk to your kids about what you are doing and why. Let them in on the money conversations (they don’t need to know all the ins and outs, but the basics of what and why), so they can see how you make decisions about money and that money management is a lifelong process. And it really is never too late to turn things around. From everything from getting a better deal on your phone plan, costing out eating in vs take-away, saving for a holiday, making a budget and reviewing it regularly – these are lessons that will help set your kids up for success with money. As Pape says, “You can continue living in the past, beating yourself up about the money mistakes you made when you were younger, telling yourself you’ve left it too late…or you can rise up and make yourself proud.”
12. This is the one that Pape finishes off with in his book, and I’m doing the same, because it’s important. Sort your own affairs out. It’s not nice to imagine the worst happening to any of us, but reality is, we all die someday. And how we leave our kids and partner prepared can make all the difference to how they cope. The book goes into more detail about how to prepare and includes this checklist as a starting point for what you need to include.
It really isn’t ever too late
And there is probably not much else that ranks as highly in the things we’d like to teach our kids about than money. I’d highly recommend adding this book to your Christmas wish list – and get a copy for all your friends too (the original Barefoot Investor is also a great read if they don’t have kids).
Have you read the Barefoot Investor for Families?
What were your takeaways? Did you try any of the lessons with your kids? We’d love to know what you thought – share with us on our Facebook page, Instagram, or comment below.
Want to buy a copy? We got ours from Big W (if you are in Australia and have one close by) but if not, grab a copy from The Book Depository – it’s my usual go-to – I love the free worldwide shipping and discounts with Book Depository!
If you enjoyed reading this, you might also like our article on Money lessons for your tween.
This post may contain affiliate links. See box on side of blog for more info.