Barefoot Investor Scott Pape explains how your teens can help you save money in this book extract
IN this extract from his new book The Barefoot Investor For Families, Scott Pape explains how your teenagers can help you save money and earn it for themselves.
Barefoot Investor
Don't miss out on the headlines from Barefoot Investor. Followed categories will be added to My News.
IN this edited extract from his new book The Barefoot Investor For Families, Scott Pape explains how your teenagers can help you save money, earn it for themselves and build their financial confidence.
MORE: Get in line for a super refund
MORE: Barefoot Investor’s money hack for kids
THE LAZY $100 CHALLENGE
IT’S very un-Australian to be smart with your money.
Aussies pay a staggering $11.6 billion in ‘lazy tax’ each year by not shopping around for better deals on household expenses, according to a 2016 study by the Queensland University of Technology.
In this chapter I’m going to help you save thousands of dollars a year without you having to lift a pinky. Even better, at the same time you’ll be teaching your teens lifelong lessons that will boost their confidence.
The guts of this chapter, and this Barefoot Ten challenge, is for your teen to … ‘save you at least $100 on your household bills by negotiating a better deal’.
Here’s how we’re going to do it. You’re going to be lazy each time you get any of the following bills:
• electricity
• gas
• phone and internet
• car and home insurance.
How? You’re simply going to hand it to your teen, and challenge them to negotiate you a better deal.
Step 1: Whet their appetite
The average household is paying thousands of dollars in ‘lazy tax’.
Which means nothing to your teen … until you give them a good reason to get interested: you’ll pay them a commission for every dollar they can save you!
You could decide to split the bounty down the middle — so if they can save you $500 a year on your power bill (the average saving if you switch, according to the Australian Energy Market Commission), they’ll earn $250.
Put that in terms that your teen can understand: they could earn more in half an hour of searching on Google than they could in a month of flipping burgers.
How’s that for motivation?
Step 2: Print out your bill
Circle your account number, the bill amount and the time period. Then write down how long you’ve been a loyal customer (guesstimate if you have to).
Step 3: Get them to do some quick research
Give the bill to your teen and have them do a quick search online to find a cheaper deal.
I’d start with your electricity bill, because there can be some good savings there.
Can you switch your electricity retailer? If not, you may still be able to save on your gas bill instead. But it’s not as straightforward as you’d think. So, when it comes to electricity research, direct your teen to the Government website Energy Made Easy (energymadeeasy.gov.au).
After punching in the basic details (gleaned from the bill), your teen will be presented with a list of offers — up to three at the same time. Once they’ve found a good offer, they can read and print an energy price fact sheet from the Energy Made Easy website summarising the key points.
Step 4: Celebrate!
When I did this switch a while ago myself, I saved $500 a year.
Your teenager may be able to save more, or perhaps less. Either way, it’s a good deal for you, and a total money spinner for them if you’re paying them a commission (up to half).
The purpose of this activity is to build your kid’s confidence. Feel free to humblebrag to your friends about how much money your ‘bill buster’ saved you on power (and make sure your teen’s within earshot when you do).
Finally, each time a bill comes in you should give your teen a chance to flex their negotiating muscles. In fact, if you’ve done it right they’ll be salivating at your mailbox, waiting for the next opportunity!
The Barefoot Investor For Families, by Scott Pape, is published by HarperCollins Australia and is in bookstores from today (Monday, September 24).
Why all that glitters is not gold
The price of gold may be on the rise but it’s not quite as shiny as it seems. When it comes to long-term gain, it pays to follow the golden rule — only invest in things that regularly put money back in your pocket, writes the Barefoot Investor.
Don’t get high on the short-term sugar hit
Despite the COVID crisis, money questions have been flooding in from readers about how to buy and trade stocks, or even gold. Maybe it’s down to raiding super, or the government stimulus, but the key to financial control is first to get out of debt, writes the Barefoot Investor.