Barefoot Investor: Teaching our kids about money is a class act

Kids spend roughly 2400 days in school, yet not one of those days is dedicated to learning the practical money skills they’ll be tested on every day of their lives. Now is the time to kick off the financial education revolution, writes the Barefoot Investor.

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 2400 days in school, yet not one of those days is 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 best-selling books.

It’s totally practical for the kids. It’s “plug and play” for 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 to: barefootmoneymovement.org.au

And if you know a passionate teacher, please share this column with them. This is a grassroots movement and I can’t do it without you.

Tread Your Own Path!

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

Q&As
DEBT RIDE ON THE CARDS

WENDY ASKS: 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.

BAREFOOT REPLIES: 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 per cent 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?)

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.

GENEROSITY WINS OUT

MELANIE WRITES: 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.

BAREFOOT REPLIES: 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 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.

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

DEPOSIT DEAL RISKS REGRET

CHRIS ASKS: 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 per cent deposit. You always say “if it sounds too good to be true, it probably is”. So what’s the catch?

BAREFOOT REPLIES: When I turned 18, my teetotal 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 per cent deposit instead of a 20 per cent deposit by covering their Lenders Mortgage Insurance (LMI) bill.

On a $400,000 home loan with a 5 per cent 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 Shorten was quick to say he’d do it too if elected).

It’s a bit like ScoMo (or Bill) is giving you a sleazy pick-up 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 per cent 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 per cent 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.

BOOK IN FOR MONEY LESSON

GLEN ASKS: I am a school chaplain. The other day, a few 16-year-old students were asking me about jobs they could make a lot of money from. I told them it was probably more important they learnt what to do with the money they did earn, and then recommended your book.

I was amazed when one of them turned up the next day with the book. It got me thinking — how do you think it best to bring your Barefoot principles into a classroom?

BAREFOOT REPLIES: Thanks Glen, I donated a copy of my book to every school library in the country, so I’m glad they’re being read!

As for getting these money principles into schools, I’d really encourage you, and anyone else reading this, to head over to barefootmoneymovement.org.au and apply for our pilot program!

If you have a burning money question, go to barefootinvestor.com and #askbarefoot.

The Barefoot Investor holds an Australian Financial Services Licence (302081). This is general advice only. It should not replace individual, independent, personal financial advice.

The Barefoot Investor for Families: The Only Kids’ Money Guide You’ll Ever Need (Harper Collins) RRP $29.95

Originally published as Barefoot Investor: Teaching our kids about money is a class act