Best-selling author, money guru, and dad of four Scott Pape (better known as the Barefoot Investor) says kids are more than capable of learning the value of work, saving, spending and even giving away their money.
And the good news for frustrated parents? He shows children aged 7-13 exactly how to do it themselves, in his new book, Barefoot Kids.
Also read: Barefoot Investor slams ING
Also read: What to do if you are in financial distress
Plenty of people might know Scott as the Barefoot Investor, the guy with the dog on the cover of THAT bestselling book, or perhaps the bloke that spurred them on to set up their finances exactly how he told them.
What you might not know is that Scott is also a farmer, a volunteer financial counsellor and a dad to four kids under the age of nine.
What becomes apparent by chatting to Pape is that he also walks his talk. Just like the tone of his famous books, he is warm, approachable and full of no-nonsense advice.
Doing a media blitz to launch his latest and already-record-breaking book, Pape said he was driven to write the book after speaking to Aussie adults who told him they wished they’d known more about money when they were at school.
“After people read the Barefoot Investor, the first thing they said was, 'why am I only learning this now? Why am I doing this now that I'm 30 or 40 or 50 or even 60?'," Pape said.
"So many people say, 'I wish I had learned to do this when I was in school'. So I figured I already had a platform to have a say about this."
Money skills are life skills so why aren’t they taught at school?
Pape said he decided to write the book and put it directly in the hands of kids after he tried and failed to get financial education into the Australian school curriculum.
Currently, there is no formal or independent financial literacy program in Australian schools. The financial literacy of Australian 15-year-olds in the OECD’s 2018 International Student Assessment (PISA) financial showed that it had fallen significantly since 2012.
Pape said he created what he called the money movement, aimed at getting more financial literacy taught to kids in Australian schools.
“It was not for profit and the aim was to get financial education in schools, and I failed miserably,” he said.
Pape said after "many, many" meetings with state education bureaucrats he just couldn’t get any interest in getting the program up and running from the people at the top. This was despite the support of teachers, parents and kids, who - he said - were crying out for more education about money.
As a result, Pape decided to put the information straight into the hands of kids themselves by writing Barefoot Kids - with the help of his own kids, who he calls “my grumpy editors”, and who helped him nail the tone and get rid of any terrible dad jokes.
Cashed-up or cash-free kids?
So, what are the secrets to getting kids to understand and be confident with money? As a parent of tween and teenage daughters who live in a world of tap and go and online transactions, trying to help them even understand money is tangible and can run out can just feel like another chore for me.
Pape was blunt. “I don’t think it really matters how you do it, but I really do like to use the dirty, filthy lucre [cash]. Kids are visual, especially younger kids, so they want to see that money piling up.”
He saud while it was inevitable cash would go the way of the horse and cart, visual methods of showing savings worked well - not just for kids but for plenty of grown-ups too.
Pocket money - for or against?
Pocket money has got to be one of the most contentious topics in families - yes or no? And if yes, how much? How often? And do they have to do anything in return?
Pape is pro pocket money but said it needed to be paid in return for the child putting in the work. While he said everyday chores shouldn’t count as paid work, he suggested the kids get to help choose what their particular job at home was to get them onboard without having to nag.
As for the kids that get paid pocket money for doing nothing at all? He said that was a no-go.
“Kids need to learn the value of earning a buck, and the connection between work and earning money. That’s so important yet I’ve met 30-year-olds that still don’t get it,” he said.
Money CAN mean getting what you want (even if it’s Pokemon cards)
Pape joked that the working title of Barefoot Kids was 'Get What You Want' but said, for kids, this was ultimately the aim.
He is also not a fan of being a tight arse.
“Sometimes parents say to me, 'Oh, you'd love our kid, he’s really tight with his money' but that’s not what I’m about. Spending money on what you want and enjoying it is part of it too. Even though my kids spend some of their money on Pokemon and it kills me.”
He said the perfect mix for kids was to encourage them to splurge a little (on things like the dreaded Pokemon), save a little for something they really wanted longer term, and to give a little money away to help someone else.
Not good at maths? No matter.
Many people said they were bad at money because they were bad at maths - something reinforced in the current school environment where the only finance subjects were part of the mathematics curriculum. Pape said money was actually a “language” rather than something made out of numbers or spreadsheets.
“In the Barefoot Investor and Barefoot Kids books, there's not a lot of numbers in there. Obviously we're talking about dollars and cents, but for me it’s more about explaining using the power of stories,” Pape said.
“In Barefoot Kids, there are 45 kids aged between five and 14 sharing their epic money adventures. There's Indigenous kids, kids from the city, kids from the country, girls, boys. I just wanted all the kids that read the book to think, 'That kid looks like me. I bet I could do that too'.”
As for the dreaded numbers in spreadsheets? “I don't personally do a spreadsheet, I've never been able to stick to one.”
The kids are all right
With rising interest rates and inflation, many families are feeling the pinch like never before. Pape said, while many parents might want to shield their children from it all, being honest and including children in age-appropriate conversations about what was happening was much better.
“Parents say, 'We don’t want to bother the kids, we don’t want to burden them', but if you don't tell them, they will fill in the blanks anyway.”
Pape said, in his role as a volunteer financial counsellor, he saw a lot of single-parent families in which the children really understood managing money because they were having money conversations every day.
“'We can’t afford this or we’re going to have to mend that'. Those families are having to make those tough money decisions all the time," he said.
“Ironically, for some wealthier families, those conversations aren’t happening at all so it’s easy for the kids to think that the money's always there, and they never really have to think about it."
Pape said, when the kids were the ones in the driver’s seat with their own money, not only did it build their confidence but it also removed what could feel like another job from busy parents.
"I think we can really underestimate kids, they are really resourceful and when they're enthusiastic and enjoying it, that's where the learning and that confidence comes," Pape said.
"If you can get the kids involved, interested and thinking about where they're gonna spend the money, what they're saving up for, then they can have fun with it, rather than you having to do all the hard work as the parent."