by Scott Pape
DESSERT:
Have a cake to celebrate.
And . . . everyone does the dishes together.
Money Meal parents’ script
Your kids are going to have some questions, and I want your first Family Money Meal to go smoothly. So here are some scripts you can use.
What are we doing?
From now on, each Sunday night we’re going to sit down and have a family meal. We’re going to call it a Money Meal, because that’s when you get PAID!
Are we doing this every week?
Yes we are. It’s our new family tradition . . . and I assume you want to be paid every week?
Why are you making me help out with dinner?
Because from now on, that’s what our family does for the weekly Money Meal—we all help each other out. You can set the table, help cook, clear the table at the end, or do the dishes. Everyone pitches in.
Do I have to help out with dinner every night of the week, or only for the Money Meal?
(I’ll leave that one up to you.)
Not having my phone sucks.
Yes it does. But it’ll be over soon—and you’ll be richer.
What jobs do I have to do to earn my pocket money?
You only have to do three jobs a week. It’s up to you to choose which jobs you want to do (subject to parental final approval). You can change them each week, or month, as you choose.
When do I have to do them?
If you want to get paid, your jobs need to be done before you sit down each week for the Money Meal.
How much will I get paid?
Because you’re six you’ll get paid $6 a week. For each job you miss, you’ll be paid $2 less. And if you do no jobs, you’ll get paid nothing. (Or whatever amount you as parents decide, obviously.)
Can I do extra jobs and get paid more?
(I’ll leave that up to you.)
What if I’m sick and can’t do one or more of my jobs?
Well, you only get paid for doing the jobs, so you’ll get paid less that week. But you can do extra next week to make it up.
When will I get paid?
You’ll get paid at the end of our Money Meal. Mum or Dad will check the Scoreboard on the fridge and make sure you’ve marked off your jobs, then pay you. We’ll start next week.
What are the three jars for?
To divide up your pocket money. Splurge is for day-to-day stuff. Smile is for saving up for things that take a little longer to pay for—that make you smile when you think of them. Give is money you use for helping people. The only rule is that you have to put some money into each jar each week, but how you divide it is up to you.
Do I have to use jam jars?
All pocket money we’re paying you has to go into your jam jars. But for older kids you’ll also get a wallet or purse for the money when you want to go out and spend it. Next week we’ll be setting up a bank account, too.
What can I spend my money on?
Splurge money is up to you. Smile money is your way of saving up for something you really want—and you’ll track it on the Barefoot Scoreboard. Give money will be a family project.
You rock!
We’ve covered a lot of ground.
Seriously, you should be proud of yourself.
Most parents mean well. They start out paying pocket money . . . but it always seems to . . . fizzle out.
Not you, not this time.
You now know which jobs they should do for pocket money, and which should be free.
You know how much to pay, and when. And you’ll do it in just three minutes a week.
Now we’re getting serious.
In Part II, we’re going to nail some big life lessons for your kids:
•They’re going to learn the value of a buck, so they don’t end up spoilt, entitled brats.
•They’re going to learn about the dangers of credit cards, and build up their confidence.
•They’re going to develop the understanding that ‘in our family, we’re good with money’.
You’ve taken your First Steps, and life will never be the same.
Now it’s time to pick up the pace . . . with the Barefoot Ten.
This is where the real fun starts!
‘The best thing is that it feels like we’re coming back together as a family’
The Mainas, Lismore, NSW
I honestly didn’t expect Money Meals would work for our kids.
Nobody ever taught me about money, so I was worried about how I would be able to teach our kids. And with four kids, including one on the autism spectrum, it can be hard to get everyone together for a meal.
In the past, we’ve tried to do chores but it was hard to get all the kids on board, or to get them to stick to it. We had too many jobs to cover for the week and I would end up having to do it all myself and not pay the kids. In the end, I was so frustrated, I just gave up.
But with this plan they have been proactive and self-motivated. And better yet, no more nagging!
‘Three jars, three jobs, three minutes’ has been a game changer. I love how simple it is and that the kids have control over it. They choose what their dinner duty is, what jobs they will do, and what they’re saving up for.
At first, our youngest was resistant to the idea of having to work for money at all—but when I explained the scoreboard and the jars, he understood he would have control over his own money. He is now self-motivated to do his jobs and very focused on his savings goal: spending money for a school excursion to Canberra.
Our eldest child has Asperger’s. He doesn’t like talking about money and was initially reluctant to do Money Meals because he was worried it would change his routine. But we have already noticed he is doing his dinner duties without being asked, which is amazing.
We call the Money Meals ‘Pay Parties’ because doing it on a Sunday afternoon works best for our family. They do their jobs, we have yummy snacks and play card games together.
The best thing is that it feels like we’re coming back together as a family. To see that fills my heart with joy.
PART II
The Barefoot Ten
With your First Steps in place, you’ve already laid the groundwork for raising financially secure, hard-working kids.
Heck, you could close the book right now and be further ahead than most parents will ever get.
But now it’s time to have some fun.
Over 10 extra-special Barefoot Money Meals, you’re going to create a handful of magic moments that will equip your kids with the specific money skills you probably wish you had when you left home.
By the time we’re done, I can promise you’ll never have to worry about your kids’ financial future again.
What’s more, in this part I’m going to:
•show you the exact bank accounts to set up for your kids
•teach you how to play Flogglebox, the fun game that’ll immunise your kids against TV marketing—for life
•reveal how you can ‘break the brat’ in even the most materialistic kids in one evening
•show you why your kids need a bit of plastic surgery . . . and how you can teach them a lesson they’ll never forget about credit
•lay out my simple three-step system for getting your teen into their first job—even if they have zero experience—and get a glowing job reference.
Plus I’m going to show you how to set up your Barefoot Ladder—my strategy for saving for your kids’ house deposits that’s guaranteed to not turn them into entitled trust-fund kids.
Yet most importantly, you’re going to have the time of your life doing all this with your kids . . . the memories you create along the way will stick with you, and your kids, forever.
Let’s begin.
How to Protect Your Kids from Bank Robbers
In a skyscraper high above the clouds, there’s a bank boardroom.
And in that boardroom is my previous book. And the bank’s marketing executives throw darts at it. Or they draw glasses on me,
and call me horrible names like the ‘Bare-arsed Investor’.
Or at least that’s what I imagine they might do.
It’s fair to say that over the years I’ve given a lot of stick to the banks. My last book empowered a lot of people to break up with them, and move over to better—zero-fee!—banking.
And that’s exactly what we’re going to do now. I’m going to show you how I protect my kids from bank robbers, by telling you the exact bank accounts that I use for my kids.
This chapter crosses off our very first Barefoot Ten challenge, ‘open a zero-fee, high-interest savings account’, and by the end of this chapter, that’s exactly what they will have achieved.
Your kids will get a jolt of confidence at having made a smart decision to open an awesome account that will save them thousands of dollars in bank fees. They’ll be on the right track. Right from the start.
Even better, I’ll give you the teen version of my Serviette Strategy that lays out a straightforward money plan that is so simple your teen will just ‘get it’.
And I’ve left the best till last . . . at the end of this chapter your kids are going to have their very first PAYDAY!
Let’s do this!
Chop chop
My wife says that I suffer ‘anxiety’ about the Commonwealth Bank Dollarmites School Banking Program.
Once we were out for dinner with a couple who told me that they were actually very happy with Dollarmites.
‘At least someone’s teaching our kids about money,’ the husband said.
And then I slammed my fists on the table, jumped to my feet, pierced my chopsticks into my rice, leant over and got right up in their grills, and with smelly black-bean beef breath, I yelled:
‘DON’T YOU TWO SEE THAT YOU’VE SIGNED THEM INTO A MANIPULATIVE CREDIT CARD MARKETING DATABASE?’
And if I’d actually tried to do that, my wife would have leaned over and stabbed me with her chopsticks.
So I just calmly kept on eating my beef and black bean stir-fry.
Letting it all wash over me.
And then, after a few deep breaths, I politely repeated the facts to our lovely dinner companions:
The 2018 Banking Royal Commission showed that Australia’s biggest bank isn’t to be trusted.
Their financial advisors have ripped off retirees for millions of dollars with fraudulent advice —they even ripped off dead customers, charging advice fees for no service.
Oh and their branch staff were caught out scamming school kids’ Dollarmites accounts!
BANKING ROYAL COMMISSION
Dollarmites bites: the scandal behind the Commonwealth Bank’s junior savings program
Source: The Sydney Morning Herald, 18 May 2018
You’ve got to hand it to CommBank, their fraud has a kind of . . . circle of life to it, right?
Yet the couple’s argument was ‘at least someone’s teaching our kids about money’.
So let’s see what CommBank is actually teaching our kids.
Their ‘Start Smart’ lessons are often compulsory in 2000 schools across the country. The program includes teaching Grade 3s (eight-year-olds) about credit cards . . . which dovetails nicely with the Dollarmites mascot ‘Cred’, who’s sent into school assemblies and is described as ‘a cool dude’.
The Dollarmites school banking program is easily the most successful marketing campaign in Australian history. In fact, one analyst has suggested Dollarmites was worth an astounding $10 billion to the bank.
So you can totally understand why the other banks are as jealous as hell.
In fact, Westpac sniffed an opportunity and tried to get the generational jump on the CBA—by focusing on the foetus, with their ‘Bump’ account.
(I promise you I am not making this up.)
It’s rumoured that ANZ will soon launch a ‘Sperm Account’ that targets responsible tadpoles who don’t want to be caught without ATM access during the fertility process.
(Okay, so I made that one up.)
Seriously though, the goal of these businesses is to make our money their money . . . not teach financial education!
I’ve built a career on giving fiercely independent advice and I’m going to give you the skinny on everything you need to know about kids and bank accounts.
No fear, no favour and no bank-branded merchandise.
Let’s get started.
The best savings account for your kid’s cash
I think every kid should have their own savings account.
Hang on, didn’t I just get you to set up jam jars?
Yes, I did.
Let me be clear: kids don’t really need a transaction account for their own use.
However, they will need you to set up an online saver account where you can store their birthday money from grandparents and the like—and perhaps bank some pocket money savings when they fill their jars.
Here’s you: So, which bank account should I open?
Here’s me: Avoid anything that’s marketed as a kids’ saver account and you’ll generally be okay.
Like Commbank’s Youthsaver, which is just horrible. (Friends don’t let friends do Dollarmites.)
So what savings account do I suggest you set up for your kids under the age of fifteen?
The easy way
It’s quick. It’s dirty. And you can do it while eating a taco:
Just open another online saver that’s linked to your existing bank account.
Nickname the account (e.g. Davin’s Savings Account).
(Fun fact: I was all set to be called Davin—apparently in homage to my mother’s favourite glam rocker heartthrob at the time. That was until my father came home one day and said, ‘Let’s just call him Scott.’ THANK GOD!)
Bonus: doing this with your existing bank means you won’t stuff around opening an account at a different bank.
Extra bonus: you’ll get a higher rate of interest than the majority of those kiddy accounts, and there are no restrictions on withdrawals or amounts.
At the time of writing, the zero-fee, high-interest-earning everyday bank account that I personally use is the ING Orange Everyday account, with a linked Savings Maximiser account. However, you should also have a look at ME Bank and UBank which both have similar offers.
(And, for the record, I have never, ever received a cent for recommending any product. Nothing. Never. Ever.)
That’s my best tip.
However, if you’ve already got an existing bank account for your kids and can’t be arsed changing it, that’s totally okay too.
Whatever gets you through the day without snorting Froot Loops.
Either way, now that you have ‘Davin’s Savings Account’ in place, you’ll have a place to park your kid’s birthday bucks. And as long as they have three jam jars for their pocket money, that savings account is the only bank account they’ll need . . . until they turn 15.
And that’s a nice introduction to teen banking.
Bank accounts for teens
Ah, the birds and the bees . . . and bank fees.
I’ll leave the awkward sexting discussion to you, but I can totally help with guiding your teenager through the murky world of banking.
As we discussed in Part I: First Steps, in the first few years of high school your kid is going to be doing more advanced jobs around the home (even setting up their own business to work for neighbours washing cars and mowing lawns).
Then when they are old enough to get a part-time job (14 or 15, depending on your state), you cut their pocket money and give them a gentle, caring kick up the backside to encourage them to start flipping burgers . . . and open their own bank accounts.
But what accounts should your teen have?
Enter the Serviette Strategy . . . for teens.
If you haven’t read my last book, you’re probably wondering what the hell I’m on about.
Well, the Serviette Strategy is one of the simplest ways to manage your money.
In fact, my entire money management plan
consists of dividing our income into three ‘buckets’:
•a Blow Bucket, for daily expenses, the occasional splurge and some extra cash to fight financial fires
•a Mojo Bucket, to provide some ‘safety money’, and
•a Grow Bucket, to build long-term wealth and total security (e.g. investments and super).
It’s kinda basic, right?
That’s why it works.
And that’s exactly what we’re going to do for your teen, right now.
Look, if you can’t explain how you manage your money in 30 seconds, you’re not going to stick with it—and good luck trying to get your teen on board.
In fact, we’re going to make this plan even simpler for your teen.
See, your teen doesn’t really have ‘Daily Expenses’ like a mortgage or power bills. Nor do they have any real financial fires to put out.
And the only long-term wealth they really need to worry about is their super (which I’ll dedicate the whole of Chapter 9 to sorting out), so we don’t need to bother with a Grow bucket here either.
That means that the Serviette Strategy for teens breaks down into just three bank accounts.
It looks a little something like this …
Teen serviette
The Splurge account
This is a zero-fee everyday transaction account, and it’s for everyday teen splurging. Think phone credit, clothes, online shopping (for God’s sake take your card off their iTunes account) and giving (which I’ll have a lot more to say about in a couple of chapters). Yet as you’ll explain to your teen, ‘Splurge’ is the only bucket most people have—which is why most people are broke.
That’s why they are going to open . . .
The Smile account
This is another high-interest online savings account, linked to their everyday Splurge account. The aim of this account is to get them excited about saving . . . by harnessing their hormones.
What is it that makes teens smile?