by Scott Pape
Besides, credit card rewards systems are, like, so 2009. It’s no secret that the banks have been playing hokey-pokey with the value of rewards points for years—but right now it’s just getting ridiculous.
Case in point: over the past 12 months, the banks have been secretly shutting down, or radically reducing, the value of their rewards systems. According to financial comparison site Mozo, the banks have yanked the value of their rewards points, on average, by a staggering 96 per cent since 2016.
The value of the points—not to mention the restrictions on redeeming them—is a joke.
So, as an alternative I’m going to give you the ultimate rewards program, one that’s available to you right now.
You don’t have to bother playing the rewards point shuffle. You don’t have to worry about innocently missing a repayment and being slugged with back interest for the month. You don’t get hit with a hefty annual fee.
So what is this platinum-titanium rewards program?
It’s you modelling good habits for your kids.
They’ll grow up knowing Mum and Dad don’t do credit cards.
They’ll grow up watching their parents pay their own way, with THEIR OWN MONEY.
They’ll grow up knowing that their parents are powerful money managers.
You’ll make them see that not having a credit card is a reverse status symbol: you’re so smart you don’t need one.
‘In our family, we earn interest, we don’t pay it.’
Now that is the ultimate reward.
Everything you wanted to know about credit cards in one and a bit pages
Hang on, how can I blend my credit card? I don’t have one!
Well, I’m not going to tell you to lie to your kids, but I did. I used an old Qantas Frequent Flyer card, and the kids had no idea. And I know that because when Gran came over, they grabbed her wallet out of her bag and headed to the blender. When you’re three, Gran’s credit card looks awfully similar to her driver’s licence.
‘NOOOOO!’ says Gran.
‘Gran, credit cards are bad, they cost you too much money,’ says my oldest.
(The moral of the story is that your kids take things in, and they’re very literal.) Proceed with caution. You might not want to blend the card: instead you could cut it up, and stick it to the fridge door as a trophy and reminder that in your family you don’t do credit cards.
What if I’m really struggling with my credit card debt and I don’t want to worry my kids?
I totally get why you wouldn’t want to show your kids, and of course it’s up to you. However, what I will say is that there is incredible power in vulnerability. Okay, so that sounds like something Oprah would say, but stick with me here.
What I mean is that you’re being honest with your kids; you’re not trying to sugarcoat your situation and act all ‘do as I say, not as I do’. Instead you’re saying: ‘I’ve messed up but I have the power to change things, and I will . . . starting right now as I blend these buggers!’
But doesn’t my kid need to build up their credit so they can get a home loan at some stage?
No. A credit card won’t help you get a home loan, any more than a flash pair of runners will help you win a marathon. What matters is a history of savings, no personal debts and a decent-paying job.
What about personal loans, are they any different from a credit card?
They’re the Khloé Kardashian of debt: they don’t get as much publicity as their sister, but they’re just as dumb.
How am I supposed to buy things online without a credit card?
Get a debit card—they do basically the same thing, but with your money.
BAREFOOT MONEY MEAL
WILL IT BLEND?
Put the blender in the centre of the table (or substitute some scissors). Say nothing . . . let the anticipation build.
ENTRÉE:
Take out your credit card statement, and explain to your kids how credit works—whether it’s credit cards, payday loans or store credit. (See page for a dummy statement.)
MAIN COURSE:
Grab your credit card (or statement) and tell your kids:
‘In our family, from this day on, we don’t do credit cards. Never, ever again.’
And then blend that sucker up right at the dinner table. (If you don’t have a blender, use scissors, but be vigorous in your cutting—then create a credit card collage by sticking the pieces to the fridge as a trophy.)
As your kids watch the cards disintegrate before their very eyes, say: ‘In our family, we save up—and we pay for things with cash!’
DESSERT:
Play the Family Legends game:
Do you know . . .
•how we got into debt in the first place?
•why we choose not to use credit cards anymore in our family?
•what we do in our family to avoid paying for things with credit?
Then, do payday (three minutes is all it takes!).
Everyone pitches in and does the dishes.
Blend it, baby!
I guarantee you, 30 years from now your kids will still remember the night their parents blended their credit card.
What you’ve done with your ‘credit smoothie’ is kind of like aversion therapy. Better yet, you can keep the credit card dust from the blender to throw in their eyes if they ever come home with a credit card.
Okay, so clean the blender, because your next Money Meal is going to be MEGA.
Seriously, I’ve been working on this chapter—undercover!—for months.
‘They LOVED blending my card . . . it’s a moment that will stay with them for life’
Fiona Manley and Steve Pratt, Adelaide, SA
My children watched me lose everything through the GFC. We went from being quite wealthy to barely avoiding bankruptcy.
Through that time we relied heavily on credit, and over time I lost sight of the cost of credit card interest. At one point our debt got up to $44 000.
Since becoming Barefoot we’ve smashed through most of it—though when I read we had to ‘blend my card’ I still had a momentary heart attack! But by the time we got to the Money Meal I had decided that I didn’t need it. My biggest worry was wondering whether it would harm my blender (it didn’t).
We showed the girls our credit card statements, and they were shocked at the interest and the impact it makes on getting the card paid off. I told them that if we weren’t paying off credit we could pay our home loan off in less than seven years. The looks on their faces were priceless!
I think they really appreciated that we were showing them ‘private’ family information because it made them feel like we were treating them as adults.
And—they LOVED blending the credit card. They each got to have a chop of my card and watch it spin round and round like a black and silver cloud! I think it’s a moment that will stay with them for life.
At the end of the night, we chanted: ‘In our family we EARN interest, not pay it.’. I think that was one of our kids’ favourite parts.
My 19-year-old was recently told she needed a credit card in order to get a good credit rating. Now she has the confidence to tell them, ‘No!’ Knowing that I’m going to help them be better financially than we have been is an awesome feeling.
The Magic of Flipping Burgers
I’ve never met a kid who wants to learn ‘financial literacy’.
‘You know, Mum, what I really want is to be . . . more financially literate,’ said no kid, ever.
So you and I are going to do something sneaky: we’re going to hide our life-changing lessons in a hairnet.
That’s right—once your teen turns 15, they are going to get a part-time job.
This is a BIG deal.
To score a job they’ll need to build up their confidence, and sell themselves to a complete stranger in an interview. And then once they start working, they’ll learn all about bosses, bank accounts, low-cost super, taxes, and how long you need to deep-fry a nugget so it tastes someth
ing like chicken.
Financial literacy, baby!
This chapter checks off the seventh and arguably most important challenge of the Barefoot Ten: ‘get a part-time job from age 15 (even for just a few hours a week)’.
And that’s also why I’ve gone deep undercover for your kid . . . like Johnny Depp in 21 Jump Street undercover. (Actually, that’s an obscure reference to an eighties TV show. These days Captain Jack is better known as the owner of the two handbag dogs that our deputy prime minister threatened to kill. So let’s end this analogy now.)
Yes, over the past few months I’ve had a part-time job myself—applying for part-time jobs all over the joint.
Seriously, I even created an alter ego, 15-year-old ‘Scottina Papina’, and tackled the entire employment enchilada, applying for jobs at Coles, Woolies, Macca’s, KFC and small local businesses.
Best of all, I’ve boiled everything I’ve learned down to a simple, three-step system that will almost guarantee your teen will get hired:
•You’ll hear from the top tacos at Australia’s biggest youth employers on behind-the-scenes hacks to score a job (like ‘front up and talk to the manager at 4 pm on a Tuesday’).
•Then your teen will fill out my Zero to Hero Résumé template, specifically designed for kids with little to no experience, and which answers the five specific questions that all employers really want applicants to address.
•Finally, they’ll use my ‘Open Book Interview’ strategy to blitz their interview . . . because they’ll walk into the interview carrying the perfect answers to all of the questions.
What follows is possibly the most confidence-boosting thing your teen will ever do.
Let’s get flippin’.
Cold cuts
I got my first bona fide job the day I turned age 14 and nine months.
Seriously, I was the sort of kid who marked the day on the calendar in the kitchen.
I remember questioning my dad about this bizarre age restriction. Sure, I said, I could totally understand that the Government needed to protect primary school kids from being pimped out by their parents. But what made absolutely no sense to my 14-year-old brain was the tacked-on nine months.
What was supposed to happen to my adolescent brain in those 270 days?
Would I magically wake up nine months after my birthday with the new-found skill of stacking shelves? Or maybe lawmakers were counting back to the month I was conceived?
My father’s response to my whining was to pull out his parental ‘get out of jail free’ card: ‘Don’t argue with me, mate. I don’t make the rules. It’s the law!’
And he was (sorta) right.
It turns out that the law states that you do have to be a ‘minimum age of 14 and nine months’ . . .
. . . if you’re doing ‘door-to-door sales work’ . . .
. . . in the ACT.
In most other states the minimum age is 13, though interestingly in Tassie there’s no minimum age whatsoever (which explains why Tasmania has so many 12-year-olds selling encyclopedias door to door).
Regardless of state-based laws, many employers have their own rules for employment age. McDonald’s and KFC, for example, won’t employ anyone under the age of 14 (or 15 for Victoria, where bizarrely they deem that teens need another year to mature).
Anyway, from the day I turned 14 I’d been working on getting a job at my local Woolworths (I’m so old it was called Safeway back then). I’d handed in my résumé, filled out the application form in advance, and had a few casual follow-ups with the store manager.
It worked. I scored a job!
In the . . . delicatessen?
I came in for my first shift and was introduced to the deli team. It turned out I was the only male staff member in a 10-strong team of women. Then I was given my uniform—a white butcher’s jacket, a red bow tie and a paper hat. Seriously, I looked like one of the Village People.
Now, because I was a teenage boy, I was intensely interested in teenage girls . . . and the cutest girls at Safeway were the checkout chicks (a politically incorrect term, for sure).
My friend Matt also worked at Safeway, but he had the good fortune to be employed as a grocery boy (another politically incorrect term). That meant he got to flirt with the checkout chicks and do price checks for them.
Teehee-hee, aisle three price check, please . . . on condoms!
They never called me over the PA for a price check. I sat at the back of the store, wearing my little bowtie and paper hat, handling the salami. Or stuffing a chicken’s butt. Or navigating the volatile emotions of the middle-aged women I worked with.
Still, I look back on those years at Safeway as one of the most enjoyable times of my life. Sure, the work wasn’t very stimulating, but I got the feeling that I was part of a bigger team, and I made friendships that I still have to this day.
Even better, I can remember my very first payday, tearing open the dot-matrix-printed payslip and then rushing to the ATM to see if my money had been deposited.
Finally, I had freedom—I was earning my own money.
I used that money to restore a car (which I thought would help me with girls . . . but didn’t).
I used it to go on holidays when I finished school (with my mates . . . no girls).
And I used it to kickstart compound interest (badly at first, but that’s another adventure).
What’s more, I have never felt wealthier than I did that day. And it’ll be the same for your teen when they get that first job.
There’s only one challenge: you’re going to have to do some work yourself to make it happen.
Parents: Would you like fries with that?
Like I said, I’ve been talking to some of the top tacos at the big employers lately, including the head of HR at Maccas, Jennifer St Ledger.
She totally gets it: ‘We’re employing the parents just as much as the teenager,’ she told me.
‘After all, they’re the ones who wash the uniforms, and who wait in their car at night for their shift to finish.’
I agree.
And that’s why I’m talking to you right now.
Look, I’m not going to pretend that this isn’t going to be a pain in the Quarter Pounder from time to time.
What I am telling you is that it will be worth it.
Besides, you drive your kid to basketball practice, right?
Well, chances are they’re never going to make it to the NBA (just look at your husband’s gene pool!).
So I want you to reframe your kid’s part-time job and think of it as an extra subject at school.
However, in this class they’re going to learn how to turn up on time, present themselves well, follow instructions, work hard, and get along with random people from different backgrounds. There will be no grades, but they’ll certainly know the score, especially if their boss is a hard-arse.
That’s an education unto itself.
I’d go as far as to say that any kid who finishes high school without having done at least some form of paid employment (even if it’s over the summer holidays) hasn’t had a well-rounded education.
It really is that important.
But I can’t work! It’ll affect my studies!
Maybe you don’t share my passion for part-time jobs.
Maybe you’re like the mother who once wrote to me saying that she wouldn’t encourage her 15-year-old daughter to ‘slave away’ in a fast-food restaurant because the work was ‘beneath her’.
Really, she actually wrote that. (My advice was that she should get her princess a job scrubbing toilets . . . and thank me later for all the money she’d save in therapy.)
Or perhaps you’re worried that part-time work will impact your teen’s schoolwork. Kids will throw this up as an excuse too: ‘I can’t work! It’ll affect my studies!’
Don’t fall for it.
Fact is, millions of teenagers have worked a few shifts on a weekend—before their all-important final years—without it affecting their academ
ic studies.
Of course, this isn’t about having your teen work 50 hours a week so they can afford a wardrobe that rivals Kylie Jenner’s. You obviously don’t want them working so much that the only thing they can recite is what goes into a Big Mac. It’s about them getting a taste of the real world.
Finally, perhaps it’s not you who’s dragging the chain, but your teen who doesn’t want to work.
I surveyed 3500 Barefooters on my Facebook page, and 76 per cent of parents said their teens were ‘keen as mustard’ to get a part-time job. Yet that also means that 24 per cent need a gentle, loving kick up the backside. Here’s how to do it.
Parents, repeat after me:
‘I will no longer give my teenager any pocket money or handouts.’
If you don’t want to raise a spoilt brat, you’ll put up with the temporary drama and slamming of doors and encourage them to go out and work for their money. (Actually, it’s fine to keep paying them pocket money while they apply for jobs but let them know the clock is ticking, and the money will stop in a month.)
It’s really as simple—and brutal—as teaching them the difference between ‘needs’ and ‘wants’.
Example:
Your teenage daughter ‘needs’ a warm jacket for winter. She may ‘want’ you to buy it from ASOS. However, if you’re the one shelling out for it with your hard-earned, you can buy her a daggy but perfectly warm one from Kmart for $15. It’s her choice.
Similarly, your teenage son may ‘want’ to have credit on his phone, but all you ‘need’ is to be able to call him after he’s finished basketball practice. If he ‘wants’ to text his crush, well, he can always use your phone. It’s his choice.
Ultimately you know your kid better than I do—so I’ll leave it to you to get your teen over the line.
And when they’re ready, I’m going to knock their socks off, so that they can become fully Barefoot.
Behold . . .