Latest / Dr Justin Coulson's Happy Families / #1290 - Hey Kit #1 - Raising Money-Smart Kids: Teaching Under 10s About Dollars and Sense

Transcript

#1290 - Hey Kit #1 - Raising Money-Smart Kids: Teaching Under 10s About Dollars and Sense · Dr Justin Coulson's Happy Families

0:00
Speaker 1: If you're looking for ways to encourage your kids to
0:02
Speaker 1: learn about saving and smart spending, check out Kit, a
0:06
Speaker 1: pocket money app and card built by Combank. It teaches
0:10
Speaker 1: kids about earning money through chores and saving in buckets
0:14
Speaker 1: or what Kit calls stacks. Kit is free for eligible
0:19
Speaker 1: Combank Yellow customers, t's and C supply, or just fifty
0:23
Speaker 1: dollars a year for up to five children. Download the
0:26
Speaker 1: app or visit haykit dot com dot Au. You can
0:29
Speaker 1: also download Kit's free pocket Money one O one guide
0:32
Speaker 1: from the Kit website at Heykit dot com dot Au.
0:35
Speaker 1: TMD available on the website. Consider it appropriate for you?
0:42
Speaker 2: How do we talk about money with our children? This matters.
0:46
Speaker 1: I've observed something over the last several years. I spent
0:50
Speaker 1: a lot of time with people who have got a
0:51
Speaker 1: lot of money. I spend a lot of time with
0:52
Speaker 1: people who have no money. I'm one of those people
0:54
Speaker 1: who's kind of in the middle. I've got enough for
0:56
Speaker 1: my needs, but not nearly enough for my wants. Today,
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Speaker 1: we're packing conversations with kids about money. Welcome to the
1:03
Speaker 1: Happy Families Podcast, Real parenting solutions every day on Australia's
1:07
Speaker 1: most downloaded parenting podcast.
1:09
Speaker 2: Today, I'm joined by Ish co Ish is.
1:12
Speaker 1: The founder and Managing Director of the Commonwealth Bank of Australia.
1:14
Speaker 1: Is Kit Kit is a pocket money app and card
1:17
Speaker 1: that teaches kids about money. Kit really really glad that
1:21
Speaker 1: you've joined me for this chat. We're going to focus
1:24
Speaker 1: on under tens today, although I think some of these
1:25
Speaker 1: principles will be applicable across the board. Ish, let me
1:29
Speaker 1: ask you this first question. Would you agree with me?
1:31
Speaker 1: Do you think that some people are talking about money
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Speaker 1: a lot and some people are not talking about money
1:35
Speaker 1: at all with their kids.
1:36
Speaker 3: Research shows that's a really well known correlation between how
1:40
Speaker 3: well off a family is and how good their kids
1:42
Speaker 3: are at money. And that tends to be because people
1:46
Speaker 3: who have more money have more resources and time. They
1:49
Speaker 3: also tend to have high financial literacy themselves. And when
1:53
Speaker 3: they have high financial literacy, they can pass that on
1:56
Speaker 3: to their kids. But I think, you know, it's a
1:58
Speaker 3: big taboo in our society to talk about money sometimes.
2:02
Speaker 3: So you know, people say, you know, your kid might
2:04
Speaker 3: ask you or how much do you earn? You're like,
2:05
Speaker 3: oh my god, like you know why you asking this?
2:07
Speaker 4: You can't ask this? This is embarrassing.
2:09
Speaker 3: But actually a lot of those conversations and understanding your
2:12
Speaker 3: kid's curiosity. Kids are naturally curious, they want to learn
2:15
Speaker 3: about money, and engaging your kids in that conversation is
2:18
Speaker 3: actually how kids learn about money. A lot of people
2:21
Speaker 3: will talk about the role of schools being really important,
2:25
Speaker 3: which definitely has a role to play, But if you
2:27
Speaker 3: think about what are your key influencers, seventy percent of
2:30
Speaker 3: kids say their parents are their key influence, and that
2:33
Speaker 3: mechanism is typically through the conversations that you're having, but
2:35
Speaker 3: also the role modeling and how you behave you're going
2:38
Speaker 3: to the shops, you're buying something, what are they seeing you?
2:40
Speaker 4: Role modeling.
2:41
Speaker 3: These are all the things that actually build their attitudes
2:44
Speaker 3: and their experiences of money, which is much more important.
2:48
Speaker 2: This is really interesting.
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Speaker 1: I saw a real just recently on social media, and
2:52
Speaker 1: it was one of those hardcore entrepreneur guys. So what
2:55
Speaker 1: I'm going to say is highly provocative, not suggesting that
2:57
Speaker 1: this is what I believe, just what this guy said.
3:00
Speaker 2: He basically said, I.
3:00
Speaker 1: Don't want the school teaching my kids about money.
3:02
Speaker 2: That's my job.
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Speaker 1: I mean, this guy's worth one hundred million, two hundred
3:05
Speaker 1: million dollars something ridiculous like that, But he basically said,
3:07
Speaker 1: teachers don't know anything about money, they don't have any
3:09
Speaker 1: I'm the one with the money, and I want to
3:11
Speaker 1: teach my kids about that. Now, potentially offensive, potentially very provocative,
3:15
Speaker 1: but I guess when you bring this up and tied
3:17
Speaker 1: in with what I said at the start, it kind
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Speaker 1: of My experience has been the people that I know
3:21
Speaker 1: who are extremely well off, they obsess about money. They
3:24
Speaker 1: say things like, yeah, I don't really think about money
3:27
Speaker 1: that much, and I'm like, that's just a lie.
3:29
Speaker 2: You think about and talk about money all the time.
3:32
Speaker 1: I guarantee they're in their finances constantly, and I don't
3:34
Speaker 1: know what they're saying when the kids say how much.
3:36
Speaker 2: Money do you earn? Mum or Dad?
3:38
Speaker 1: But I reckon they're saying I earn enough, I earn plenty,
3:41
Speaker 1: which is very different to many other conversations. What do
3:44
Speaker 1: you think that kids need to know? Like I think
3:46
Speaker 1: about what this Dan Martel, entrepreneur, social media guru guy
3:50
Speaker 1: is saying, and clearly he thinks that his kids need
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Speaker 1: to know something about money that the school can't teach them.
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Speaker 2: What do you reckon?
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Speaker 1: As you've looked at all of your data, what do
4:01
Speaker 1: you think that kids actually need to know about it?
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Speaker 3: So, firstly, I want to say, like this entrepreneur is
4:07
Speaker 3: kind of a symbol of why a lot of parents
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Speaker 3: feel so not confident about talking to the kids about money,
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Speaker 3: that kind of stereotype of I have lots of money,
4:18
Speaker 3: therefore I know. So therefore if you don't have lots
4:20
Speaker 3: of money, then you don't know, and therefore you shouldn't
4:22
Speaker 3: which is actually the deposite what your kid. First, the
4:24
Speaker 3: first thing that you as a parent, regardless of how
4:26
Speaker 3: confident you feel about money yourself, is that they need
4:30
Speaker 3: to believe that they can be good at money. You
4:33
Speaker 3: don't have to be like a pro investor in the
4:35
Speaker 3: stock market to be good at money, right, And this
4:37
Speaker 3: is part of the challenge that being good at money
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Speaker 3: isn't about having lots of money. It's about being able
4:43
Speaker 3: to use money as a tool to get what you
4:46
Speaker 3: want in life. So it's about managing your money in
4:49
Speaker 3: line with what you want to achieve and not being
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Speaker 3: a slave to money necessarily.
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Speaker 2: I don't know how to describe how I felt when
4:54
Speaker 2: I saw it.
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Speaker 1: I mean, part of it, these things are always that
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Speaker 1: little bit sort of inspiring they're supposed to get your parts,
5:00
Speaker 1: and at the same time, I was just thinking, how arrogant,
5:03
Speaker 1: how just I don't actually have the words, but yeah,
5:09
Speaker 1: I'm just it. Really it really got onto my skin.
5:11
Speaker 1: So in terms of what kids need to know, what
5:13
Speaker 1: you're saying is they need to understand that money has
5:15
Speaker 1: value and that it helps them to get things in
5:17
Speaker 1: life that matter. And then it, I guess it comes.
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Speaker 3: Down they need to believe the self belief, so only
5:21
Speaker 3: a parent can really teach it. So they need to
5:23
Speaker 3: believe that they can do it and that they can
5:25
Speaker 3: manage money. Then more concretely, those specific lessons around and
5:29
Speaker 3: this can start from the age of sort of five
5:31
Speaker 3: to seven. It's like understanding that saving money is good
5:34
Speaker 3: understanding when you get to sort of eight intent understanding
5:37
Speaker 3: what interest is that if you save money, you're going
5:40
Speaker 3: to get paid money, and LifeWise, if you borrow money,
5:42
Speaker 3: you're going to be paying even more money because they
5:44
Speaker 3: are paying interest on the money you borrow. They need
5:46
Speaker 3: to understand delayed gratification for parents is a really big
5:51
Speaker 3: skill that's important. So that's the ability to not spend
5:54
Speaker 3: on your money straight away, but to be able to
5:56
Speaker 3: reflect and think is this really what I want?
5:59
Speaker 4: Maybe not, and I can.
6:00
Speaker 3: Wait to buy something later or buy something else that
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Speaker 3: I want even more. And then it's also really important
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Speaker 3: that they understand earning. So like from a five to
6:09
Speaker 3: seven year age range, it's knowing that people are going
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Speaker 3: to work to earn money.
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Speaker 4: Most people earn money by working.
6:14
Speaker 3: But then as they get sort of to the eight
6:16
Speaker 3: to ten range, then it's they might identify them multiple
6:19
Speaker 3: different ways that they could make money. Some of it
6:20
Speaker 3: maybe not totally realistic, some of it might be. But
6:24
Speaker 3: then also that understanding of people have different levels of income,
6:28
Speaker 3: different circumstances, and why different people make different financial decisions,
6:32
Speaker 3: but also the importance of charity and helping out others.
6:35
Speaker 1: I love this so the delay gratification, saving, understanding how
6:40
Speaker 1: interest works both for you and against you, and also
6:44
Speaker 1: working out how earning money works. I just love the
6:48
Speaker 1: late gratification thing. I remember when I was a kid,
6:50
Speaker 1: I'd get my pocket money and I would just go
6:52
Speaker 1: straight to the touch shop and spend it all on food,
6:56
Speaker 1: or I would go down to the arcade and spend
6:58
Speaker 1: it all on video game. That was that was it,
7:02
Speaker 1: and no one was talking to me about what I'm
7:03
Speaker 1: supposed to do with my money. Literally, it was just
7:06
Speaker 1: cash in my pocket and it burned a hole through
7:08
Speaker 1: it gone just like that.
7:11
Speaker 2: So do you reckon that?
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Speaker 1: It's the Dan Martell's of the world. It's these entrepreneurial
7:15
Speaker 1: big noting themselves, people with lots of money that stop
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Speaker 1: parents talking to their kids about money.
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Speaker 2: And if yes, what else.
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Speaker 1: Is there other than the social media shame of thinking, oh,
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Speaker 1: my goodness, I'm not literate and rich like that guy,
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Speaker 1: so therefore I shouldn't talk about it.
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Speaker 3: I think he is part of the problem that he's
7:34
Speaker 3: kind of compounding that shame on parents.
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Speaker 4: It's like as if parents don't have enough guilt already,
7:37
Speaker 4: hits adding on to that.
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Speaker 3: So I think the best thing advice I can give
7:42
Speaker 3: for parents who want to build their confidence and become
7:45
Speaker 3: better at having these conversations with their kids is firstly,
7:49
Speaker 3: if you're not sure, look it up yourself. So taking
7:51
Speaker 3: some small steps a few You know, some adults are
7:54
Speaker 3: also exactly sort of similar to what you said and
7:57
Speaker 3: you were as a kid. You know, they get their
7:58
Speaker 3: paycheck and living page to paycheck because they just have
8:01
Speaker 3: to pay everything on the bills, and then maybe it's
8:02
Speaker 3: a little bit of like the uber eats habit is
8:04
Speaker 3: too much. So if that's you, there's lots of resources
8:08
Speaker 3: out there, like the government has the money smart resources,
8:10
Speaker 3: et cetera. Just start educating yourself. Because if you start
8:14
Speaker 3: educating yourself and understanding the importance saving and doing that,
8:17
Speaker 3: that helps you then do it with your kid and
8:19
Speaker 3: it can be you know, a joint learning journey as
8:21
Speaker 3: a family. And I know you talk a lot justin
8:23
Speaker 3: about connection with your kids, and money is another way
8:26
Speaker 3: that you can do that. So you know, if you
8:28
Speaker 3: want to plan a holiday with your family, you can
8:30
Speaker 3: talk to your kids about, oh, we're all going on
8:32
Speaker 3: a holiday. You know, what would you like to buy
8:33
Speaker 3: when you're a holiday and I'm going to save up
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Speaker 3: this for the holiday. Why don't you think about what
8:37
Speaker 3: you can save so that you can buy this thing
8:39
Speaker 3: that you won your holiday. And then you're both building
8:41
Speaker 3: your money skills together and you're doing it in a
8:43
Speaker 3: really positive way.
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Speaker 2: Just recently, I was hanging. I wasn't recently. It was
8:46
Speaker 2: a few months ago.
8:47
Speaker 1: Our family was in your South Wales when the East
8:49
Speaker 1: Show was on and we said to the kids, let's
8:52
Speaker 1: get some dollars together, let's get saving so that you
8:55
Speaker 1: can afford to buy the show bags that are important
8:57
Speaker 1: to you a little bit later this year, for my fiftieth,
8:59
Speaker 1: we're going to be going away as a big family holiday,
9:02
Speaker 1: and we've said to the kids, we're.
9:03
Speaker 2: Paying for the flights, we're paying for the.
9:05
Speaker 1: Accommodation, we're paying for the bulk of the activity that
9:09
Speaker 1: we're doing. But there's a day and a half spare
9:11
Speaker 1: when we have this holiday where we can do some
9:13
Speaker 1: other stuff not paying for that. If you want to
9:16
Speaker 1: do some stuff, you've got to start saving now so
9:18
Speaker 1: that in November you can afford it. So again it
9:20
Speaker 1: comes back to those principles that you've just shared around
9:22
Speaker 1: the delayed gratification, knowing how to model it and go
9:26
Speaker 1: through the experience together. We're saving up for it, just
9:29
Speaker 1: like they are. These are the kinds of things where
9:31
Speaker 1: I hear you talk and I'm like, oh, yeah, okay,
9:33
Speaker 1: I'm getting some stuff.
9:34
Speaker 2: Right, because I'm getting a lot of stuff wrong as well.
9:42
Speaker 1: It can be helpful for kids to learn the basics
9:45
Speaker 1: of how finances work, especially in this digital age of
9:49
Speaker 1: invisible money. Kit is a pocket money app and card
9:53
Speaker 1: built by Combank. It helps kids learn about money through earning, saving,
9:58
Speaker 1: and spending pocket Money, as well by playing fun games
10:01
Speaker 1: and quizzes.
10:02
Speaker 2: Kit is free for.
10:03
Speaker 1: Eligible CommBank Yellow customers, T's and C supply, or just
10:07
Speaker 1: fifty dollars a year for up to five children. Download
10:11
Speaker 1: the app or visit haykit dot com dot a U.
10:14
Speaker 1: You can also download kits Free Pocket Money one O
10:17
Speaker 1: one guide from the kit website at Heykit dot com
10:20
Speaker 1: dot AU TMD available on the website. Consider it appropriate
10:23
Speaker 1: for you is a tricky.
10:25
Speaker 2: Question for me.
10:28
Speaker 1: Money like, money's all online now, it's all symbols, it's
10:32
Speaker 1: all code. You open up the app, and that's when
10:35
Speaker 1: you see the money that you've got.
10:36
Speaker 2: You tap your card.
10:37
Speaker 1: Or whatever, and the money sort of goes from one
10:40
Speaker 1: place to another place.
10:42
Speaker 2: When I was growing up, you've got to hold it.
10:44
Speaker 2: It was tangible.
10:45
Speaker 1: You could save it in your piggy bank and go
10:47
Speaker 1: into the bank and put it in the deposit and
10:49
Speaker 1: all that sort of thing. We just don't do that anymore.
10:52
Speaker 1: If cash is disappearing, how do you teach the value
10:57
Speaker 1: of money? Since we can't do it the are we
11:00
Speaker 1: used to.
11:01
Speaker 4: So cash becoming digital is a real challenge for kids.
11:05
Speaker 3: Particularly the younger kids, because they don't money is an
11:08
Speaker 3: abstract concept, the idea that you have this thing that
11:12
Speaker 3: you receive and then you hand over in.
11:14
Speaker 4: Order to buy something.
11:16
Speaker 3: It's a really tricky concept, and so for very young kids,
11:19
Speaker 3: I would still advise, even though we rarely see it anymore,
11:22
Speaker 3: with using cash, for young, very young kids, like around
11:25
Speaker 3: the age of five, using cash is still important just
11:28
Speaker 3: so that they can understand that he's a thing you transfer,
11:31
Speaker 3: there's some source of value in order to buy things.
11:35
Speaker 3: But we very quickly realize, and you know, even for
11:38
Speaker 3: a very young age I had when my kid was three,
11:40
Speaker 3: he was already tapping a card and realizing that you
11:42
Speaker 3: need to tap something to be able to unbuy something.
11:44
Speaker 3: So very quickly they realize that purchases can also happen online.
11:48
Speaker 3: So my advice there is to there's no consequence when
11:52
Speaker 3: you are tapping a card, so when you hand over cash,
11:55
Speaker 3: there's actually a pain signal in your brain that says
11:57
Speaker 3: you're actually losing something and you're giving something away. That
12:01
Speaker 3: response is really muted when you're just tapping something because you're.
12:04
Speaker 4: Like, oh, I can just tap ha ha I get stuff.
12:06
Speaker 3: So what you need to do is to try and
12:07
Speaker 3: recreate that feeling of actually, when I'm paying for something,
12:11
Speaker 3: I'm losing something. So what you can do in a
12:13
Speaker 3: digital context, for example, is show the balance, So before
12:16
Speaker 3: your child is your child has a card, or even
12:19
Speaker 3: if you're making a payment, show them the balance, make
12:22
Speaker 3: the payment, show them the balance after and say I
12:25
Speaker 3: had something and now I've spent this money and I
12:27
Speaker 3: don't have it anymore.
12:28
Speaker 4: So you're recreating that feeling.
12:30
Speaker 3: The other thing you can do is let them experience
12:33
Speaker 3: the consequences for themselves. So I know a lot of
12:37
Speaker 3: kids in from quite a young age of paying online games,
12:40
Speaker 3: and often that's linked to your parents credit card, which
12:43
Speaker 3: can seem like a bit of an unlimited source of
12:45
Speaker 3: money that's just.
12:46
Speaker 4: Only limited by your ability to say no.
12:49
Speaker 3: But what you can do, for example, is if they
12:53
Speaker 3: have their own card, for example, you can just put
12:55
Speaker 3: unlimited amount and that's so poper money, so actually spending
12:57
Speaker 3: their own money on their game. And so when they're
13:01
Speaker 3: spending their own money, they're going to realize really quickly
13:03
Speaker 3: that it runs out and that there were real consequences
13:05
Speaker 3: that if they have zero, that there's no more purchases happening.
13:08
Speaker 3: So that then helps you give that link between payment
13:12
Speaker 3: and consequence.
13:13
Speaker 2: Yeah, this really fits.
13:15
Speaker 1: We recently decided that we were going to start doing
13:18
Speaker 1: our fruit and veggie shopping at the local market on
13:21
Speaker 1: the weekends, and we thought we'll take cash along instead
13:25
Speaker 1: of tapping the card. And it's really I forgot what
13:28
Speaker 1: it feels like to have money in your pocket and
13:31
Speaker 1: then not have money in your pocket, and it's like, Wow,
13:34
Speaker 1: we just spent that much money, whereas if we were
13:36
Speaker 1: tapping a card, we're not going to have. We're going
13:39
Speaker 1: to have, like you said, a much more muted experience
13:41
Speaker 1: of the spend ish. Let me ask you just a
13:44
Speaker 1: general question about pocket money. So maybe it's because I've
13:48
Speaker 1: got six kids and I'm just over paying pocket money.
13:52
Speaker 1: But I can't be bothered with pocket money anymore. I
13:54
Speaker 1: don't give the kids pocket money. I basically say to them,
13:57
Speaker 1: if you need something, I'll think about maybe giving you
13:59
Speaker 1: the money for it. We won't, And when you're old enough,
14:01
Speaker 1: go get a job and pay for your own stuff.
14:03
Speaker 1: Like I'm just I'm a bit over pocket money. We
14:05
Speaker 1: used to be so diligent when our kids were younger,
14:08
Speaker 1: our eldest kids were young, we were so good with
14:10
Speaker 1: pocket money. I have two questions. It's a double barreled question.
14:14
Speaker 1: First question is this our family is still giving kids
14:17
Speaker 1: pocket money? And second question how much?
14:22
Speaker 3: Oh?
14:22
Speaker 4: Great questions?
14:24
Speaker 3: Justin so so he chows about seven and ten parents
14:28
Speaker 3: are giving pocket money.
14:31
Speaker 4: Money means different things to different people.
14:33
Speaker 2: Yeah, but what you're saying is I'm being a slight parent.
14:35
Speaker 2: That's what I'm hearing.
14:36
Speaker 3: No, every family is different, right, So for some, you know,
14:40
Speaker 3: some families, pocket money is you know, I want to
14:42
Speaker 3: go out with my friends. Here is twenty bucks, thirty bucks,
14:46
Speaker 3: and that's pocket money. But for others, it's that regular
14:49
Speaker 3: cadence of every week I'm going to give you, you know,
14:50
Speaker 3: five dollars. I will say that the literature does say
14:53
Speaker 3: the best way to build financial literacy in kids is
14:57
Speaker 3: to give them a regular source of money and to
15:01
Speaker 3: allow them to make those decisions in saving and spending,
15:04
Speaker 3: and that you provide that parental guid and it's around
15:07
Speaker 3: saving money and you and how they think about spending.
15:10
Speaker 3: If you find it really difficult, like sixy I have
15:12
Speaker 3: no idea how you do it.
15:14
Speaker 4: I would never be able to manage six kids myself.
15:16
Speaker 3: So I totally understand that it's really difficult to remember,
15:19
Speaker 3: you know, every week to be able to, like, especially
15:21
Speaker 3: if you're doing it in cash. There are digital ways
15:24
Speaker 3: to do it online where you can just set and forget.
15:26
Speaker 3: So at kid, for example, you can set up chores
15:29
Speaker 3: and get pocket money. You can actually set up automatic
15:32
Speaker 3: splitting for your kids, so you can say, when you
15:34
Speaker 3: get pocket money, always remember geting a savings habit, so
15:36
Speaker 3: you know, part of it's going to go into your
15:39
Speaker 3: savings account, that's going to warn interest, part of it's
15:41
Speaker 3: going to go onto a card and have that conversation.
15:44
Speaker 3: But then you as a parent can kind of be
15:45
Speaker 3: hands off and be like, okay, set and forget, but
15:47
Speaker 3: then you can have those conversations when.
15:49
Speaker 1: They think about yeah, hands off. So essentially what you're
15:53
Speaker 1: saying is digitally you can you can literally set it
15:55
Speaker 1: up so that they get their five all to ten
15:57
Speaker 1: bucks a week and it goes in and they're pre
16:00
Speaker 1: committed because you've had the conversation with them that they're
16:02
Speaker 1: going to save this percentage and they're going to have
16:05
Speaker 1: this much for spending. But it's all happening automatically. It
16:07
Speaker 1: doesn't even need willpower, right, Like you're setting up ahead
16:10
Speaker 1: of time.
16:11
Speaker 3: Yes, absolutely, so about sitting them up for success, right,
16:13
Speaker 3: Like you can't expect an eight year old to remember
16:15
Speaker 3: every single week to be able to transfer some of
16:17
Speaker 3: their pocket money into a savings.
16:18
Speaker 4: Account, Like it's just too difficult.
16:20
Speaker 3: Right. But what's more important is that you, as the parent,
16:22
Speaker 3: have had the conversation about why you're doing. They understand
16:25
Speaker 3: why it's good to have that savings automation. I know
16:28
Speaker 3: you also second part of your question was.
16:29
Speaker 4: Around how much, So I will say these are averages.
16:33
Speaker 3: So every family is different, Every situation is different, what
16:35
Speaker 3: kids are expected to be responsible for it.
16:37
Speaker 4: The pocket money is also different.
16:39
Speaker 3: So don't feel that this is if there was any
16:43
Speaker 3: children listening and you don't get paid this amount, don't
16:45
Speaker 3: feel like this is licensed.
16:46
Speaker 4: Tell your parents that this is how much you should
16:48
Speaker 4: be paid.
16:48
Speaker 1: So well, before you even tell me cost of living
16:51
Speaker 1: cost of living, have you got any data about how
16:53
Speaker 1: cost of living crisis has affected pocket money?
16:56
Speaker 3: We absolutely have so No the last about two years ago,
17:01
Speaker 3: we saw that kids pocket money was decreasing and that's
17:04
Speaker 3: probably a reflection of the cost of living crisis that
17:06
Speaker 3: some parents saying, you know, we've got to cut back
17:08
Speaker 3: in pocket money is one of those areas that they
17:11
Speaker 3: have been cutting back.
17:12
Speaker 4: But in the last sort of six.
17:14
Speaker 3: Months or so, we've seen the amounts actually start to
17:16
Speaker 3: climb back up to where they were around in sort
17:19
Speaker 3: of twenty twenty two.
17:21
Speaker 4: So here the numbers dropping them.
17:23
Speaker 3: So on age of five to seven, the average is
17:25
Speaker 3: six dollars eighty age of eight to ten, the average
17:28
Speaker 3: is seven dollars. Thirty eleven to thirteen averages ten dollars,
17:32
Speaker 3: and this is per week, and fourteen to seventeen it's
17:34
Speaker 3: fourteen dollars twenty So some families are still using there's
17:38
Speaker 3: a rule of thumb that you can use, which is
17:40
Speaker 3: one dollar per year of age of the child.
17:43
Speaker 4: So a five year old would get five dollars a week.
17:44
Speaker 4: Six you'll get six dollars a week. I will say
17:46
Speaker 4: that's before.
17:47
Speaker 3: The current sort of period of inflation, so that rule
17:50
Speaker 3: hasn't necessarily been adjusted. But what's most important here is
17:54
Speaker 3: the amount doesn't matter so much as sort of what
17:56
Speaker 3: it represents to your child. So it shouldn't be so
17:59
Speaker 3: much that they could just whatever they want. It shouldn't
18:01
Speaker 3: be so little that they look at it and say,
18:03
Speaker 3: there's just no way I can buy anything. But it
18:05
Speaker 3: needs to be enough to kind of say, Okay, maybe
18:08
Speaker 3: I can buy some things for myself, but if I
18:10
Speaker 3: can save up, then I can buy something else I
18:12
Speaker 3: want for myself. So it needs to make them make
18:15
Speaker 3: a trade off between spending and saying. But it also
18:18
Speaker 3: needs to be something that obviously fits into your household budget.
18:21
Speaker 3: So sometimes what I advise to people who can't afford
18:24
Speaker 3: pocket money is to actually allocate a part of your
18:28
Speaker 3: family budget to the pocket money. So, for example, you
18:31
Speaker 3: want afternoon tea at school, so tell your kids you
18:35
Speaker 3: are responsible for what you have for afternoon tea at school,
18:37
Speaker 3: and we're going to go to the supermarket. And you
18:39
Speaker 3: have a budget of ten dollars a week because then
18:42
Speaker 3: and you can keep whatever whatever's left over, so you're chucking.
18:45
Speaker 3: Then go to the supermarket and say, hey, do wan
18:46
Speaker 3: want the really expensive chips. I get afternoon tia only
18:48
Speaker 3: two days out of the week, and I go go hungry,
18:51
Speaker 3: but the other three days.
18:51
Speaker 4: Don't let you kids so hungry. Please don't let them
18:54
Speaker 4: always make sure they meet their knees.
18:55
Speaker 3: But maybe they might then go really cheap scape their hair,
18:58
Speaker 3: really want that, Pope, come on, card to thirty dollars.
19:01
Speaker 3: I'm happy to just like buy the home brand of
19:03
Speaker 3: like the Space sticks and go with that for three
19:07
Speaker 3: weeks so I can buy something else, So then that
19:09
Speaker 3: doesn't sort of add to your household cost, but it
19:11
Speaker 3: still gives them the ability to make those spending and
19:14
Speaker 3: saving decisions.
19:15
Speaker 1: Okay, here's my summary of the conversation. If I want
19:17
Speaker 1: to have better conversations with my children about money, number one,
19:20
Speaker 1: I've actually got to prioritize it and recognize that there's
19:22
Speaker 1: value in teaching them about money and how it works.
19:25
Speaker 1: And it seems based on this discussion that they're going
19:27
Speaker 1: to they're going to be open to it from about
19:29
Speaker 1: the age of five or six, but they'll really start
19:31
Speaker 1: to kick into gear from around seven eight nine, which
19:34
Speaker 1: is about the same time they're learning about maths and
19:36
Speaker 1: getting those those ideas in their heads from school. The
19:40
Speaker 1: second thing that I'm picking up is that they need
19:42
Speaker 1: to understand savings, interest and delayed gratification so that they
19:49
Speaker 1: can both spend but also save and ideally go and
19:54
Speaker 1: do some earning. And the last thing that I'm really
19:56
Speaker 1: hearing you say is that for kids to understand the
20:01
Speaker 1: value of money, we've got to be open about it.
20:03
Speaker 1: We've got to be willing to share what's working and
20:06
Speaker 1: what's not and bring them into conversations around it.
20:10
Speaker 3: Absolutely picky nail that Justina and I think, particularly around
20:14
Speaker 3: being open with them, sort of going.
20:16
Speaker 4: Back to that story of you know, how much do
20:18
Speaker 4: you earn? How much does a house cost?
20:19
Speaker 3: I think it's really important that you know, kids are
20:21
Speaker 3: naturally curious and that we don't shut down that curiosity
20:26
Speaker 3: because often there's there's a different question that's actually being
20:29
Speaker 3: asked and the one they're actually asking, because how much
20:31
Speaker 3: you earn might be a curiosity about, you know, how
20:34
Speaker 3: is it that you make a living? Like you know,
20:36
Speaker 3: the how much is a house cost? Is will I
20:38
Speaker 3: be able to afford a house in the future, or
20:40
Speaker 3: maybe it's a question of why does my friend have
20:42
Speaker 3: a house? That you know, they're comparing themselves to others, So,
20:45
Speaker 3: you know, rather than shutting them down, it's sort of
20:47
Speaker 3: think about what's the conversation that they really want to
20:49
Speaker 3: be having with you?
20:50
Speaker 2: Did you tell your kids how much you want?
20:52
Speaker 4: He's not old.
20:53
Speaker 3: Enough yet, but he does think that he's that his
20:57
Speaker 3: father is extremely rich because he had to replace our
20:59
Speaker 3: air conditioner recently winning.
21:01
Speaker 4: But oh no.
21:02
Speaker 3: My winning money moment though, was he came up to
21:04
Speaker 3: me and he said, Mom, I want this toy for
21:08
Speaker 3: my birthday, but it's okay, we can wait for sale.
21:11
Speaker 4: And that for me, yeah, and this is five, So
21:14
Speaker 4: that for me was like a win.
21:15
Speaker 3: And I think, yeah, a lot of your attitudes they
21:18
Speaker 3: regardless whether you're having conversations my money, Like your kids
21:21
Speaker 3: are learning. So if you don't have if you don't
21:23
Speaker 3: have that conversation with them, they are learning anyway. So
21:25
Speaker 3: you know, I'm a notorious chiefs gain and obviously it's
21:27
Speaker 3: already rubbing off of my five year olds.
21:29
Speaker 1: So I'm just thinking about my conversations with my kids
21:32
Speaker 1: about money. They hear me complain about money a lot
21:35
Speaker 1: and how much I'm spending. They hear me complaining about
21:38
Speaker 1: the tax office a lot and how much the taxman takes.
21:42
Speaker 1: But I don't know. I mean, my kids have no
21:44
Speaker 1: idea how much income we have. They just know a
21:47
Speaker 1: lot about our spendings. And this conversation is make me
21:51
Speaker 1: think that I need to sit down and have some
21:53
Speaker 1: more financial chats. We have chats every Sunday in our family.
21:56
Speaker 1: Maybe maybe tomorrow's chat is one of those. Is the
22:00
Speaker 1: managing director of CBA's Kit, a pocket money app and
22:05
Speaker 1: card that teaches kids about money. It's been really good
22:08
Speaker 1: to have this chat with you. You've really provoked a
22:10
Speaker 1: lot of thoughts for me in ways that are much
22:12
Speaker 1: more helpful than those social media entrepreneurs that make everyone
22:15
Speaker 1: feel guilty about not having enough cash.
22:19
Speaker 4: Who wants to be there? That's not money goals.
22:21
Speaker 3: Money goals is are living your life the way you
22:23
Speaker 3: want to live it, and money is a tool.
22:25
Speaker 4: To get there.
22:26
Speaker 2: Yeah, really appreciate the chat. Thanks so much for your time.
22:28
Speaker 4: Thanks Justin.
22:29
Speaker 1: The Happy Family podcast is produced by Justin ruland from
22:32
Speaker 1: a Bridge Media Mim Hammonds provides additional admin and research support.
22:37
Speaker 1: If you'd like more information about making your family happier,
22:39
Speaker 1: find it at happy families dot com.
22:41
Speaker 2: Dot au.
22:47
Speaker 1: Kit is a pocket money app and card built by Combank.
22:51
Speaker 1: Kit helps kids learn all about money, from earning, saving,
22:55
Speaker 1: and spending their pocket money through to learning about money
22:58
Speaker 1: by taking quizzes and play fun games. It's guilt free
23:01
Speaker 1: screen time that helps them develop financial confidence. Kit is
23:06
Speaker 1: free for eligible Combank Yellow customers, t's and c supply
23:10
Speaker 1: or just fifty dollars a year for up to five children.
23:14
Speaker 1: Download the app or visit haykit dot com dot a U.
23:17
Speaker 1: You can also download Kit's free Pocket Money one oh
23:20
Speaker 1: one guide from the Kit website at heykit dot com
23:23
Speaker 1: dot AU TMD available on the website.
23:25
Speaker 2: Consider it appropriate for you.