Latest / Dr Justin Coulson's Happy Families / #802 Making Cents of Money Management for Kids

Transcript

#802 Making Cents of Money Management for Kids · Dr Justin Coulson's Happy Families

• 0:03
  Speaker 1: It's the Happy Families podcast.
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  Speaker 2: It's the podcast for the time poor parent who just answers.
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  Speaker 1: Now today I'm a Happy Families podcast. I'm having a
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  Speaker 1: chat with the managing director of Kit. Kit is a
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  Speaker 1: financial app for kids so that we can help them
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  Speaker 1: to understand what to do with their money and have
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  Speaker 1: the conversations that matter, especially in times like this. Co
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  Speaker 1: is the MD for Kit. Yes, joins me right now. Hey,
• 0:29
  Speaker 1: nice to be with you. Thanks for having a chat
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  Speaker 1: about a topic that's becoming increasingly challenging as inflation and
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  Speaker 1: cost of living and interest rates and rents and mortgage
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  Speaker 1: stress just keep on increasing.
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  Speaker 2: Yes, becoming more important than of us. It's great to
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  Speaker 2: chat with you.
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  Speaker 1: Justin Kit. You've just done a brand new study. It
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  Speaker 1: was published maybe sort of four or five six weeks ago.
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  Speaker 1: Now can you tell me what you found when it
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  Speaker 1: comes to kids' parents and money.
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  Speaker 2: So we launched Kit in Beater and May last year,
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  Speaker 2: and when we launched the app, we were really deliberate
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  Speaker 2: about firstly trying to get a baseline of what kids
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  Speaker 2: financial capability in Australia looks like, and then try to
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  Speaker 2: understand what impact our appards and having on financial capability.
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  Speaker 2: So what we did was we interviewed thousands of Australian
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  Speaker 2: kids and their parents, some of whom didn't use the
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  Speaker 2: kit app and some who did, and we asked them
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  Speaker 2: questions to test the level of financial capability. And if
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  Speaker 2: you don't know the term financial capability, most people have
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  Speaker 2: heard of financial literacy, which really focuses on like a
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  Speaker 2: knowledge of financial concepts and understanding. But financial capability is
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  Speaker 2: much more encompassing and covers your attitudes and behaviors and
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  Speaker 2: the financial practices that kids are just getting involved in,
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  Speaker 2: because that is much more strongly correlated with their future
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  Speaker 2: success when it comes to money behaviors as an adult.
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  Speaker 2: So we ask four questions and the fourth were did
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  Speaker 2: you talk with your kid about money? And how many
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  Speaker 2: conversations did you have? Is your kid spending their own
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  Speaker 2: money and now they applying and is spending strategies when
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  Speaker 2: they're spending money? Does your kid have an opportunity to
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  Speaker 2: earn their own money, whether that's formal or informal, like
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  Speaker 2: doing chores and earning pocket money that way, And then
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  Speaker 2: finally we also asked about whether the kid was setting
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  Speaker 2: and saving their own money. So we asked the population
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  Speaker 2: The interesting thing that we found from just a baseline
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  Speaker 2: study Australian population was actually there's a decent proportion of
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  Speaker 2: Australian kids who are already doing all of these behaviors
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  Speaker 2: that would indicate they can be financially sad in the future. So,
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  Speaker 2: for example, we found that eighty percent of parents and
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  Speaker 2: carers are talking to their children about money within the
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  Speaker 2: past two weeks, and on average they're talking about three
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  Speaker 2: times a week. Sixty four percent of kids are applying
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  Speaker 2: spending strategies, and eighty secular kids asked buying things with
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  Speaker 2: their own money, not just their parents' money, but their
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  Speaker 2: own money, and seventy four percent of children are saving
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  Speaker 2: their own money. So that's already a pretty something that
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  Speaker 2: we were really surprised about. When we then looked at
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  Speaker 2: the comparison between people who were using kid or a
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  Speaker 2: digital service that is encouraging as a tool to help
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  Speaker 2: families do this, we found that there was a statistically
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  Speaker 2: significant increase in all of those behaviors, with the exception
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  Speaker 2: of children buying things to their own money, So we
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  Speaker 2: didn't have children additional children who weren't buying things to
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  Speaker 2: the own many and then starting to buy things to
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  Speaker 2: their own money. But we saw that those kids were
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  Speaker 2: more likely to apply spending strategies than there were spending.
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  Speaker 1: So what I'm hearing you say, YSH, is that in
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  Speaker 1: general Australian parents are talking to their kids and having
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  Speaker 1: financial literacy conversations, which seems to be increasing the financial
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  Speaker 1: capability of Australian kids. What you're also finding is that
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  Speaker 1: when parents go to the effort with their children of
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  Speaker 1: downloading an app to help them to manage their financial situation,
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  Speaker 1: whether it's the kit app or another one, they seem
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  Speaker 1: to be doing just a little bit better, just marginally
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  Speaker 1: better and all the stuff that indicates financial literacy and
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  Speaker 1: financial capability. Is that a fair summation, yes.
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  Speaker 2: And I think you know what a digital service or
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  Speaker 2: of app that helps you do that is really about
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  Speaker 2: creating a system and a regular routine around it. So
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  Speaker 2: for example, in kid we've created a construct that's called payday,
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  Speaker 2: and the idea around having a regular schedule around that
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  Speaker 2: is an opportunity to prompt that conversation between parents and
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  Speaker 2: kids about you know what chores, if you've done this
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  Speaker 2: week and you know what have you earned and had
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  Speaker 2: the opportunity to talk about other things that have been
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  Speaker 2: going on money, but later in the house.
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  Speaker 1: So when you've done all this research, and given that
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  Speaker 1: you're working with parents and families all the time, what
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  Speaker 1: I'm curious to know is clearly kids have got their
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  Speaker 1: own money, they're spending their own money on their own things,
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  Speaker 1: and they are applying spending strategies when they're making purchasing decisions.
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  Speaker 1: Although that numbers a little bit lower. I think you
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  Speaker 1: said sixty four percent are really thinking thoughtfully about the
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  Speaker 1: strategies they want to approach. Here's my question. A kid's
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  Speaker 1: just blowing their money, Like I mean, when I was
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  Speaker 1: a kid, I went down to the corner store it
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  Speaker 1: or went on the lollies, or it went into the
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  Speaker 1: arcade games. Nowadays, with access to digital payments, we've got
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  Speaker 1: online gambling and betting, we've got online gaming. Generally, we
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  Speaker 1: see kids spend their money differently and in I guess
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  Speaker 1: less productive, less positive ways, or are they thoughtful about
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  Speaker 1: what they're spending their money on.
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  Speaker 2: So I think that's really interesting. That's one of the
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  Speaker 2: key key behaviors that kids have to learn. It's that
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  Speaker 2: delayed gratification. It's how do you exercise and that muscle
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  Speaker 2: that says I don't need to have everything now, but
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  Speaker 2: actually if I wait, I can get something even better.
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  Speaker 2: What we are seeing through the kit app is that
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  Speaker 2: there are some children who do spend all their money
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  Speaker 2: and you see the pocket money will come in and
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  Speaker 2: the pocket money will come out.
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  Speaker 1: That was funny.
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  Speaker 2: Actually, I do see. You know, more than a significant
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  Speaker 2: portion have actually set a specific goal, so you know
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  Speaker 2: they're actually saving for something and they've got money in
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  Speaker 2: there and they don't have a balance at zero. All
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  Speaker 2: of that comes down to, I think the conversation that
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  Speaker 2: happens with the parent about the importance of that to
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  Speaker 2: get the kid setting it up.
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  Speaker 1: Yeah, I was I was going to jump in and
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  Speaker 1: say exactly that. As a parent, I know that so
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  Speaker 1: that my kids don't do what I did because I
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  Speaker 1: was just so bad, Like I was hopeless with my
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  Speaker 1: money as a kid. I just spent it on whatever
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  Speaker 1: I wanted, whenever I wanted, until it was all gone,
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  Speaker 1: and then I waited until the next pay or the
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  Speaker 1: next pocket money. My sense is that parents are actually saying, well,
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  Speaker 1: you know what we're going to do the that holiday
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  Speaker 1: that we've been planning. We're going to go camping, We're
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  Speaker 1: going to go on that trip. We're going to go
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  Speaker 1: We're going to go to the Easter Show next year.
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  Speaker 1: It's a long way away, but it costs a fortune.
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  Speaker 1: So whether it's the Ekka or the Easter Show or
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  Speaker 1: whatever it is, in the relevant capitalisty parents are actually saying,
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  Speaker 1: let's put a budget together, let's use the app, let's
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  Speaker 1: use the digital tools that we have to do that.
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  Speaker 1: And I love that you've got the data right Like
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  Speaker 1: with the app, you you're not looking at individual families
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  Speaker 1: or justin Colson's kids have saved this much money, but
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  Speaker 1: you've got this this blanket data. You can say, wow,
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  Speaker 1: on average, here's what we're seeing. It must be fascinating
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  Speaker 1: to watch.
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  Speaker 2: It's absolutely fascinating. And one of the things that's surprise
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  Speaker 2: with the data is that one of the most popular
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  Speaker 2: categories of things that kids are saying, boy is actually
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  Speaker 2: donating to charity. Really yes, And you know that's obvious,
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  Speaker 2: only that the parents are really encouraging them to do
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  Speaker 2: so that when they do get their pocket money, that
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  Speaker 2: they set aside a little bit wi other And you know,
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  Speaker 2: particularly given the economic environment we're in right now, I
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  Speaker 2: think that's incredibly great work that Australian families are doing that.
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  Speaker 1: Yeah, I reckon the barefoot investor, I reckon. Scott Pave
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  Speaker 1: has a bit to do with that with his these
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  Speaker 1: different jars right now where I mean inflation and interest
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  Speaker 1: rates and cost of living. It's all anyone's talked about
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  Speaker 1: for the last twelve months, and some data is showing
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  Speaker 1: that things are a little bit better. But for everyday families,
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  Speaker 1: we're not necessarily feeling better just because the data is
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  Speaker 1: saying it's getting better, not really. So when when do
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  Speaker 1: you reckon? Or how do you reckon? Parents can integrate
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  Speaker 1: more of these kinds of conversations about money into their
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  Speaker 1: interactions with their kids, and how do they do it
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  Speaker 1: in a way that the kids aren't going, oh, my goodness,
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  Speaker 1: we're going to lose the house, or I know, what
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  Speaker 1: do we do because tomatoes are costing four hundred dollars.
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  Speaker 1: Well they're not, obviously four hundred dollars killo, but it
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  Speaker 1: feels like it. How do you have that conversation with
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  Speaker 1: your kids where you're talking about the money challenges but
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  Speaker 1: you're not stressing them out about money and making sure
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  Speaker 1: you know, some kids just internalize and think that they're
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  Speaker 1: not allowed to eat anymore. Such a difficult time and
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  Speaker 1: such a difficult thing to go through.
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  Speaker 2: Yeah, and I think, you know, it's very it's a
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  Speaker 2: very easy chap to fall into thinking this is just
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  Speaker 2: too hard and it's better if I just ignore it
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  Speaker 2: and not talk about it at all, because I don't
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  Speaker 2: want to stress out my kids and I don't want
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  Speaker 2: to worry them. Yeah, but I would say it's even
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  Speaker 2: more important because you know, things are changing in the household.
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  Speaker 2: It's important to give PIDs a big a sense of
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  Speaker 2: optimism around it and not to kind of turn it
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  Speaker 2: into a into you know, something that they feel is unamatgeable,
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  Speaker 2: but you know, give them a bit of agency around
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  Speaker 2: you know, tomatow's really expensive. You know, can you help me,
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  Speaker 2: like come up with the recipe where you know this
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  Speaker 2: this pumpkins are cheap at the moment, pumpkins are at
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  Speaker 2: all of fifty a kilo at the supermarket. You know, yeah,
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  Speaker 2: I say money, Like, come up with a creative recipe,
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  Speaker 2: like what can we do with pumpkins? So you know,
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  Speaker 2: it's about reassuring them that you know, you, as a parent,
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  Speaker 2: have got some things in place to help manage the situation. Yes,
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  Speaker 2: it might be a little bit tough, but try and
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  Speaker 2: get their help and like make it fun and rewarding,
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  Speaker 2: even though you know you yourself might not be feeling that.
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  Speaker 2: It's very fun a rewarding time.
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  Speaker 1: I love that I'm in Queensland and you mentioned pumpkins
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  Speaker 1: and I just got to put a shout out to
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  Speaker 1: Flow to your competers and the pumpkin SCons. That might
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  Speaker 1: be a generational joke. Yeah, I'm also thinking. So we
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  Speaker 1: did something just recently a couple of months ago with
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  Speaker 1: one of our kids for her birthday. She wanted to
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  Speaker 1: do a bake sale and it was a huge amount
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  Speaker 1: of work, but she actually made a fair bit of money.
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  Speaker 1: She really wanted to do the bake sale because she
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  Speaker 1: wanted to do some baking, but she wanted cash for
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  Speaker 1: her birthday. And we just set up a little store
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  Speaker 1: outside our house and all the neighbors came past and
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  Speaker 1: stopped and bought cupcakes and melting moments and that sort
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  Speaker 1: of stuff. She walked away with like two hundred bucks
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  Speaker 1: from a morning of bake sale, and that was profit
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  Speaker 1: after she paid us back for the flour and the
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  Speaker 1: chocolate and all the ingredients.
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  Speaker 2: I guess what's brilliant.
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  Speaker 1: I guess what I'm saying is there are creative ways
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  Speaker 1: that we can engage with our kids, have meaningful moments
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  Speaker 1: with them, but also teach them about how money works.
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  Speaker 1: And I don't know, I guess be a little bit entrepreneurial,
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  Speaker 1: have a little bit of fun with it. And even
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  Speaker 1: though most people out there are saying, yeah, this is
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  Speaker 1: really tough, we found that our neighbors were so enthusiastic
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  Speaker 1: about it that they were quite happy to part with
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  Speaker 1: four or ten dollars or whatever to buy those treats
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  Speaker 1: to take home. They thought it was great and it
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  Speaker 1: was still so much cheaper than you get at the
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  Speaker 1: local supermarket.
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  Speaker 2: That's brilliant. Yeah, and that just ties, you know, giving
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  Speaker 2: kids that sense of what time to be an agency
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  Speaker 2: and how awesome which you felt to walk away two
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  Speaker 2: hundred dollars.
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  Speaker 1: Yeah, yeah, it was. It was a lot of fun. Okay,
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  Speaker 1: that's my bragging out of the way. So when we
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  Speaker 1: have this conversation and money stuff comes up, I guess
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  Speaker 1: what I'm always interested in is can we find a
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  Speaker 1: take home message? Is there something that we can offer
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  Speaker 1: to parents that helps them to step into conversations with
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  Speaker 1: their kids about money without stressing them, or helps them
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  Speaker 1: to teach their kids to be more financially literate and
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  Speaker 1: financially capable. What's your take home message from this conversation
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  Speaker 1: and the research that you're doing and the incredible insight
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  Speaker 1: that you have into how kids are managing their money
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  Speaker 1: using the kit app.
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  Speaker 2: So I'll share maybe two things. So one is that
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  Speaker 2: you know, there's always been this tag around money and
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  Speaker 2: it's a nerve wracking experience for a lot of adults
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  Speaker 2: because you know, if you don't yourself feel like I'm
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  Speaker 2: completely on top of it. You know, I don't personally
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  Speaker 2: look at my budget every month, probably like once a
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  Speaker 2: year or something. I'm not actually pastally very good at that.
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  Speaker 2: But you don't have to, you know, be an investment
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  Speaker 2: wizard in order to be good at money. What you
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  Speaker 2: can do is be have a positive attitude about it
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  Speaker 2: and take positive steps to improve your financial capability. And
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  Speaker 2: having a positive attitude about money will rub off on
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  Speaker 2: your kids. Similarly, like, you know, some people say, oh,
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  Speaker 2: I'm just never good at maths, and you know if
• 12:24
  Speaker 2: you try and tell you, oh, you know, I wasn't
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  Speaker 2: good at maths, therefore you won't be good at maths.
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  Speaker 2: You know, that's a furfee. You know, with money, anybody
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  Speaker 2: can be good at money. You don't have to be
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  Speaker 2: a wizard, but you can always take positive steps and
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  Speaker 2: there's no shame in you know, whatever you might have
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  Speaker 2: done in the past when it comes to money. That's
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  Speaker 2: one thing, and the second one is that those indicators
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  Speaker 2: financial capability in the study that we did, there's other
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  Speaker 2: research out there that shows that the most important thing
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  Speaker 2: that you can do for kids and their financial capability
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  Speaker 2: is actually giving them autonomy and experience making their own
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  Speaker 2: decisions with money. So that means making the twenty dollars
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  Speaker 2: mistake where they blown all their Pokemon money on Pokemon
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  Speaker 2: cards and then they've missed out on the toy that
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  Speaker 2: they really wanted in a few weeks time. Because it's
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  Speaker 2: much better to make a twenty dollars mistake than a
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  Speaker 2: two thousand dollars mistake. So for some parents it's a
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  Speaker 2: little bit of a you need to let go of it,
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  Speaker 2: a little bit of control and let your kids get
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  Speaker 2: that experience with that money so that they can learn
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  Speaker 2: about the benefits of saving, how to spend smartly.
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  Speaker 1: I love this. I love it. Heykit dot com dot
• 13:24
  Speaker 1: you to find out more about the Kit mooney app.
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  Speaker 1: Haykit dot com dot you. Yeshko is the managing director
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  Speaker 1: of Kit. Thanks for joining me on the podcast.
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  Speaker 2: Thanks so much for having me Justin.
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  Speaker 1: The Happy Family's podcast is produced by Justin Rawan from
• 13:37
  Speaker 1: Bridge Media. Craig Bruce is our executive producer. For more info,
• 13:40
  Speaker 1: Heykit dot com dot you about the money stuff or
• 13:42
  Speaker 1: to make your family happier, visit us at Happy Families
• 13:45
  Speaker 1: dot com dot you