If you want to avoid raising a spoilt brat there are some key things you can do, says author Scott Pape. Photo / Getty Images
If you want to avoid raising a spoilt brat there are some key things you can do, says author Scott Pape. Photo / Getty Images
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With interest rates on the up and Christmas spending under way, many Kiwi parents will be feeling the pinch of the cost-of-living crisis more than ever. But how many of us have discussed these challenges and how we’re managing our money with our kids?
For most, balancing the household books is a conversation reserved for adults. But for Scott Pape, father of four and author of sell-out book, The Barefoot Investor, understanding money is one of the most important things we can teach our children.
“Money is the one thing that every kid is going to be tested on, every day of their lives,” says Pape. And to that point he’s written a new book about money, specifically for children: Barefoot Kids: Your Epic Money Adventure.
On this week’s episode of One Day You’ll Thank Me, Pape shares his tips for raising financially literate kids and, in doing so, avoiding them falling into the dreaded category of “spoilt brat”.
Scott Pape, the author of hit book The Barefoot Investor, has written a new book about finance for kids. Photos / Supplied
Firstly, he says money is often thought of as maths. But Pape argues it should be seen as more of a language.
" … if you don’t speak that language at school, if you don’t speak that language at home, it’s very tough. We, as a society think, ‘oh, okay, by the time you’re 18 you magically start talking, you know, understanding this language’. But that’s not the case.”
For most kids, the first taste of managing money comes in the form of pocket money.
Pape says it provides important lessons that help ensure kids aren’t being raised expecting everything will just be handed to them.
Firstly, he says it’s key to instill the notion that money comes from working.
In Pape’s household, that means chores in addition to normal family jobs that don’t count as money makers.
“My kids do not get paid to make their bed, to take their smelly socks and jocks into the laundry basket or to do the dishes or set the table, in the same way that I don’t get paid to put very average spaghetti bolognese on the kitchen table.
“We are a family. Not everything is a transaction,” he says.
There’s also a key lesson to be learned from the way your child spends their pocket money, says Pape, who’s set up three jars for his children to deposit their hard-earned coins into.
“Every jar gets at least some money when payday comes. One of those jars is for giving. And that giving jar is all about creating a habit or a belief in giving with your kids.
“Kids are narcissistic ... it’s all about them when they’re little. But what you want to try and do every time they get paid is just to shave off a little bit of money and say, ‘What can we do for somebody else?’ Whether it be buying Gran some flowers ... helping out a food bank in your local area, or donating.
“If you do that week in, week out with your kids, as they’re in primary school, they’re going to start to understand the power of giving. And as we all know, the happiest people are the people that give. So, for me, it’s about those behaviours we want to build in kids.”
Pape says if parents can build up the notions that “we work hard in our family and we give money to the community around us, those are the beliefs that mean that you’re not going to bring up spoilt brats - but hopefully they’re not going be living with you when they’re in their 40s either.”
For more of Scott Pape’s advice on teaching kids about money plus his tips for making your budget stretch a bit further this Christmas, listen to this week’s episode of One Day You’ll Thank Me below.
