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Kids & Money

Discussion in 'Investor Psychology' started by skater, 6th Nov, 2015.

  1. skater

    skater Capitalist Premium Member

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    I've been requested by @neK to write about bringing up our kids, as per the below post. I'll try to be as honest as I can on what we did, while keeping the personal details out, as I'm sure that if either of my children want to make their current situations public, they are perfectly capable of doing so themselves.
    Well, as most of you know, we have two adult children. When they were young, we opened a Roller Skating Rink, and they ended up, due to our situation, working along side us from the ages of 8 and 10. When we closed the doors, they were 10 and 12. They both worked very hard, and we paid them both the equivalent of the junior wages at the time, however half of this amount was taken off of them each week, and deposited into an account that they were not allowed to touch.

    This was a hard time for the whole family, but both of the kids learnt and grew a lot through those years, and were more efficient and reliable than any of our other staff that were much older than either of them.

    When we closed the doors, both of the kids had a nice little start in their accounts and were used to having money to spend. During those years, we were heavy readers of Rich Dad Poor Dad type books, and every time the kids wanted something, we'd ask them if it was a want or a need.

    Later, when we moved to Sydney, we paid for all our children's needs, but insisted that they work towards their wants themselves, and gave them opportunities to earn income around the house. I'm told these days that I was too stingy in my payments.....but we weren't earning a lot of money, AND we were paying a very large amount each week for sport, and did the best we could with the available funds and I was often caught saying something like "you don't NEED another skirt, you WANT another skirt". They only received presents at Christmas & Birthdays.

    At 13 the eldest started work at a local Pizza joint, then got another job at Go-Lo, the youngest worked at Macca's at 14. I'm a big supporter of getting them out in the work force, and learning first hand the value of money. Now, it was very hard for both of them at this age, because based on where we were living, most of their friends were receiving Youth Allowance, and were allowed to blow the lot any way they wanted. Our kids didn't get Youth Allowance, and the only way they could get an income was to work for it, and then mean Mother insisted that half go back into that bank account that they weren't allowed to touch.

    One of them fought me constantly on this, the other did not. In fact the other one would add extra money into her account, and I remember very clearly the first time the penny really dropped about my constantly telling them that small amounts add up over time. A friend of one of the children also worked at the same place, and she used to give all her pay to her mother each week to help pay for 'stuff'. One day, as I was waiting for my child to finish work, the mother of the other child was also waiting. She was telling me a sob story about how something was wrong with the car, & she couldn't afford the $500 to fix it. I related that story to my child, without divulging that it was her friend & her mother I was talking about, changing a few details but reinforcing what she was now starting to realise, that she already was a lot more wealthy than some adults.

    Anyway...that's it in a nutshell really. Learn the difference between wants & needs. Learn to budget & pay for your wants (it's funny how many wants, aren't that wanted when THEY have to pay for them). Pay your own way. Work! Save! And just generally be open & talk to them. It's the budgeting that is very useful, and one of them worked out that they could be the dedicated driver to events, thus not having to pay for alcohol (expensive) and the plus was that friends would volunteer funds for fuel.

    Oh, and just for laughs.....this child was an entrepreneur in the making. One child about age 5 or 6 asks me for an ice-cream cone one day, standing outside of Wendy's. I give them $2 and they ask could they keep the change. I said yes, it was $1.95, and she promptly went to Maccas for a 30c cone. So, then it became the norm to ask for an ice-cream, and could they keep the change. Answer yes, and they'd go to Macca's, answer no, and they'd go to Wendy's. So, I guess the apple doesn't fall far from the tree.

    At age 18 they both had access to their money, and both of them had some serious dollars saved by that time.
     
  2. neK

    neK Well-Known Member

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    @skater Thank you for taking the time to post this :)

    Got a light bulb moment after reading this :)
    Now to figure out to do this with a child that's under 2 (more so curbing certain habits now before they become harder to undo later) :D
     
  3. Perthguy

    Perthguy Well-Known Member

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    Good on ya @skater. I got my first job when I was 15, so I know what it is like to work when very young. It was good! It kept me out of trouble after school :)
     
  4. skater

    skater Capitalist Premium Member

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    Good luck with a toddler. Maybe working on delayed gratification? You can have one now, or two in 10 minutes?

    BTW...the same child who asked for ice-cream said that she wanted her own business when she grew up. When we asked her what her business would be, she said that she wanted a 'Knife & Fork Shop", because she hadn't seen any in the shopping centres and "people use them all the time, Mummy". At the time she was still in pre-school.
     
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  5. JenW

    JenW Well-Known Member

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    I love this... identify something that is indispensable, and supply it. Your pre-schooler had the right idea :D
     
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  6. Perthguy

    Perthguy Well-Known Member

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    [​IMG]

    She wasn't too far off by the sounds of it. Maybe she should have trained to become a Futurist.
     
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  7. skater

    skater Capitalist Premium Member

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    Yes, I remember seeing this store & thinking "Wow! They've been talking to my kid!"
     
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  8. aussieshorter

    aussieshorter Well-Known Member

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    I have a one year old at home, so this topic is one that I'm really interested in and over the coming years will become really important.

    I found the below ideas on another forum so can't take credit. There are a couple of tweaks I'd make, and it may be overcomplicating things, but I think it gives a roadmap to teaching kids a lot of important principles.

     
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  9. legallyblonde

    legallyblonde Well-Known Member

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    My mum had a great trick with pocket money... We got $5 each week for doing a certain list of chores.. The only issue was that she would not remember to give it to us... + Their was a rule about reminding her about pocket money that involved forfeiting any entitlements if we did remind her...
     
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  10. York

    York Finance Broker Business Member

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    I too grew up with a father that was quite firm about what money was to to be used for. He wasn't tight, but didn't like throwing money on useless things and wanted to teach his children about the value of money.

    I started helping out in the family business at age 8. Many weekends and many school holidays. Money was put aside for me reflecting the effort I was putting in. I was able to take a small portion of it to school for the canteen etc, but the majority was put aside.

    When I was about 14 I asked my father when I could spend the money I was earning. His reply was - 'Anytime you want. If you want it now, I'll give it to you!' My face lit up with joy thinking of all the wonderful things I could spend it on. Then he continued 'or if you leave the money in the bank, every dollar you have and every dollar you earn from now i'll double it until you turn 18. Then you can have it to do what you wish'.

    Although I was young and wanted the money, logic told me I could double my money and in about 4 years I would get it all.

    By the time I was 18 I had a very respectable amount saved. But more importantly I understood the value of money by having earnt it.The fact that he doubled it served to encourage me to continue saving and it worked.

    Seven years later , I had 40% deposit for my first property. A great lesson learnt early on in life and one that has shaped me as an prudent investor today.
     
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  11. Joshwaaaa

    Joshwaaaa Well-Known Member

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    My 3 nearly 4 year old has $160 in his money box, 2 years of collecting any loose change he finds around the house (and a couple small additions from me when he wasnt looking) , he tells me he's going to buy a motorbike with it.
     
  12. JacM

    JacM VIC Buyer's Agent Business Member

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    @skater you should write an ebook and flog it on Amazon. Instruct the folks in our great nation how to raise their kids properly. I am concerned how messed up things have gotten. The age of entitlement. You could put humans back on the right path !
     
  13. JacM

    JacM VIC Buyer's Agent Business Member

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    On the topic of ideas, I recall once having a whinge in a petrol station on a major freeway "Why can't I just buy two panadols? I don't want a whole packet, I only have one headache". I thought my comments were quite logical. So did the boss of whomever makes Panadol and hygiene products that was probably in that same petrol station listening to me whine. What a dream idea they'd have thought. Don't need a new product, just new packaging. I kid you not, within three months, there was mini everything available for purchase. Single serve Panadol. Mini shampoo and conditioners. Mini deodorants. And the list goes on. Obviously you cannot copyright or patent the concept of selling things in singe serve, but I still grumbled a bit that the majors are profiteering off my idea hehe.
     
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  14. Mooze

    Mooze Well-Known Member

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    Interesting reading.


    Due to a pregnancy requiring csection I had to figure out a way to get our 2year old to voluntarily stay still during nappy changes - after trying a variety of options found the only thing that would work was a 20c to put in his money box. Any loose change around the house doesn't last more than a few minutes before being swooped on
     
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  15. Travelbug

    Travelbug Well-Known Member

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  16. Joshwaaaa

    Joshwaaaa Well-Known Member

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    Oh crap, I watch too much tv, hate going to work and haven't read a book since I left school. I'm screwed.
     
  17. moridog

    moridog Well-Known Member

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    I'm really glad to read this Skater. 14 year old has done some babysitting locally, must hand over half of any earnings, several hundred in the bank and she is oblivious to it. We have started trying to get a part time job, got a knock back from Maccas(?!) no response from Coles or Woolies and an interview with a large coffee shop last Sunday. I actually thought she would have one by now, oh well, better redouble our efforts I think. Thank you.
     
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  18. hozi

    hozi Member

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    Great read @skater
    I have 2 kids. We have 2 bank accounts for them each. They put spending money in the one account and savings for their future education in the other (Which my son says will be his investing money account!!!!) . Every time they want to spend I ask them the same. Do you want or need and also double the amount if they put any extra in. Specially when they get money as presents.

    They also have what we call a giving box where they put in whatever amount they like. Whenever donations are required, money comes out of this box

    They have been doing this since my eldest was 4 years old.

    My daughter is also looking for work but has had no luck. She keeps handing out her resume regularly. Some places she has gone back after 3 weeks and handed them out again. She also makes hand made cards and sells them.
     
  19. Bayview

    Bayview Well-Known Member

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    I found a transaction slip on the ground under my local ATM a few days ago (the frickin bin is only 3 metres away :mad::mad::mad:), and I picked it up to throw it in the bin....had a quick squizz at the balance...

    My 6 year old son has a bigger balance on his Bendigo Bank school savings account than the owner of that discarded slip...:eek:

    Might explain why the a-hole threw it on the ground?
     
  20. York

    York Finance Broker Business Member

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    We regularly find slips at the counter where i work. I often check them as I'm throwing them away just to see whay the average person has in their account. I often see amounts in the hundreds. Sometimes above couple thousand. Very very few times above 10k.
    Not saying it means anything. It may just be one account of many. But the ones with only a few hundred are a bit of a concern.