Kids and Finance: What do you teach them?

I'm pretty hopeless with money and I always have been. And despite claiming the sensible high ground, Susie's not much chop at balancing the weekly budget either. So after years of trying to tell the difference between a spread sheet and a bed sheet, we decided we'd try and teach the girls the mystical ways of macro and micro finance to prepare them for their adult years.

I was forced into thinking about the girls and finance the other week while manning the barbecue for the kinder's annual Easter sausage sizzle. I found myself paired up with Paul who, without any prompting, listed his life interests as horse racing, horse racing and finance. As I have less interest in horse racing than I do in finance we spent our time over the hot plate talking numbers while Paul's trannie kept us up to date with all things equine. It was a short conversation. "You know what a self-amortising loan is don't you?" Paul started off. "Is that a loan that loves itself?" I guessed. Thankfully Paul took the cue to dumb things down. In between the third at Randwick and fourth at Caulfield, Paul outlined some sensible advice to make kids fiscally astute in their adult years.

Later that night I talked about Paul's economic advice with Susie. Susie thought it was a good idea to introduce the girls to the concept of saving early. Susie also liked Paul's idea of having the girls open a bank account and having a small part of my wage deposited into the account. Susie was less excited about Paul's sage words on women, which boiled down to pretending to agree with everything they say, then doing your own thing anyway. From the rest of my conversation with Paul I worked out his own wife was also not so keen on this strategy.

The next day I loaded Maisie, Frances and new daughter Rita into the pram and wheeled them up to the local bank. Maisie brought with her a tin that contained half a dozen hair clips, a Spotlight VIP Club card and a few coins that represented her entire life savings. While Frances performed an erratic dance for the long queue of patrons, Maisie and I talked to a lovely woman called Sue who ran us through a variety of options. Did Maisie value higher interest over flexibility? Did Maisie prefer transacting in person or by the internet? Did Maisie anticipate maintaining a balance over $100,000 for the life of the account? The only response to all of these questions came from Frances who stood on Sue's desk and told us that Rita had done a poo.

Once it was clearly explained to me that simple kid's accounts had gone the way of personable bank managers and regional branches, I picked an account with the least onerous fee schedule. Maisie, after some initial protests, finally agreed to hand over her collection of coins in exchange for a Winnie-the-Pooh stamp. Watching Maisie reluctantly hand over her tin of coins for the promise of a stamp reminded me of that scene in Mary Poppins where the dad is trying to convince the kids of the joys of saving while all the kids want to do is buy some seeds to feed the birds. Suddenly I felt Mary Poppins competing with Paul the finance guy - one telling me to let the kids enjoy today and let the future take care of itself, the other telling me that a small sacrifice today will lead to greater rewards tomorrow.

Once it was clearly explained to me that simple kid’s accounts had gone the way of personable bank managers and regional branches, I picked an account with the least onerous fee schedule.

Is it wrong to try and burden kids with the concept of financial responsibility, or is it wrong not to provide a good financial base for your kids? Is it something better left to the free market to decide?

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