PARENTS have been warned by the Barefoot Investor “if your kid is normal they are not prepared” to make good financial decisions and will fall into debt the minute they leave home.
The best parents can do for them is help them become smart with money – and start young.
In his new book, The Barefoot Investor for Families: The only kids’ guide you’ll ever need, he sends a stern message to parents that they need to prepare their children for financial literacy from a young age or risk seeing them sink straight into debt.
“The bottom line is this: as a parent, the days are long, but the years are quick,” he says in the book.
“And you only have a very short time frame to influence your kids.”
Pape says the new normal is to end up with “200 in credit card debt”, but it doesn’t need to be that way.
Pape is arguably Australia’s most influential money expert and in his new book he’s hoping parents can help put their kids in the best financial position before they leave the family home.
“Will your kids leave the financial confidence and the street smarts to seize the opportunities the world has to offer them?” he writes.
“Well, the reality is that young people aged between 18 and 24 have the lowest levels of financial literacy of any age group, according to ASIC research.”
Pape’s bestseller, The Barefoot Investor, has sold more than 1.2 million copies across print, ebooks and audio books.
His new book has already resulted in huge interest from readers rushing to pre-order copies.
So far there has been more than 54,000 pre-orders of the book which is due out soon.
It includes helping children set up fee-free bank accounts, learning how to sell second-hand items around the home and saving parents 00 on their household bills.
Parents are also being urged to complete an 18-question survey about how they deal with money and their children.
Pape is hoping parents take notice of his suggestions to make their kids financially savvy and not be “normal”.
“Normal is accepting the bank’s offer for an increased credit card limit … Oh, okay, sure, and a loan for a new car,” he writes.
“Normal is working on a job they’ve outgrown so they can continue making repayments on stuff they regret buying.”
Latest Reserve Bank of Australia data shows the nation’s credit card is a whopping 1.6 billion and more than 2.6 billion is accruing interest.
Tribeca Financial’s chief executive officer Ryan Watson said parents teaching kids “sound financial habits is a must”.
“A kid who is taught strong and structured financial habits from a young age will be put on the path to strong financial wellbeing as an adult,” he said.
“Given we now basically live in a cashless economy, now more than ever it is imperative that parents teach their kids good financial habits around the tangible value of money.”