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Book Review #6 The Barefoot Investor for Families by Scott Pape

Guest Blog from Lisa Ryan

I would never have picked this book up if it hadn’t featured on the Chooks SA list, and I am so glad that I did!

I thought it would be either evangelising me on a particular way of teaching the kids about money or deathly dull. As the only person in our household of four with any practical interest in how the money’s organised, I couldn’t imagine getting everyone else interested.

It turns out that it IS possible, and it’s actually even been fun.

The book breaks down building financial literacy in kids (from little kids to teens) into a series of ten family dinners. Along the way it tackles some of the vexed issues of parenthood – pocket money, how the heck will my kids ever afford a house, what’s the best way to contribute to their financial security in the medium term – and provides practical and easy tips for both communicating with kids about these issues AND advice on which bank accounts to set up etc . He even gives you activities and some prompts for the family dinner conversation.

His contention is that it’s really about the values you want to instill in your kids around money and work, and he places a real emphasis on creating shared family stories about those things. He references just enough of the wider research into parenting and financial literacy to show that there’s an evidence base for his approach, without ever making it theoretical.

On the pocket money question, he argues for tackling it as simply as possible - get them to do 3 jobs per week, only give them pocket money for the jobs they do; the money goes into jam jars called splurge (immediate spending), smile (saving for something bigger that they really want), and give (charity/donation). It was a relief to have such a clear strategy laid out, and with a good rationale behind it, instead of my half-hearted, on-off attempts to bring some link between activity and reward. It’s also helped us to be clearer about what’s just expected as part of being a family, and what is a job that brings in money.

The bulk of the book is devoted to the so-called Barefoot Ten – the ten things he reckons every kid should know before they leave home. Topics tackled here include: opening a zero-fee, high-interest savings account, setting up superannuation, setting up a savings/investment account for a home deposit, volunteering, saving money on household bills, and learning to cook “at least two low-cost, delicious, nutritious meals from scratch”.

This book came at just the right time for me. My kids are 8 year old twins and we’ve just survived the avalanche of gift-giving that is Christmas, followed immediately by Avalanche 2 (AKA their birthday). Never a better time to ask the big parenting questions about money! How do we help them appreciate what they have? How do we steer them between splurging and saving? How do we shift it from “mum buys us stuff” to them experimenting with making their own decisions about money. And ultimately, how do they grow up to be more financial literate than we are?

I found it easy to read (I cheerfully read it while camping up the coast) and have found it surprisingly easy to put it all into action without too great a cost (financial, emotional or time-wise). The ten weekly dinners step it out nicely so that week by week (or month by month) you tackle some of the gnarly questions without ever feeling, in Pape’s words, “guilt or overwhelm”.

My kids have taken to it like ducks to water. They don’t mind the idea of three jobs linked to pay and they quite enjoy the family dinners conversations about money, which are designed to be both fun and informative. They particularly enjoyed topics like – “what did your Mums learn about money when they were growing up?” “what big things have your Mums spent money on and regretted?” and “what is one big purchase that would make our family happier?” And our son – a child with great skill in being in the moment and limited interest in planning – has developed a sudden passion for saving for an iPad. He seems very relaxed about it being a two-year saving goal (and it will take another 2 years before I let another screen into the house!)

The book is what it is. It doesn’t raise questions about how wealth is distributed (though he does strongly criticise the banking industry), but rather aims to help individual families navigate their way through the status quo. And I suspect he pictures his audience as being made up of people quite like himself, and their families as being quite like his family (white, heterosexual and middle class). Having said that, he does explicitly address the needs of single parent families in a number of sections of the book, and he seems particularly tuned into the particular challenges faced by single parents.

All that said, it’s a helpful guide for starting a conversation with kids about money and their financial future that is both values-based and practical, and occasionally even fun.

This year's book list was curated by Angela Berney who is the coordinator of the Woodcroft Library for the City of Onkaparinga.

This review was done by Lisa Ryan, a mum of 8 year old twins, and is on the team of Adaptive Leadership Australia, where she brings her skills in facilitation and changemaking to complex social and organisational issues.

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