kids

The Barefoot Investor has an important message for every parent of a teenager.

Teaching your teenaged kids about financial independence should be done sooner, rather than later, according to best-selling finance author Scott Pape – also known as The Barefoot Investor.

“No teenager in their right mind – no matter how studious they are – wants to become financially literate,” Pape told Mamamia. But this doesn’t mean parents shouldn’t try to teach them.

In fact, the author insists that once they reach the age of 15, parents should force teens into a job.

Pape is is adamant that working is the only way teenagers can grow to truly appreciate money – even if part-time jobs generally come at the cost of parents’ time and energy, as working odd hours in places such as fast food restaurants, generally means transport becomes their responsibility. But the pay off is significant, as kids can learn first-hand about financial fundamentals such as budgeting and superannuation.

“No matter what school they’re at, you are not getting a great education if your teenager isn’t flipping burgers somewhere for the minimum wage,” said Pape.

Which is why Pape believes in ‘The school of hard knocks’ as an integral part of a child’s education. He explained that financial entitlement breeds financial laziness, which doesn’t bode well for the inevitable time when the ‘bank of mum and dad’ closes its doors.

Pape naturally isn’t advocating full-time work, but just enough hours so that the basic principles of money can be instilled.

“It’s not about the money, it’s about learning the value of a buck,” he said.

There comes a time in every kid's life when they have to graduate from the lemonade stand. Source: Getty.
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Pape believes that teaching kids how to manage money when the stakes are low will set the up for sound financial practices when they're adults, and potentially need to provide for their own families.

“They will make mistakes and that’s good. You want them to make mistakes when they are 15, not 35. It’s a really wonderful way for young people, still in the safe confines of the family home, to get a dose of the real world.”

Pape believes that another important way parents can educate their kids about money is by not doing one thing in particular: buying them a car.

He told Mamamia last year: “My secret source in financial education and for raising a strong, confident adults is to focus on hormones. And the hormones don’t get any more excited than by the prospect of having an ultimate freedom machine.

"How well adjusted is that child going to be if they get a brand new car given to them by mum or dad? I don’t care how rich you are. If you buy your child a brand new car for their 18th birthday you’re an idiot.”

As a dad himself, Pape appreciates that parents want their children to be safe behind the wheel. But he argues that when a child is gifted a brand new car straight off the showroom floor, they’re not only receiving the wrong message, they’re missing out on a huge opportunity to learn life-long skills around money management.

“You’ve got three years or so between the age they can get a job and when they can get a car to actually work on that plan. And it can be really powerful.”