We all want our kids and grandkids to be financially savvy, right? But when we talk to them about saving and investing it’s like, why would I want to do that when I can just go out and enjoy it all now, they just want the instant gratification.
Below we are going to give you a highly valuable lesson you can teach your kids and grandkids without sounding like you are preaching to them. Set them a challenge, just do this for 30 days and then ask them what they have learnt. I’m sure it will create some great talking points.
I would argue it’s up there with one of the most important lessons when it comes to money. The same skills can be used in all aspects of your life, I also talk about how the same lesson helped me drop 13kgs in 8 weeks as part of a 8 week fitness challenge.
We now live in a society of instant gratification and the fact we are moving to a cashless society, means we think less about how we spend our money. Spend now, instant gratification, think later.
The financial world is constantly telling you that you must save on that cup of coffee each day and it will help you pay down your loan quicker. We are constantly bombarded with this information that you have most probably built up some resistance to the messaging. But what if you value that cup of coffee every day.
You wake up, prepare and get ready for the day. On your way into the office, you drop into your favourite coffee shop and order the same coffee. You have a passing conversation with the barista, thank them for the coffee as you make your way to the office.
You savour this coffee, it’s something that you actually value and your day would not be right without it. Imagine giving that up to save a few bucks and being miserable every morning, no value in that is there?
But you still have financial experts telling you to cut it back, doesn’t make any sense. They’re asking you to cut something that you value.
No different being told to create a budget, it has negative connotations and barely anyone does this anyway. By the way, I like to call them spending plans, sounds a bit more exciting doesn’t it?
Then there’s the whole smashed avocado angle, cut back on this and it will save you money. People are indulging in too much-smashed avocado.
Once again the financial industry telling you what you value and what you should cut back. It’s not right. You’re the only one who knows what you value, right?
Hang on a minute, aren’t you a financial planner your most probably saying. Yes, I am, but not one of them. I focus on what my clients value, not what society tells us we should value. It’s their life, not mine, I just help them make the right decisions so they can live the best life without no regrets.
You’ve most probably told your kids at some time that if they cut back on something they would have more invested or more to spend on the things they really get a kick out off.
So, here’s the highly valuable lesson you can teach your children and grandchildren and that is AWARENESS. Yes, it’s that simple, not creating budgets here and making your kids and grandkids suffer. Some people might also call it mindfulness, sounding a bit like a therapist now…
Now, don’t get me wrong, I’m not a new age hippie trying to teach you something spiritual here.
The basics of great money skills are in fact mostly psychological. It’s just that they don’t teach us these skills at school. To be honest it should be mandatory in the school system.
So, what do we mean by awareness?
If you’re anything like me when I go to the shops, I grab what I need, head to the counter and in most cases pay with a card. Half the time I take no notice of what it actually costs. I guess it’s like spending someone else’s money. Physically, you’re not giving anything away at that point in time. It’s not like you are handing over cold hard cash.
Some of the time this stuff ends up in the back of the cupboard never to be used.
So, here’s one of the most valuable lessons/skills you can pass onto your kids and grandkids to help them get their financial mojo going and not sound preachy.
It’s all about AWARENESS. Taking notice of what you are spending. Given we live in a world where just about everything is paid via a card, here’s how to take the extra time to be more aware.
When a purchase is made, ask for the receipt and take a few seconds to look at the receipt and just say these simple words, isn’t that interesting. That’s it, not overly complicated, is it?
This is not about saving money, but more about being more aware, taking notice of what we are actually spending our money on.
It’s not there to shame or blame yourself. It’s there as recognition tool, the end result is to be more aligned with our spending, ie spending money on the things that we value and cutting the ones we do not value. We all spend money on things we don’t value.
Think of all the stories you discuss with friends and family, they are generally experiences that stay with us for years and they create memories. That’s what we value, not the latest mercedes sitting in the driveway…. although for some this would be considered something valuable.
One of my colleagues taught me this valuable exercise that you can use with your kids and grandkids. Set it as a challenge and sit down at the end of the 30 days with your kids and grandkids and discuss what they learnt in that 30 days. I think it will surprise you.
It’s a 30-day challenge and every time they make a purchase aks them to take 3 seconds and look at the receipt and say isn’t that interesting.
Let’s say that they regularly buy lunch every day, they go into the local sandwich deli, ask for their favourite sandwich, let’s say it’s Joe’s deli. They pay for the sandwich. They walk out of the shop and stop for 3 seconds and say out loud to themselves, $11 for a sandwich at Joe’s Deli, isn’t that interesting. That’s it, that’s all they need to say.
If you wanted to take it to the extreme, they could also write them all down if they wanted to keep a record but it’s not necessary.
What you will find over the 30days is that they become more aware of how they spend money and they will find that they start to make changes to the way they spend money. Hopefully for the better.
It’s the actual AWARENESS that creates the change in our mind.
It’s not all the pieces to the financial puzzle, but it is one of the most valuable lessons you can teach them that they can apply to other aspects of their life.
For instance, I have recently completed an 8-week fitness challenge. The goal was to shape up a bit and improve my fitness, oh yeah and have clothes fit me better. I have always been a solid guy, but just a little too much extra fat, usually due to the enjoyment of the finer things in life, I love my red wine and good food.
On the odd occasion, I had tried other ways of losing weight but they didn’t work that well until I came across a group of people that had a great track record and I could relate to the program quite well.
They teach you the fundamental’s and what you find is that you are more aware of what you are eating. At times, I found myself wanting that little indulgence but found myself being more aware of what I was eating and the way it made me feel. Yes, I did enjoy the odd indulgence but don’t tell anyone.
I was more aware of how I felt afterwards and the actual work involved to get the results. To be honest, the indulgence was really an instant gratification thing, it had no long-term benefit.
So, I found myself being more aware when I was making those decisions, more often than not I would be making a better decision, ie going for the healthier option as I knew what the impact or consequences would be, the better alternative was the best choice to make. I felt better for it.
When I did make a bad choice or the odd indulgence ( and we all do it, after all, we are human) I didn’t beat myself up, I just took more notice and didn’t make as many bad choices.
It’s the same when it comes to learning how we spend our money, it’s just being that little more aware that will help with better money skills and get your kids and grandkids money mojo going.
I call it the extra 10% that can make all the difference.
Hope that helps.
PS. For those that are interested in the 8 weeks I lost 13kgs, lost 13cms around my waist and lost 9cms around the thighs ( have always had big thighs). I do feel better for it, no longer have those afternoon energy slumps and feeling much fitter. The program actually continues for another 4 weeks to help implement the new skills.
I’m thinking of writing a post about this. If you are interested in me writing a post about this feel free to hit me back on email with “Interested in hearing about the experience” and if there is enough interest I will write a post about it.
If you feel someone would benefit from the information contained in this blog, do them a favour and feel free to send it on.
Make it a Great Life!
Glenn Doherty – CFP – Founder & Financial Organiser at Jigsaw Private Wealth
Advice Disclaimer: Any reference in this publication to the provision of advice refers to advice of a generic nature, and should not be taken as product or investment recommendations. Before any action is taken based on the information provided, independent financial advice from a licensed financial adviser should be sought. Glenn Doherty and Jigsaw Wealth Pty Ltd are Authorised Representative of Exelsuper Advice Pty Ltd, ACN 080 419 745, AFSL 428272. The information contained in this publication is of a factual nature only and is not intended to constitute financial product advice. Information is current as at April 2018. This is an online information blog. It does not imply an offering of securities.