Fortune cookies are great conversation starters. I had a brainwave recently and decided to cook up a batch of the traditional Chinese treats and fill them with various financial talking points for families.
Discussing dosh with children of any age can help them become responsible money managers later in life.
Our "fortunes" were aimed at tweens. But the same idea can work with younger children and especially teens who by now probably have some money of their own and dream of independence. Beware, however, that preaching doesn't work. Getting them to think through the issues with some guidance and come up with their own conclusions is much more likely to sink in.
Anyone who wants to repeat my exercise can find the recipe at foodhub.co.nz/fortunecookie. If you're looking for conversation starters to get the kids thinking about money, then type up some of these headlines and wrap them in your cookies:
How do you want to spend your birthday money?
Look at ways that could make the money go further. If, for example they want to buy iTunes cards, discuss the fact that there are sometimes sales and if they wait they might get a $30 card for $20. Don't forget to follow this with "or do you want to save it"? At some point your offspring are going to have to figure out that money isn't just for spending the moment they get their sticky fingers on it. Even if there is not a birthday coming up, ask what they most desire at the moment. Bring up the spectre of something they bought in the past but no longer use. Was it a sensible use of money? That's getting them to reflect on past purchases.
How much will it cost you to live when you're at university?
This conversation can start as early as years 9-11. It's about planting a seed in your tween or teen's mind. Most offspring think until they leave home that money grows on trees. Mum (or Dad) buys the food, which appears on the table miraculously, and thoughts of turning lights off to reduce the electricity spend have probably never entered their minds. Electricity is just something that happens. This is the time to whip out a basic budgeting worksheet for students and list all of their costs. There is a printable one on the Sorted website, which can be found here: tinyurl.com/printablebudget .
What are five to 10 things you could do to save for your iPad/BMX bike/grad dance dress/mag wheels?
Children of all ages can raise quite a lot of money if they put their minds to the task. They sometimes just need some ideas. This is the time to speak of good old-fashioned money-making ideas. Teens can still deliver newspapers, walk dogs, do babysitting, wash cars or windows and do odd jobs in the neighbourhood. Even better is getting them to think of a micro business idea that involves employing their friends. A great money-making ploy for kids I discovered when my children had to raise money for jamborees is selling the family's junk on Trade Me. My kids used their iPods to photograph and list their stuff for sale. Most kids have toys or clothes they've grown out of that could be sold at a few dollars a time. This is also a good conversation-starter for the issue of "not buying it" in order to add to the savings pot. That could be not buying an iTunes voucher, a Girl Power magazine, a fizzy drink at the tuck shop, and so on.
How many hours do your parents have to work to pay for a $5000 holiday to the Gold Coast?
Chances are the kids don't have a clue what it costs to go on holiday to Surfers Paradise, Fiji, or even Mangawhai. The trouble with talking to kids about what you earn is that no matter how little it is, the sum will still seem like a king's ransom to someone who gets a measly $10 or $20 a week in pocket money or allowance. Better to talk about the number of days or weeks you have to work just to pay for the family holiday or some other expense that the kids yearn for - even if it's only a dinner at Lone Star or a trip up the Sky Tower.
What are your dreams and how are you going to pay for them?
Does your child want to own a Ferrari? Or do they dream of backpacking around the world for a year? Again this is an opportunity to look at financial issues surrounding their dreams. It may be the cost of activities to develop their talents or how to fund round-the-world airfares plus accommodation for a year. If they can start to put a dollar figure on their dreams it will help make them come true - or at least enable them to dream of something more realistic.
Do you make more money from a job or owning a business?
There is no perfect answer to this question. Children are never too young to learn about passive income. Someone with a business that employs others earns money even when they're sleeping. But don't make owning a business sound too easy or they might be bitterly disappointed. This question is also a good starter for a discussion about the differences between well-paying and low-paid jobs and to investigate the concept of the career ladder.
How would our family survive financially if Mum and/or Dad lost their jobs?
Take a look at what the dole or DPB pays and line this up against expenses for your household. That can be an eye-opener for teens. Government benefits may not even be enough to pay the mortgage. Would public transport to school, phone credit and tuck shop lunches be affordable anymore? This is a time to discuss the need for building up a safety net as soon as they start work - even if it's only in the holidays.
What should parents buy children and what should they save up for?
In my neighbourhood where kids are allowed to take iPads and tablets to school my estimate is that half the kids have paid for their own and the other half were given them on a platter. Tweens and teens have opinions about this. They know who the spoilt kids are and they don't necessarily like them for it - although that can open a whole new can of financial worms. Envying others can develop a cup-half-empty attitude and needs to be nipped in the bud.
If you could manage the family budget for a week, what changes would you make?
This is a chance to look at the trade-offs that you need to make to run a household. No doubt they'd want you to spend money on XY or Z. Go through the budget and get them to come up with ideas of where you could get that money from. That could help turn a light on in your teen's head about money being a limited resource, even once they work.
Should teenagers pay rent once they start working?
Here's one that divides people. Some feel strongly that teenagers should pay their way if they're living at home. Others believe free board gives them a leg-up in life. They say it's a chance to save money before they hit the big wide world. Personally I'm in favour of them paying rent - albeit at a low rate - in order to learn the cost of living, the art of budgeting and hopefully some financial responsibility. Unless your teens have older siblings, they've probably never thought about contributing financially to the household. Find out what they believe you should do.
How much did you spend today/this week on unnecessary items?
This is a great way to bring up the conversation of wants and needs and how that energy drink a day adds up to thousands of dollars over a few short years. Children do understand the concept of wants and needs. My kids have started having conversations about this off their own bat.