HOW YOUR TEENS CAN CUT BILLS
IN this edited extract from his new book The Barefoot Investor For Families, Scott Pape explains how your kids can help you save money, earn it for themselves and build their financial confidence.
THE LAZY $100 CHALLENGE
IMAGINE that I’m standing right in front of you.
I’m fanning your face with a bunch of $50 notes.
And you’re wondering why I’m treating you like some exotic dancer, when I lean over and whisper to you:
“If you spend 45 minutes on the internet with me, I’ll give you $540. Nothing kinky.”
And if you’re a dinky-di Aussie you’ll say ... “nah”.
That’s because it’s very unAustralian to be smart with your money.
Aussies pay a staggering $11.6 billion in ‘lazy tax’ each year by not shopping around for better deals on household expenses, according to a 2016 study by the Queensland University of Technology.
The research found that, while 50 per cent of Aussies had seriously considered switching providers, less than 25 per cent actually did something about it.
In this chapter I’m going to help you save thousands of dollars a year without you having to lift a pinky. Even better, at the same time you’ll be teaching your teens lifelong lessons that will boost their confidence.
THAT WINNING FEELING
MANAGING your money is all about confidence.
So in my last book I intentionally built up people’s financial confidence by showing them how to score quick, valuable wins.
I want your kids to have that winning feeling before they leave home. In fact, I want them to have those wins again and again, so it becomes part of their identity.
And like all good brainwashing, you can start it at a very young age.
Little kids: “Turn off the lights!”
According to Choice, each year Australians spend
$1.2 billion more than they should on power, and, despite the fact that most of our country is a giant quarry, we have some of the highest power bills on the planet.
Now, little kids don’t really get the concept of negotiating a cheaper deal – but it’s never too early to start teaching them the importance of saving money.
And if there’s anything little kids love, it’s to get one up on their parents (and older siblings).
So we’re going to give them a responsibility they’ll love: they can become the “light monitor”.
Basically, it’s their job to walk around and turn off the lights when they’re not in use.
Yes, it saves you money ... but it also teaches your kids a few important lessons: that electricity isn’t free, that saving money is important, and that they’re expected to contribute to the effort (oh, and it’s good for the planet).
And if you want, this can be one of the jobs that your kids earn pocket money for.
TWEENS: THE PETROL PRICE GAME
MY family and I live in the country, so we spend a lot of time in the car. So I created the petrol price game, where the kids are always on the lookout to find the cheapest petrol prices. If you have tweens, you can put it into place right away.
After all, it works for you, because you score cheap petrol.
And it works for the kids, because they’ll understand that prices are constantly changing, and that the way to save money is by buying up when prices are low. And it trains them to always be on the lookout for lower prices. Plus it’s fun!
The rules are simple: whoever can find the cheapest petrol scores something yummy (subject to Mum’s discretion) when you fill up.
TEENS: THE LAZY $100 CHALLENGE
Now let’s set a spark to the flame.
The guts of this chapter, and this Barefoot Ten challenge, is for your teen to ... “save you at least $100 on your household bills by negotiating a better deal”.
Here’s how we’re going to do it. You’re going to be lazy each time you get any of the following bills:
• Electricity
• Gas
• Phone and internet
• Car and home insurance How? You’re simply going to hand it to your teen, and challenge them to negotiate you a better deal.
Step 1: Whet their appetite The average household is paying thousands of dollars in “lazy tax”.
Which means nothing to your teen ... until you give them a good reason to get interested: you’ll pay them a commission for every dollar they can save you!
You could decide to split
the bounty down the middle – so if they can save you $500 a year on your power bill (the average saving if you switch, according to the Australian Energy Market Commission), they’ll earn $250.
Put that in terms that your teen can understand: they could earn more in half an hour of searching on Google than they could in a month of flipping burgers.
How’s that for motivation? Step 2: Print out your bill Circle your account number, the bill amount and the time period. Then write down how long you’ve been a loyal customer (guesstimate if you have to).
Step 3: Get them to do some quick research
Give the bill to your teen and have them do a quick search online to find a cheaper deal.
I’d start with your electricity bill, because there can be some good savings there.
Can you switch your electricity retailer? If not, you may still be able to save on your gas bill instead. But it’s not as straightforward as you’d think. So, when it comes to electricity research, direct your teen to the Government website Energy Made Easy (energymadeeasy.gov.au).
After punching in the basic details (gleaned from the bill), your teen will be presented with a list of offers – up to three at the same time. Once they’ve found a good offer, they can read and print an energy price fact sheet from the Energy Made Easy website summarising the key points. Step 4: Celebrate! When I did this switch a while ago myself, I saved $500 a year.
Your teenager may be able to save more, or perhaps less. Either way, it’s a good deal for you, and a total money spinner for them if you’re paying them a commission (up to half).
The purpose of this activity is to build your kid’s confidence. Feel free to humblebrag to your friends about how much money your “bill-buster” saved you on power (and make sure your teen’s within earshot when you do).
Finally, each time a bill comes in you should give your teen a chance to flex their negotiating muscles. In fact, if you’ve done it right they’ll be salivating at your mailbox, waiting for the next opportunity!