Money Talks: How to Raise Financially Confident Kids With Dawn Thomas

What's the best thing you can do for your child's financial future and where do you even begin?

In this episode of Get Rich, Molly sits down with financial advisor and LFC favourite Dawn Thomas to get into one of the most important (and most underrated) conversations we can have as parents: how to raise a financially confident kid. And yes, she does it while breastfeeding a newborn, because that's just the season of life we're in right now.

Whether you've been wondering how to talk to your kids about money without passing on your own stress, or you're not sure how to explain investing to a teenager, this episode is packed with practical, real-talk advice straight from a mum who also happens to be a financial advisor.

In this episode, you'll learn:

• Why your money behaviours matter more than any lesson you'll ever teach
• The exact phrases to swap out when your kid asks for something you don't want to buy
• How to talk to your children about cost-of-living pressure without creating money anxiety
• Why delayed gratification is one of the greatest financial gifts you can give your kids
• The tax traps Australian parents hit when investing in their child's name
• Why investment bonds and education bonds can be a smarter option than a kids' share account
• Why letting your kids experience financial "failure" is actually a good thing
• What family financial socialisation is and why it starts earlier than you think

Perfect for: Australian mums with kids of any age, women who want to break generational money cycles, and anyone who's ever said "we can't afford that" and wondered if there's a better way.

The biggest takeaway from this episode? You don't need to be a financial expert to raise a money-smart kid, you just need to start the conversation. 🎧

CHAPTERS

00:00 — Introduction: Raising Financially Confident Kids in Australia
00:41 — What Financially Confident Kids Have in Common: Family Financial Socialisation Explained
01:28 — How to Improve Your Own Money Mindset First
02:05 — The Money Mistakes Parents Make Without Realising
02:40 — Why "We Can't Afford That" Is Damaging Your Kids' Money Mindset
03:44 — How to Talk to Kids About Money: Phrase Swaps That Actually Work
05:43 — Teaching Kids Delayed Gratification and Saving Goals
06:02 — Raising Kids in a Cashless, Buy Now Pay Later World
06:46 — How to Set Up a Bank Account for Your Kids in Australia
08:21 — Are Savers and Spenders Born or Made?
08:58 — When Kids Start Forming Money Beliefs (Earlier Than You Think)
10:39 — Early Money Memories and How They Shape Your Financial Story
13:13 — How to Talk to Your Kids About Cost of Living Pressure
15:04 — Should Kids Have Jobs? Teaching Time Management and Money Together
17:27 — How to Explain Investing to Kids at Any Age
19:00 — Should You Let Your Kids Experience Financial Failure?
19:43 — ETFs vs Direct Shares: What's Better for Kids Investing in Australia?
20:49 — Tax-Effective Ways to Invest for Your Children in Australia
21:25 — Investment Bonds and Education Bonds Explained for Australian Parents
22:20 — Should You Invest in Your Name or Your Child's Name?
23:10 — Are We Raising Financially Literate Kids or Just Good Little Consumers?
24:09 — How to Normalise Money Conversations at Home
25:31 — Dawn Thomas and the Start Well Podcast: Where to Find Her

LINKS FROM THE EPISODE

Westpac — Kids bank accounts with parent-controlled spending limits: https://www.westpac.com.au/
Connect with Karen Eley: https://directory.ladiesfinanceclub.com/listing/karen-eley/
Connect with Betsy Westcott: https://directory.ladiesfinanceclub.com/listing/betsy-westcott/
Jessica Brady's Book 'Get Growing': https://www.booktopia.com.au/get-growing-jessica-brady/book/9781394352661.html?msockid=00099505874c6c8c260583e686586d23
Girls Just Wanna Have Funds by Molly Benjamin (ebook): https://www.booktopia.com.au/girls-just-wanna-have-funds-molly-benjamin/ebook/9781922848888.html

CONNECT WITH DAWN THOMAS

Instagram: https://www.instagram.com/advice.with.heart/
YouTube: www.youtube.com/@advicewithheart7115 
LinkedIn: https://www.linkedin.com/in/dawn-d-thomas/
Start Well Podcast: https://twd.com.au/startwellpodcast/

CONNECT WITH LADIES FINANCE CLUB

Join our free Facebook group - Ladies Finance Club Money Chat
Website: https://www.ladiesfinanceclub.com/
Instagram: https://www.instagram.com/ladiesfinanceclub/
LinkedIn: https://www.linkedin.com/company/ladies-finance-club/
Newsletter: https://www.ladiesfinanceclub.com/newsletter23

TAKEAWAYS

SOUND BITES

"Ask about the value, not just the cost."
"Failure is an opportunity to grow."
"Normalize money conversations at home."

TRANSCRIPT

[00:00:00] MOLLY: Hey, welcome back to another episode of Get Rich, the podcast that helps you do just that. Get rich and stay rich. I'm your host, Molly Benjamin, founder of Ladies Finance Club, and in this episode today I am sitting down with financial advisor and one of our LSC Faves, Dawn Thomas. Now Dawn is super cool.

[00:00:18] She's got purple hair, she wears the awesomest clothes, and I don't think I've been to an awards night where she hasn't won at least two awards. She is awesome. As you can tell. I am a big fan. Anyway, she's gonna talk to us about how to raise money smart and financially confident kids without passing on our own money stresses, which I think is very topical right now in this cost of living crisis that we're in.

[00:00:42] And I am doing this while and breastfeeding, 'cause I have a 10 week old. So there is a little bit where I go out, but don't worry, I come back. In this episode, we get real. So we're talking about how your behaviors can shape your child's more than anything you actually say. And we also do this little, it's not really a game, but let's just call it a game where I say, okay, instead of saying it's too expensive, how much can't afford it, those kind of common things that parents might say.

[00:01:07] Um, I say, Dawn, what can we say instead? So she gives us a great list of things that we can say instead. And also how to teach children at delayed gratification, especially in this world where like you can literally get anything to your door. Like Uber Eats anything on Amazon, literally within like a day.

[00:01:22] So how do we actually teach kids about that? And then the biggest tax traps parents fall into when investing for their kids and how you can avoid it. And also if you are listening and you're like, oh my gosh, I need help, uh, putting this actually into action, or I wanna speak to an advisor or mortgage broker.

[00:01:38] We have just launched our brand New Ladies Finance Club directory. Where you can connect with trusted experts to support you and your family. It's this little project I've been working on and it's taken me not gonna lie quite some time because I've been working with developers and yeah, it's been fun.

[00:01:54] Anyway, I hope you love it and I hope you find it helpful. So let's get into it. If you've ever wondered how to talk to your kids about money or just wanna set them up better than you, were these ones for you, because when women get rich, we don't just change our lives, we change the next generation too. I hope you enjoy.

[00:02:13] Welcome back to the podcast, Dawn Thomas. We are so excited to have you back.

[00:02:19] DAWN: Thank you for having me again, Molly,

[00:02:21] MOLLY: you are one of our LFC absolute favorite financial advisors and today's topic, we are talking all about kids and money and how do we, I guess, bring up really financially confident children.

[00:02:35] So I'm just gonna jump straight into it, Don. Sure. If I met a child in 20 years who's financially confident, they're independent, you know, they're investing, they're wealthy. What did their parents likely do differently to other parents?

[00:02:50] DAWN: It's really fascinating, uh, theory called Family Financial Socialization, and that really talks about how parents role model money, behaviors, how they talk about money, and that is something that's actually transferred through.

[00:03:03] So if you think about how people talk about money being like an inheritance that goes from one generation to the next. Mm-hmm. Money, behavior. Can also be transferred from one generation to the next. So I think if we see really well adjusted young people in relation to their relationship with money, I would think that their parents have actually demonstrated some of the really good behaviors around that.

[00:03:25] MOLLY: Yeah, I love that. And I guess if someone is listening and they're like, look, I don't have great behaviors. How am I meant to instill that on my child? Is it still possible?

[00:03:36] DAWN: Of course it is. And it really starts with, I guess, the incentive for you putting work into your own journey is that all the good stuff that will be happening for you really flows to down to them quite naturally.

[00:03:47] Mm-hmm. So if you end up having a more positive relationship with money, they're going to feel it. They're going to see it, they're gonna hear it. And you know, the way that they can do that quite easily is even through books like yours. Like, um, you know, with coaches that wanna have funds buying happiness, you know, get growing.

[00:04:02] Those are really good women centric books to understand a bit about the mindset and your relationship into money before you kind of dive into other areas.

[00:04:10] MOLLY: Yeah. And what do you think most parents do accidentally that make their kids worse with money? Even if they're doing, trying to do the right thing, like I know some parents will be like.

[00:04:20] We can't afford that. It's too expensive. Save your money. Save your money. Which sounds good, but they don't teach them about enjoying money. They don't teach them about investing for the future, growing your money through investing. So I guess putting that question to you, do parents accidentally make their children worse with money when they're trying to do the right thing?

[00:04:40] DAWN: You, you actually mentioned it the whole way of saying. We can't afford that. Um, I think that is quite, I wouldn't say dangerous, but in this time that we're in, it is difficult to get through all the expenses, but we need to bring it back to choice. And I have these conversations at home as it's a struggle in our household as well, that we, we are really being intentional going, we are choosing to use our money this way.

[00:05:04] For example, my partner is not in the finance world, so he would be like, oh, we don't have the money. That's why he tells the kids because he thinks it's a summary. And I'm like, no. We are choosing not to do this and this because the focus of our money is actually on this and this, you know, and we have a conversation about that.

[00:05:20] Mm-hmm. So, I, I understand it can be difficult for households because not, you know, if you're in a partnership, you might not have the same language around money, but we really need to shift it to choice. Mm-hmm. Do we really, it really something we can't afford? Or is it because we're choosing to spend our money somewhere else?

[00:05:36] MOLLY: Yeah, I love that. So I thought we could do just a little bit of a, it's not really a game, it's more

[00:05:42] DAWN: like

[00:05:43] MOLLY: if a parent says this, what could they replace that with? Okay. And I've got 1, 2, 3, 4, 5.

[00:05:49] DAWN: Okay.

[00:05:50] MOLLY: So the first one is a parent saying that's a waste of money.

[00:05:54] DAWN: I guess I've been caught in that trap as well, Molly.

[00:05:56] I'm definitely not perfect, but I would ask, is that the way you want to choose to spend your money?

[00:06:01] MOLLY: Yeah. Yeah.

[00:06:01] DAWN: You know, what other ways can you use to actually use your money in other ways, you know, to get them to think about opportunity costs. In that conversation.

[00:06:09] MOLLY: Yeah. Yeah. I think we've already said this one, but that's way too expensive.

[00:06:13] We can't of like, or actually we'll make the next one. We can't afford it, but that's way too expensive.

[00:06:18] DAWN: Well, maybe we can ask them, what do you think about the value this is going to give you Always back down to value. Because even in Jessica Brady's book Get Growing, she talks about what something costs doesn't necessarily mean what the value is.

[00:06:32] Like you can pick up something in a garage sale. Yeah. And or a, a secondhand store and the value far exceeds what you've actually paid for it. Yeah. So, you know, talking about the value versus the cost and, and what that means to you. It's an important discussion.

[00:06:45] MOLLY: Yeah. Love that. And like, that's more than we were planning on spending right now.

[00:06:50] Yes. Instead of I like that. Yeah. We can't afford it. But I think you mentioned before like we're spending our, our money on other things or Yeah,

[00:06:58] DAWN: yeah. We're choosing to spend our money this way, you know, in our household it's, we're choosing to spend our money on. Hockey and, and good food. Yeah. Which I plenty.

[00:07:08] Yeah.

[00:07:09] MOLLY: Which I think this next one answers that as well. Like if it's in a shop and the kid's like, I want this toy, I want this thing, would it be like, well, let's make that a goal and let's save for it, as opposed to going, you can't have it, or it's too expensive.

[00:07:25] DAWN: Yeah, that's right. You say that. Well, if, if this is something that's important for you, let's.

[00:07:29] Put together a saving plan for you to get there because it also teaches them delayed gratification, which is really important for children in their sense of financial success as well. If they're able to delay today's gratification for something down in the future, that sets it up really well.

[00:07:43] MOLLY: I know, I think especially in this day and age, because I don't know about you Norm, but I get concerned when I think of.

[00:07:50] Gosh, I'm gonna be teaching my little girl about money, probably in a moneyless society, like in the sense of like physical money, less society. And then not only that, but we're bringing them up in a society where if you want it, you can get it. Like there's buy now, pay later. There's credit cards. They're really easy to get.

[00:08:10] If you want food, Uber Eats at your door if you want. To get somewhere you call an Uber, like there's just, if you want something from Amazon, it can be literally arrived to your door the next day, like

[00:08:21] DAWN: Yes.

[00:08:21] MOLLY: How are you tackling that with your kids?

[00:08:24] DAWN: Uh, they, I, I delayed for a long time actually. Bank accounts for them.

[00:08:28] Yeah. Because what I did was, if they had any gift for money, we, we put it into a share account and a very small amount was held in cash. But then I realized that I was not. Teaching them how to actually operate things like the money terminals, which it was just funny to see my kids being older and, and being scared of using the F Force machine because they didn't have that experience.

[00:08:46] Yeah. And so I realized that my approach is not, it's not great. I needed to teach them how to use that. But I think as parents, your kids will have different personalities. In any case, some will have better control than others. And with the setup that I have at home. With the kids' accounts. So I have it with, with Westpac, just because they allowed for a card for a younger person, but eight or nine years old, they can get a card.

[00:09:09] I'm the one that controls whether they can take money out of the savings account.

[00:09:13] MOLLY: Ah, nice.

[00:09:13] DAWN: So it means that they have to discuss, have a discussion with me before they want that, but I think there's a spending limit of $30 a day in any case. So they would need me to pay for it first if they need that purchase.

[00:09:25] Yeah. So it's just trying to put some stops where you're slowing down the process. Yeah. So even if they're doing, if the eldest is 15, I think he has tried to do some online shopping, but, but again, because the quote comes to me to approve, he has to kind of fess up. Yeah. So I'm not hovering over them. It's more of going, I'm trying to be a part of that guidance because they are experimenting with money and I'm just giving them some, uh, training wheels, boundaries.

[00:09:51] Yeah.

[00:09:52] MOLLY: Yes. Which is so important. Oh, actually, I was just say, I had a, I had a friend here earlier today and I went to college with her and we had such different spending styles. She was such a natural saver and I would spend absolutely everything I got in and kind of like, I've had to really work obviously on my, my mindset, my money, like beliefs.

[00:10:13] Is that just the way we're born? Is it just ingrained in it to us? And I know like you know with some people they'll have kids who are complete opposites with money, but they've grown up in that same household.

[00:10:24] DAWN: Mm, yeah. Look, there's the money mindset coaches, you know, will tell you that money behavior start to develop, I think between like three to five years old, you know?

[00:10:33] Yeah. That's why they get to begin with early money memories to uncover like what you've heard. You know, that that conversation of, oh, we can't afford that. Or, you know, shares are risky. All the emotions, the guilt, the fear, wanting to actually get happiness out of money, they all occur because something's happened in the past with us.

[00:10:51] And I think that's where it goes from the, yeah, my brain understands what I'm supposed to do versus the irrationality of, or I just, something is telling me inside that I can't do it for whatever reason I'm having difficulty with it.

[00:11:02] MOLLY: Yeah. And I think even when you reflect, and I think Jess Brady has this in her book and she's got some fantastic stuff on your mindset as well.

[00:11:10] Shout out also to Karen Ley a wonderful money mindset coach. Yes, Betsy Westco. And there's a whole bunch out there. But when you are looking at your money beliefs, thinking back to those early money memories, and I know for me, like it was like I won a scratchy, oh, sorry, my, I'll just get baby. And she might join the podcast.

[00:11:32] DAWN: Hi, baby. Hello, darling. Okay. You gonna come during the podcast?

[00:11:39] MOLLY: Oh my Molly, my mar me. There we go. Put your dummy on. All right, we've got on Get Rich. We've got our latest youngest member of, um, least finance, C My little Velcro baby. Yeah. Sorry, what was I saying? Just around those. Yeah. Early money. Memories and how they can influence our, um, money story as well.

[00:12:06] And you know, it's so funny when I think back now, knowing everything I know and being like, oh my gosh, bills were always discussed behind closed doors. Yes. My, one of my first memories of money was like getting all this money from a scratchie, I dunno who gives an 8-year-old a scratchie, but a family friend did.

[00:12:20] And then I spent it all straight away on dresses. And then I'm like, nothing's changed. I'm still spending it on dresses, but instead for my dolls it's for me. And just those early money memories and how. That's where it really helps to unpack actually, what are my beliefs around money and where did they come from?

[00:12:37] DAWN: Yeah, look at you. That's a great example, right? You, because you didn't have the, maybe the money lessons, you know, whether we're savers or spenders also comes down to what we've actually learned. And I'm kind of like, you know, similar to you, Molly, what I saw was, you know, spenders like the, the person that was dominant in terms of the financial decisions in my household, my mom, who is a, a spender and it was a very much.

[00:13:00] Yeah, to understand that he's actually quite scary, I suppose. Feeling like you can spend, but hoping, thinking that things will be all right. You know? And I felt like that's what you kind of impart to your children going, what are the things you want him to feel similarly to you that give you that happiness versus what are the things that give you that fear?

[00:13:21] That's why we dig back into the past.

[00:13:23] MOLLY: Yes, and I had a friend growing up, and I know her, her parents, it was always like, even though her parents both worked, it was always her dad's money. And I always remember being like, I never want it to ever be just one person's money. I want it to be family money. So I think, and it was always like just one of the partners managing the money.

[00:13:43] So I think that's really important to actually go. Who actually managed the money when you were growing up? Yeah. Sometimes it is the mother, sometimes it is the father, and sometimes those financial decisions are made by the man. And then for we can go, okay, well is that actually our role? It absolutely is.

[00:14:00] And you should definitely be part of any money conversation in your household. Oh, right. I guess if a parent is anxious about money or is a bit like, oh. Because it's cost of living, oil prices are going crazy. That's having an impact on people. You know, some people are paying three times the amount they normally spend on their petrol.

[00:14:20] DAWN: Yes.

[00:14:20] MOLLY: Do you think kids, children can feel that and do we hide it from them or do we share it with them how we're feeling?

[00:14:27] DAWN: Look, openness is so important. I think maybe we've got a culture where money is actually hidden. I think the more open you are to the conversation, that's where kids can actually learn through the experience.

[00:14:38] Because one element of. Family financial socialization is the experience of money decisions. Right. So this is a, it's a difficult time, but your kids are gonna face difficult times in the future as well themselves. Yeah. For us it's a fuel crisis. Yeah. For them, it'll be some other iteration that will happen in their lives.

[00:14:56] Yeah. So you want them to think back and go, oh, you know, remember that time we had to cut down on this and this just for the moment, because we needed to just stretch things, you know? So for my, for example, my kids, I told them. If you want any additional hockey gear, I said, you're not going to get it.

[00:15:11] 'cause we've got the essentials.

[00:15:13] MOLLY: Yeah.

[00:15:13] DAWN: Till maybe 12 months time. I said in the meantime, if you want to buy something, you're gonna use your savings for it because I know they've got the essentials. I think we are at the the time now we're going between essentials and wants. Yeah. And you have the ability to actually save up for these things in the future because.

[00:15:29] We have to acknowledge that it's a tougher time now. Yeah. And your discretionary spending is even decreasing even further. You know, probably as the days go on, it's even harder to have discretionary spending than 12 months ago. So it's okay to have that decision. And I do have it with my kids quite openly around.

[00:15:49] Where we are spending our discretionary money, what's essential versus what's a want?

[00:15:53] MOLLY: I love that. And it's just setting out those boundaries and being really open with them. Like this is the situation and this is what's happening. And I was curious to find out, do your kids or their friends, do they have jobs or is it just more they get money and then they have to save that money?

[00:16:10] DAWN: Yeah, the, my eldest does have, he does umpiring duties, so not officially yet. He did say he's old enough to get a job. I said that grades, he needs to show me that he's managing his time well. Um, yeah. You know, between sport and school before he can do that. Yeah, because I, I dunno, it's just our philosophy going, the way that you manage your money is also like the way you manage your time.

[00:16:30] You know, there's a certain amount of structure. You know, cash flow is very applicable as a concept to, to time flow. You know, if you've only got certain number of hours in a day. They've got to utilize it the best way. So the eldest does umpiring, the second one does additional chores around the house. So she might, yeah, do my nails and get paid for it at at home.

[00:16:49] Very skillset. And we're talking to her about, maybe she might go around to the neighbors and ask if they have anything that they. They need help with because they are,

[00:16:58] MOLLY: yeah.

[00:16:58] DAWN: Yeah. We talk about the concept of if you're new to something, you might have to do work for free for a while to build up your, your resume.

[00:17:06] And then once you've proven your work, then you can, you know, you can charge for the service. So it's kind of a combination. Molly, in terms of. How they're working it and yeah, and we did talk about how markets are currently, and I told my elders, I said, you're gonna start getting umpiring money soon. The fact that the market is so up and down is actually a really good opportunity to get into the market.

[00:17:28] You know? Yes. Um, I said even though we're not trying to time it, but just saying that

[00:17:33] MOLLY: if

[00:17:33] DAWN: you got some money to put

[00:17:34] MOLLY: away.

[00:17:34] DAWN: Yeah.

[00:17:37] MOLLY: Awesome. I love that. That's fantastic. I always love hearing what people are doing in their own households. 'cause I find it just really helps you, gets you thinking going, oh yeah, maybe I could be doing that.

[00:17:49] Or maybe I could, I should be doing that. Love that. And yeah, I was gonna say, like obviously being a financial advisor, I imagine you'll be getting those. Kids investing. How did you explain the concept of investing to them when you were like, if they have started investing or have, have

[00:18:07] DAWN: you explained that?

[00:18:08] Well, they said that, you know, shares for the long term, it's something that you kind of set and forget, but if you leave it alone, it's gonna do the job. You know? So the best thing is just leave it alone. And I guess looking at kids in different personality types, some kids will want more detail with that and open up the conversation more with you.

[00:18:24] For example, my. Youngest two are not too interested in how it works at the moment. So, you know, one's 12 and one's turning 14 on Sunday. They're not interested in the details, but they do like it if I show them, you know, the graph of how shares have done. Yes, they like it when they see the overall one 10 graph Yes.

[00:18:40] That their portfolio has gone up. Right. So you know that if you give it enough time, you'll be able to demonstrate with them that even through the ups and downs your portfolio does go up. The eldest is is more in tune to what's happening in the world. So he likes. Probably a deeper conversation around the mechanics of why

[00:18:57] MOLLY: Yeah.

[00:18:58] DAWN: How it's flowing on. So I guess you just do it where they're ready, but if they get the concept that long-term investing requires for you to just leave it alone.

[00:19:06] MOLLY: Yeah.

[00:19:07] DAWN: And just let it do your job, then you've won.

[00:19:10] MOLLY: And I would love to know as well, like do you think parents should ever let their kids experience financial pain?

[00:19:16] I don't think my like dad meant to, but like a few times I've experienced financial pain because I've listened to some share tips, which maybe didn't work out too well, but it was a great lesson. But what are your thoughts on should parents ever like kids experience financial pain?

[00:19:30] DAWN: Oh, that's a, it's a good thing because it becomes a lesson, right?

[00:19:32] You know, doing something failure doesn't define you. It's an opportunity for you to grow through the experience, you know, so maybe if, if something has gone wrong, not, don't try and shame someone. Just talk about how you can use that experience to do better. I think that is that conversation around as well, like, do you invest your, your kids in a diversified portfolio, for example, like an ETF, or do you get them to buy direct?

[00:19:53] Shares. It depends, right? Yeah. Some people like the idea of their kids learning more about a company and then relating it to price, and they think that that's a great lesson if they go in and actually invest in direct companies. Yeah, and I think you would've learned a lot by picking the shares reading, so in in itself, that has merit to do so.

[00:20:11] Yeah. We just didn't go that route because I just chose a different way for my kids. The important thing is. What can they learn out of it?

[00:20:19] MOLLY: Yes. Yeah. I learned I'm not a stock picker and I'm only ever buying ETFs. Yeah. Because every single company I've ever bought has gone down. Yeah. And every ETF I've got has always done much better.

[00:20:31] DAWN: Well, you, you learn the value of diversification in your own way.

[00:20:36] MOLLY: I think my dad would be offended if I told him that. He'd be like, oh, okay. And I guess getting really practical. What are some tax efficient ways to invest for your child, for like an average Australian? And of course, just mentioning that obviously this is financial education information, not financial advice, but what are some like.

[00:20:57] Because I know there's some tax effective ways and some not so tax effective ways.

[00:21:01] DAWN: Yeah, this is a hard one. I think typically when you're trying to save for children, and you might have like an education purpose or maybe something like a car down the track, you know, people can use investment bonds or education bonds for that.

[00:21:12] And the reason why that's tax effective or can be tax effective is that it's actually taxed differently on the investment. It sort of follows like a company tax rate as opposed to. It landing on you personally? Yeah. 'cause children are limited by what they can have and what they consider unearned income.

[00:21:30] Unearned income is income through investing because the tax department doesn't want parents to be hiding money in their kids' names. Yeah. And getting a tax write off. Yeah. So if kids are working and earning money, they fall under the normal thresholds, but if they, I think they earn something more than about 400 odd a year in unearned income.

[00:21:48] They can get taxed quite severely. So it depends if you're trying to set up what they call an informal trust through things like your share platforms, this is where it gets gray because the platform will let you open up an account in the kids' names, but where the tax liability sits is a gray area. So you can get a text phone number

[00:22:10] MOLLY: mm-hmm.

[00:22:10] DAWN: For your children and link it to that.

[00:22:14] MOLLY: Yeah.

[00:22:14] DAWN: Or you might just have to accept that maybe the lower income. Parent in terms of lower taxable income, parent actually carries that investment.

[00:22:22] MOLLY: Yeah.

[00:22:22] DAWN: Also, some parents, they are choosing to have children later on in life. Yeah. So superannuation becomes a good platform for that.

[00:22:31] So for example, because we know superannuation is really taxed less internally, if you know you're gonna be able to access your funds in five years or 10 years time, you can always get those funds out for the purposes of your children. So there's, there's a few ways, ah, I would like to have a more straightforward answer, but this area is yes.

[00:22:47] Complex. Yes.

[00:22:48] MOLLY: Yes. As everything in finances.

[00:22:50] DAWN: Yes.

[00:22:51] MOLLY: It depends on, it depends. Depends.

[00:22:54] DAWN: Yep.

[00:22:54] MOLLY: And then just a final question, do you think we are raising financially literate kids or just good little consumers?

[00:23:02] DAWN: Uh, I think the consumer scope of it is coming in quite strongly. What we know about financial literacy figures is that our, our young people actually have low financial literacy, and even beyond that, you know, financial literacy can also be measured by a questionnaire that a BS sends out.

[00:23:19] But beyond that, it's also the capability. Of them making those decisions is, is taking knowledge and making good decisions from that. Part of that could be that the generation that has kids hasn't learned to be, to have those conversations with their kids yet, you know, we haven't had the time to go, how do we unpeel what's happened to us and talk about our own experiences and be open.

[00:23:41] Yeah, so definitely with people listening in to this episode today, I think it's just that awareness.

[00:23:47] MOLLY: Yeah,

[00:23:48] DAWN: will allow you to kind of switch your kids' destiny of being consumers.

[00:23:52] MOLLY: Yeah,

[00:23:53] DAWN: into, into actually being quite aware and intentional spenders.

[00:23:56] MOLLY: Yeah. And having those conversations, watching the language you use around money.

[00:24:01] But I love that openness as well. Just like, this isn't a bad thing, this isn't a good thing, it's just a thing. Let's have a conversation about it. We're all gonna use it every day, probably for the rest of our lives. So let's start talking about it and normalize it.

[00:24:13] DAWN: That's right. I mean, when you, you know, for example, like in my household, what I'm struggling with is that.

[00:24:19] My littlest one will go in and just take some of the snacks that he, he doesn't understand the idea of rationing over a period. You know, he goes in there like a mouse and he goes and takes something and we don't wanna say that you can't eat it, but we're try, I'm trying to get him to understand that we do shopping based on a period of time.

[00:24:37] Yeah. And for us to actually enjoy it consistently over that time, we need to actually space it out. You don't kind of binge binge eat because it's there, but it's a bit of a hard concept because that can throw your own budgeting out with groceries.

[00:24:52] MOLLY: Yeah.

[00:24:52] DAWN: When you've got very hungry teenagers under your household.

[00:24:55] MOLLY: Yeah.

[00:24:56] DAWN: And it's not about, that feeling is almost going, you should be having this instead of this. This is actually meant for your school lunchbox versus.

[00:25:04] MOLLY: Yeah,

[00:25:05] DAWN: I'm bored, so I'm gonna have that. So you can have an avocado, beautiful avocados, which are in season, have that as your snake. Yeah. So it's, it's a struggle.

[00:25:13] Molly's a struggle.

[00:25:14] MOLLY: Yeah. A constant learning journey.

[00:25:17] DAWN: Yes.

[00:25:17] MOLLY: While I'm about to start.

[00:25:19] DAWN: Yeah.

[00:25:19] MOLLY: Well, thank you so much Dawn. And Dawn, can you just give us a little bit of a summary of your awesome podcast so people can check that out too? Because you read all the awesome books in finance. By Aussie authors and then you record podcasts on them.

[00:25:34] DAWN: Yes. Thanks Molly, uh, for letting me do a shout out of the Start Well podcast. We've got two seasons and we are in the midst of season two right now, and we actually go through really, uh, well-regarded finance books, giving you kind of how you can peel out topics. To bring home to your family and have money conversations and that might spur you on as well to potentially engage with that resource.

[00:25:56] So yeah, if you're wanting to get a summary of the kind of books that are out there and understand how you can use them at home, please listen to the Start Well podcast.

[00:26:04] MOLLY: Awesome. Well thank you so much Dawn. I need to go change a nappy, which will be very fun. But we really appreciate you coming on. Get Rich and we'll pop links to where you can listen to Dawn's podcast and also her link to our Ambassador Paige, 'cause she's one of our fantastic ladies Finance Club ambassadors.

[00:26:22] All right, thanks so much, Dawn.

KEYWORDS
financial literacy, parenting, money habits, investing, financial education, kids and money, family finance, money mindset, financial socialization