Summary
Today we’re joined by Ana Kresina, Head of Product and Community at Pearler and the Co-host of the ‘Get Rich Slow Club’ and ‘ETFs for Beginners,’ podcasts.
She’s also just become a published author with the book “Kids Ain’t Cheap”.
Some of the topics we cover in today’s episode are:
- Ana’s FIRE journey (00:03:37)
- Hitchhiking through Europe (00:07:09)
- Why Ana wrote a money book around raising kids or preparing to raise kids (00:10:02)
- The importance of normalising money conversations with children (00:23:12)
- Philanthropy and teaching your kids why giving matters (00:35:41)
Links
- Website – Ana Kresina
- Book – Kids Ain’t Cheap
- Podcast – Get Rich Slow Club
Kids aren’t cheap, but they don’t have to be overly expensive either. One thing I think a lot of new parents seem to fall into is needing to buy all the latest and greatest baby clothes, and gadgets, or spoil them with every type of toy available.
With our 3 we were lucky to get some baby bonus from the govt at the time for the first one, and the things we bought (cot, clothing etc) was reused for the next 2. They’ve all worn hand me downs for the most part until they reached teenage years as my relatives spent truckloads on clothing for their kids, only for them to quickly grow out of them so they were very much unused and then given to us. Kids don’t really care that much about fashion, I think it’s parents that push them to that lifestyle, so shop at K-Mart of Target for clothes rather than more expensive stores. As for food, learn to cook simple meals so you avoid buying packaged crap. A: it’s less expensive and B: it’s healthier.
The biggest expense I find with a family is holidays – we always need to book a bigger room, multiple airline tickets, entry tickets etc so that’s one expense I’m looking forward to not having once they grow up.
We took our 3 to the US for 3 weeks last year, and 2 days at Disneyland cost $2500 for the entry tickets alone…
Good points.
That’s one area where I’ve found myself bending too. I can be frugal with my own expenses, but it’s a whole different story when it comes to the kids. And yes, parental guilt is very real. There’s this expectation from companies and other parents to purchase the safest products for your children.
I’m not even convinced they’re significantly safer, but the guilt of not choosing the safest option is real.
Also, you feel bad if you don’t get the safest possible option because if anything happened to your kid you’d never forgive yourself.
As a result, we’ve ended up spending thousands more on top-of-the-line prams, car seats, crib accessories, cabinet locks, outlet covers, window guards, fancy thermostats etc.
There’s a delicate balance between genuine safety and marketing hype, yet it’s incredibly challenging to opt for the less expensive choice when you can afford the pricier one, especially when the stakes involve more than just yourself.
Thanks so much for having me on the podcast! And wishing you all the best with your new bundle of joy! I’m excited to connect with you again in a few years to hear your thoughts about finances and parenthood, and whether you agree with the title — Kids Ain’t Cheap 🙂
Great chat Ana and Matt.
Like everything in life you have to weigh it up the pros and cons. In life it cannot always be about the money. Of course you add another member to the family it is going to cost money whether a child or a pet. There is going to be time out of the work force for one or both of the parents, this is really unavoidable and will result in lost income. That is never going to change. It shouldn’t be up to the government to pay for a parent entire time off work. I think the 20 weeks is sufficient or happy for them to just give a lump sum baby bonus as they used to. They should never make it compulsory for an employer to pay paid parental leave, otherwise we will see a trend of less women being employed. That would be terrible to go back the 1900’s where women were discriminated against. When you are a parent you should enjoy the experience of being a parent, teaching them, watching them grow, giving them guidance and opportunities. Not focussing on the $100’s of dollars they are costing you every week.
All that said, here are some tips:
* Give birth to them in a public hospital — Cost $0, well medicare levy.
* Accept second hand clothes from friends, cousins, etc, and then pass them on to another family once you are finished with them
* Don’t waste your money on fancy holidays with sight seeing between 0 and 5 years of age. They only want to go to the park, beach, pool, and hang out with you at that age.
* Public schooling – primary school ~$200 per year plus excursions, uniform etc. high school ~$400 per year plus extras. v’s up to $25k – $30k a year in a top private high school. Your kid will do well if they put in their best effort no matter what school they go to. An old client of mine said he wishes he had of just given his daughter a house or an apartment rather than spending $400k on her education as she ended up working in retail.
* Once old enough, don’t do separate meals for the kids and parents.
* Invest all the kids birthday and christmas money they receive in shares. If Family ask what they want for their birthday, tell them nicely – cash. The kids will end up with more toys than they will know what to do with.
* Don’t listen to all the noise or compare with others. Run your own race. Some parents are very competitive and try to out do each other. Very Ugly and costs a lot of money.
Matt, the school curriculum is set my the Australian Curriculum, Assessment and Reporting Authority (ACARA). I did business studies in around Year 10/11 and it did go into detail about shares, investing, etc. Our high school event registered us all into the national stock market game. However, it was ASIC that banned the CBA Dollarmites school banking programme. How ridiculous. Let’s not encourage kids to learn to save at the risk of the banks doing some clever marketing to ensure they have some customers in the future. I do believe as with a lot of things it is up to the parents to have those money conversations with their kids. Just be open with them. It doesn’t need to be a taboo topic. It isn’t that hard – spend less than you earn and that will be a good start.
Good luck with your little girl and any others that come along. I do like your comment of not robbing them of the life struggles, journey and achievements. That is gold. I will be doing the same. Although I have told my kids that we will match their first house deposit to give them a bit of a head start and then we get to enjoy seeing them experience the property journey a lot earlier and start creating those memory credits.
Keep up the good work.
Great comment
All very well said Marco. I can relate to a number of your points. Before age 5 we used to mostly go to caravan parks in regional Victoria, and the kids loved it. Plenty of other kids to play with, usually a pool or games room to keep them entertained, and a relaxing and inexpensive time for mum and dad.
Public school is the way to go – having attended both private and public I can attest to the curriculum being exactly the same. It’s all the extra’s a private school provides which you don’t get at public, but you pay for it! The fees you mention for public are about half of we we pay though. Nowadays, $400 for primary and $800 for secondary – but still a whole lot less than the private fees.
What a great comment Marco.
I read it out loud to my wife. She’s a school teacher so the whole public vs private interests her greatly.
The topic of mandatory parental leave is interesting. Milton Friedman might have argued that it discriminates against the very members of society it aims to support, as you’ve noted.
It really boils down to the structure of incentives.