Eight money lessons to teach your kids

My kids switch off when I bring up topics such as superannuation, insurance, spending and saving.

I have to choose a time when they are receptive to a dose of parental wisdom, otherwise they claim to be too busy to chat. They are working full-time: exhausted and snowed under. But I don't want my kids making the same mistakes

I made, some of which have been shockers, particularly when I was young and didn't take much notice of what my parents told me. So here are eight important financial conversations to have with your children.

1. Be aware of your consumption

I spent a lot of money on clothes and shoes in my early adult years and I dined out at the drop of a hat.

I was in a pattern of unhealthy consumption, using shopping as a compensation for life's stresses, which kept me juggling credit card debt. Credit cards and buy now, pay later programs are not a good idea for young people.

Being aware of why they are spending money and their black-hole shopping patterns can help curb their spending. Spending apps that categorise where their money is going can help.

2. Don't spend too much on cars

I bought a cheap, old car from an unknown private seller and had to replace the engine a couple of months later.

On the rebound I bought an unattractive, discounted new car. It is easy to get into debt paying for a car and its running costs.

I often refer to annual data on the costs of running a vehicle because it is sobering. For instance, the cost of running a medium-size car in Australia is $431 per week, according to Compare the Market.

I tell my kids and their partners not to get emotional about cars and to find ways to keep their transport costs down. Even if you own a car, living on a good public transport route can cut costs for fuel, insurance, tolls, parking and the depreciation of a car.

3. Keep an eye on your super

Raiding your superannuation balance derails the momentum of compounding interest.

I took out my superannuation early to pay a large overseas phone bill that I'd run up with my then fiancé. We broke up.

It was in the days when you could withdraw your super for no reason because preservation wasn't in effect.

And when I decided to check my payslip one day, I discovered to my horror that one of my employers was paying my super to someone else in the company by mistake. Super is important and I want my kids to stay on top of it so that they are on track for a comfortable retirement.

They should check that their employer is paying the 11% (11.5% from July 1), and that their insurance covering death, total and permanent disability insurance is through their super. If they elect to, salary continuance can be bought through super too.

4. Learn to cook

My mother cooked the same meal for dinner five or six nights a week. I wasn't a great cook when I was a young adult.

When my kids were small, I cooked pasta and bought sweet muffins every day. I have become a better cook and am aware of the health consequences of what we eat, and don't spend much on eating out and takeaway.

As parents we need to be good cooks and encourage our kids to cook too.

One way to get them on board is to ask them to cook a meal once a week, starting in their teenage years, so when they become independent, they will know how to plan and cook meals.

Instead of going out to restaurants, they can invite friends for a potluck dinner where everyone brings a plate to the table.

5. Be proactive about promotions 

I didn't actively manage my promotions at work.

In the competitive world of journalism, I tended to rely on job offers from other employers to wrangle a pay rise.

My bosses - like so many - weren't great at focusing on staff development.

Making it crystal clear that you want to move ahead and are prepared to take on extra responsibilities and training to equip you for the next step is a better approach than waiting to be noticed.

6. Don't neglect insurance

I have had two new cars stolen, three home burglaries and a fire in my kitchen that almost got out of hand.

Insurance is valuable and it's not a good idea to ignore it. The cost of insurance can be reduced by accepting a higher excess.

Young people might need help from their parents to understand the importance of insurance. They may not see the point of taking out travel or home and contents insurance or private health insurance, but it can help them avoid a big hit to their finances if there is a disaster.

7. Holiday better and cheaper

I have booked last-minute holidays and paid a premium for airfares and accommodation.

A hidden cost of holidays is the opportunity cost - annual leave is finite so if you choose a bad holiday experience, you may not have a second chance for another year.

Short-term accommodation, such as Airbnb, gives people more options than hotels, motels and resorts.

A holiday apartment with some kitchen facilities means every meal doesn't need to be in a restaurant. Australia has plenty of great natural sights that are affordable to explore.

8. Don't fall for hot investment tips

I've bought shares in companies because a friend or an 'expert' said it was a sure thing. I believed the hype. I lost all my money on two of them - a painful but valuable lesson.

There is nothing you will hear about a large, listed company on the ASX that is not already reflected in its share price.

If you hear a hot tip about a lesser-known company, you could easily be a victim of a 'pump and dump' where you are enticed to be a financial lemming following the price up a hill and over a cliff.

If you hear about a private investment opportunity in a small business or property syndicate, chances are it is desperate to raise money because larger investors with deeper pockets don't like the look of it.

Instead of giving into a fear of missing out, stick to traditional diversified, low-fee investments such as exchange traded funds.

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