Age Pension

Let’s talk: Will you educate your grandchildren about money?

Jun 09, 2017

Saving money is a learned skill, will you pass it on?

Teaching young children about money can seem as attainable as teaching a fish how to ride a bicycle, but in light of a new global study, you may want to consider getting that fish on a bike, and soon.

The worldwide survey conducted by US think-tank Pew Research Centre, polled more than 34,000 people and found seven out of 10 Aussie believe their kids will be worse off financially than they are.

Those aged 50 and older were unsurprisingly not as upbeat about the future of a young person’s finances as their younger counterparts.

Only 31 per cent of those polled overall believed their children will be better off than the current generation.

“Such despair is particularly strong in Australia, Greece, Japan, France, Canada, Spain and the UK,” the research found.

Australia and Japan were the most negative about their future prospects in the Asia Pacific region – 30 per cent above the global median.

In half of the 32 countries surveyed, people aged 18 to 29 were more optimistic about their own future financial prospects than their parents were.

While it’s no secret your children and grandchildren won’t enjoy the same pension benefits – especially as the government continues to push the age at which you’re eligible for it up while continuing to lower the actual benefit – where do you think their blind optimism comes from?

Perhaps they’re relying on you or their parents to leave them something. Or perhaps they’re relying on the fact house prices across the country fell for the first time in 18 months recently. But as it’s not your first rodeo, will you do more to try and educate the next generation about the ups and downs of personal finance?

Although it’s true Australia has overtaken the Netherlands for the longest run of uninterrupted economic growth in the developed world, economists are predicting we’re on the brink of hitting a “technical recession”.

On Monday the Australian Bureau of Statistics showed wages and salaries had grown by 0.9 per cent in the last year but according to the Sydney Morning Herald, three of Australia’s major financial institutions were forecasting “paltry” economic growth of 0.1 per cent or less.

The NAB were the first to call the negative growth for the three months to March when National Accounts figures are released next week while Morgan Stanley has predicted negative growth of 0.3 per cent.

The SMH reported that analysts have said there is a “small possibility of a negative GDP” in the next quarter, due to the impact of Cyclone Debbie, which would take Australia “into technical, but not real, recession”, according to the NAB.

NAB Chief Economist Alan Oster told the SMH that the big question for next week would be whether the slowdown included signal as well as noise and implied a more fundamental economic slump.

Commonwealth Bank economist Kristina Clifton said “highly indebted households were restraining their spending in order to pay down debt”.

Treasurer Scott Morrison hasn’t been ignoring the warning signs and cautions, neither should you.

“We now stand at an important juncture,” he said this week. “It can never be assumed that economic growth will just happen, simply because growth has been our companion for 26 years.”