First up, congrats! Having 2 new additions close together is very exciting, think of the fairy bread and lolly bags you’re going to get in quick succession every year... Brilliant. However, what you gain in party cake and pin the tail on the donkey’s, you may lose in large outlays for them, so here are some thoughts:

I firmly believe most small children have more toys than they could ever possibly need. Given it can take anywhere from 20 – 500 years for plastic toys to breakdown, that is not the legacy most of us want to leave behind for the next generation.

Research has shown that, on average, kids only play with a handful of toys, leading to a new movement called The 20 toy rule. So, ditching the toys means less waste, less landfill and far more opportunity to give them something more meaningful and impactful in their older years.

Investing for kids:

I really love the idea of ditching the latest Bluey toy and instead getting the little people in our life on the investment journey early. But what are the things you need to think about:

- Who is going to own this? Generally, you will need to invest in an Adult’s name. Be aware that you may have tax obligations to pay on any income received from the investments (even if you reinvest the money straight back into the investment account) and when you go to sell or transfer the portfolio there may be Capital Gain Tax to pay.

- What are you going to buy? This becomes a question of where to deploy the money, will it sit in a high interest savings account (can be good for easy access but bad for growth given interest rates are currently lower than inflation), a handpicked share portfolio – which requires time to research and buy the individual companies, or will you use an option that tracks a market place, like an Index based ETF? These can be great for low-cost diversification but gives you limited ability to customise it based on any companies you want in or out of the mix. Some people also look at Investment Bonds, they can have some tax benefits, but also have restrictions on how much you can contribute every year. So, each has their own pros and cons for you to weigh up.

- The general rule of thumb with investing is the shorter the time horizon, the more defensive/conservative you want to be with where you invest the money (we use a fancy term here called ‘asset allocation’), but the opposite is generally also accepted, the longer your time horizon – the more risk that investment goal can handle, thus many choosing more growth based portfolios. Over time, based on the needs of the child and when they are going to receive/use the money, you may need to review the investment allocation and decide if it needs tweaks or changes. Your little loved ones may have strong views on the environment, or social justice which may see an opportunity to educate them on what they are invested in and make changes based on what fits their ethical beliefs.

- This calculator by ASIC can help you see, based on some assumptions what your nibling is likely to have by the end of that period. You can also use it if you are planning on investing for yourself to see where you will end up.

Teaching young people about money is a very exciting privilege and responsibility. I believe we should teach them about the value of money from a very young age (you want to see this in action, give you child physical money to buy something with and watch them make much more discerning choices).

Some other ideas for helping kids learn about money:

- As mentioned above, giving children physical money can see them be far more careful with where and how it gets spent.

- Consider having an age-appropriate chore list where they can earn money – ensure the chores are based on age and capability, not gender stereotypes. The wage gaps starts at home, so make sure this doesn’t exist under your roof!

- You can also consider implementing a Spend, Save, Give option for your children. You can set this up however you like, some parents choosing to match any amounts that their child saves and/or gives. Teaching them good habits on using money for now, later and helping others.

- Look for ‘teachable moments’ - ways to share ideas about money that are fun and exciting. On Mardi Gras a girl on the street across from me was selling lemonade (bless!). I bought some and asked her what she was going to do with the money, she said it was going to pay for her dance lessons (well done parents, she had a clear goal). I asked her how much she needed, how she was going to ger goal – she told me she didn’t have long until she hit her target. I explained to her that if she got extra money, she could think about putting that money somewhere where her money could make extra money, you should have seen her eyes light up! Those are teachable moments, and if you look for them... they are everywhere! 

Have a money dilemma?

Money dilemmas can be a nightmare! They can leave you up all night ruminating about what to do, have you feeling alone and isolated or just plain ol' stuck. So, we are here to help. I am going to tackle one a week and give you my unbiased, no BS general thoughts on how to tackle your conundrum. We would love for you to send yours (or someone you know) in. 

Obvs all of this is general advice only... especially important to note any and all of the comments above do not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs.