11 Sep The bank of Mum and Dad just got bigger – Vanessa Stoykov
Would you believe that two in three Aussie’s believe their parents should make sacrifices for their children’s financial future? There is a shift happening and it is that parents are moving in with the kids. Vanessa Stoykov explains.
Kevin Turner: Well, would you believe that two in three Aussie’s believe their parents should make sacrifices for their children’s financial future? Well, I say maybe the kids are going to make some sacrifices themselves. But let’s deal with this seriously. This is the subject of some research that was commissioned by money expert and author of the book, The Breakfast Club For 40 Somethings. Vanessa Stoykov. Vanessa, thank you very much for your time.
Vanessa Stoykov: Thanks for having me.
Kevin Turner: Do you get that reaction sometimes maybe the kid should be sacrificing a bit more themselves. Are they expecting too much?
Vanessa Stoykov: Oh look, it’s been a funny reaction to this piece of research. Actually I’ve had a range of reactions from indignation and horror to well kind of makes sense because kids probably are never going to be able to afford their own house now.
Kevin Turner: Okay. Well let’s dig into what the results showed. Was there a dominant a group of individuals, either male or female or age group that sort of had this sentiment?
Vanessa Stoykov: Yeah. Look the highest age group that really wanted their parents to sacrifice were 18 to 25 year olds and I think that’s cool. It’s a bit of backlash. And that was wanting their parents to sacrifice things like nice fancy cars and overseas holidays and dinners out to save for them. So it really is a juggle to think how much do you give to yourself and how much do you enjoy life and how much do you put away so that they’ve got a chance to make more of their life too.
Kevin Turner: Interesting part of this, and I think unless I’ve read this incorrectly, but the second highest group that had that sentiment was 65 plus year olds. Is that right?
Vanessa Stoykov: Yeah, it is. That’s exactly right. And what that tells me is the baby boomers know that they’ve made most of their wealth off property and free university education and a good medicare system and a good pension system, but most of them can see it coming that it won’t be that case for when their kids get to their age.
Kevin Turner: Doesn’t it come down to education? I think one of the pillars that you talk about in creating wealth is that the lessons you learn from your parents and some of the lessons we can teach our kids is how to save, how to invest wisely.
Vanessa Stoykov: Exactly. Well, it’s all about education, isn’t it? And if kids see that there’s a purpose behind saving and a purpose behind investing. Then they’re more likely to do it. But in the economy of, I want it now. If kids think that they want because other people have got it. It becomes very hard for them to understand. Putting away for later makes Sense.
Kevin Turner: Well I know from my own experience we had to sacrifice a lot to get the wealth that we have today. I’m just wondering why we should continue to have to sacrifice.
Vanessa Stoykov: Well this is right. I mean my father was an immigrant who came here with literally the clothes on his back. And then he worked in a coal mine to make sure his three kids got to university. So he sacrificed a lot to get us to where we are. And my husband and I are always thinking about how much we’re going to sacrifice for our three boys.
Kevin Turner: Yeah, I mean we’re prepared to sacrifice, we’re prepared to support them and we have done. But you wonder how far that needs to go. How do you go about … What are your suggestions for having these conversations with the kids?
Vanessa Stoykov: I think it starts around the dinner table. I think money is a real taboo in our society and no one really wants to talk about it. So having conversations around the dinner table, even things around debts, around the evil of credit cards, around paying certain things in cash when you can afford them. And starting those conversations young and having it to be an open conversation rather than we don’t talk about money at the dinner table really helps because that gets them to understand right from wrong and which way to go.
Kevin Turner: The five pillars that I briefly mentioned, the time, desire, action, belief and focus. Does any one of those stand out as a stumbling block that you can see with people more than others?
Vanessa Stoykov: Desire is a big one. I just walked out of the shopping mall, just then and we worship in the mall nowadays. So wanting thing is a massive stumbling block in our society, because the consumption of things rather than the investment of things drives people into debt. And one in six Australians are in more debt on credit cards than they’ll ever pay back according to an asset report that just came out. One in six people have more debt than they can pay back. That’s outrageous.
Kevin Turner: That requires a bit of focus, isn’t it? I mean, you’ve got to be determined to cut back on that debt and if you really focus on it, it’s not too hard to do, to be quite frank.
Vanessa Stoykov: Well, it’s just, it’s persistence, isn’t it? That’s why I wrote this book, The Breakfast Club 40 Somethings because I tried to use fiction and storytelling to show the effects in people’s lives of the decisions they made over the years. Because it’s very hard for people to see 20 years out what could happen if they don’t prepare now. But if you can read stories about other people and how it turned out, you can kind of go, “you know what, I actually want to be a bit more prepared than that. I didn’t want to have to work till I’m 75 because I can’t afford to retire.”
Kevin Turner: Making that commitment and having a plan too. I think in helping the kids, I think we can sort of demonstrate what they should be doing by example as opposed to just words.
Vanessa Stoykov: I agree. Well, that’s do as I say, not as I do. That doesn’t really work as a parenting role, unfortunately.
Kevin Turner: Great Book. It’s called The Breakfast Club For 40 Somethings. I’ve been talking to the author. It’s available at all major bookstores as well as Big W. it’ll set you back $25.95, but it’s a great investment. Vanessa thank you so much for your time. It’s a pleasure talking to you and I look forward to having you in the show again more regularly.
Vanessa Stoykov: Wonderful. Thanks for having me.