Scott Pape: The Barefoot Investor on how we should talk to kids about household finance

**Aleda** (0:03)
I was fortunate enough to be joined by Scott Pape on an earlier episode of the podcast, which we'll link to in the show notes. So after you've listened to Scotty Pape's take on the current situation Australians are facing in their financial lives, I highly recommend you go back to the first conversation we had with Scott, where he tells the story of his journey to become the barefoot investor, and his impact on personal finance in Australia. It's a remarkable story.
Talks about the importance of teaching financial literacy in schools, and where the Department of Education has got it wrong. His decision to give away his business and instead provide financial education for free as a TAFE-trained financial counsellor. It's an incredible contribution. His passion for supporting and training small businesses. He refers to small businesses as the backbone of the country. So I encourage you to go back and listen to the original episode with Scott Pape, the barefoot investor. But first, I know you're going to get so much out of this update with Scott Pape, where he talks about his work, again, as a financial counselor for Australians who are struggling to find a way to put a roof over their family's head and to get healthy meals on the table. He also addresses the sneaky tactics of superannuation funds and tells us what we need to do to stay in control of our own super. And he puts forward his unique approach for how best to talk to kids about the household budget. It's incredible people like Scott Pape, the barefoot investor, who inspire our work at Alita. I'd love you to check out our signature program, Alita Connect. Go to alitacollective.com and have a look at our program. We curate groups of five to six leaders around the globe to come together, to learn, to share, and connect. We'd love to get you involved in one of our programs, Book a Discovery Call today. Big thanks as always to Tempa and Jason Nicholas, their team at Tempa Australia, New Zealand, for supporting conversations like this with Scott Pape.
If you haven't invested in a mattress like Tempa, it's a mattress like no other, I encourage you to check it out today.
Scott Pape, the Barefoot Investor is a great champion for helping Australians manage their financial wellbeing. He volunteers his time to support Australians in financial distress, lobbies governments to support better financial literacy for our kids.
Very passionate and proud father of four, who lives on his farm in country Victoria, where I'm talking to him from today. Pape, thanks for joining me for a second time. It's the first time I've circled back around to a guest on this podcast for a second time. I love catching up with you. I really appreciate you joining me today.

**Scott Pape** (2:31)
Thanks, Darcy.

**Aleda** (2:32)
Now, the cost of living crisis, I want to start there, Pape, it's real. Can you give a sense of just how tough it is out there for the average person today?

**Scott Pape** (2:40)
Well, that's a really interesting point. What is the average Australian? I mean, we saw with the phase three tax cuts, people on $200,000 a year are saying, we're doing it tough, everyone's doing it tough. I think that the problem is, is that most people hang around with people on the same income as them. I've got a bit of a unique insight because I actually help people who are really struggling. So, single parents, you're in lots of debt, and often I'll sit there and talk to them about a budget where we're trying to make 10 bucks stretch. We're talking about putting food on the table for their kids.
So, I guess the insight for me is, when I hear about the word cost of living, what I think of is housing, right? That is the number one thing that is the issue in Australia right now. If you've owned your house for about five years, generally speaking, you're doing okay, because the housing prices, as we all know, have gone up, you've built up a bit of equity. That's not to say that you're not struggling day to day. We know most Australians are struggling day to day, especially if you've got kids in private school and all those sorts of things. But generally speaking, that big, big block of owning your own home and having some equity there, you're doing okay. It's the people that have just bought their home in the last, say, three to five years, that have caught those 13 rate rises that we were never supposed to get.
And it's those people, especially, who are renting that are really struggling right now. I mean, rental affordability is the worst on record. They say it's at a crisis when it's one, one and a half percent vacancy rate. We're at.8 of a percent right now. So if you're a single parent, or if you're earning the average income, what we are finding, I was reading a report that basically said there's almost zero properties that are considered affordable for the lowest income, the lowest 30% income. So if you're in that situation, that is where cost of living is really biting. If you're a single mom, and you've just been told that your rent's going up 200 bucks a month, that is a crisis. That is what we're seeing. Yeah, so for me, if I'm looking at the cost of living, I think housing.