'A Dumb Newsletter' 🤨 + How Afterpay Makes $ + A 'Bratty Kid' Attitude

The money stuff that you wish they taught in school

You know when you’re in class and someone asks a question and you go:

• “Oh, I was going to ask that” or,

• “Oh, I didn’t have that question before, but now I want to know the answer to it”

That’s what this is supposed to be like (but with money stuff, not English or Biology).

The format of this newsletter is simple:

• 3 questions from teenagers and young adults like you (and my answers).

• Got your own question about money that you want to ask? Nice! You can submit it here.

• To find out why this newsletter exists (and a little about me), you can read the FAQs.

Now let’s get to your questions…

Your Questions & Answers

• Your Newsletter is Dumb

• A ‘Bratty Kid’ Attitude

• How Afterpay Makes Money From You

Your Newsletter is Dumb

Q. “My parents showed my your stuff but I don’t think I need it. I’m pretty close to the top of my grade at maths and money stuff is just maths.”

-Alvin, 15

Answer

Hey Alvin, thanks for writing in!

I was waiting for someone who was forced to read the Money Chats stuff because of their parents! I’m guessing that you rolled your eyes or had a quick read and thought it was all pretty obvious?

That’s totally fine. I guarantee that I would have done the same thing when I was 15.

You’re mostly right too. Money stuff is definitely closely linked to a decent understanding of basic maths.

But the thing you might not know is that plenty of people who are good or even great at maths get themselves in plenty of money trouble. There’s a few reasons for that. But part of it is that a lot of companies make money from lending money to people in creative ways.

So reading this newsletter every week might help you learn some things about the money decisions that you’ll face as you get older. Feel free to skim it and just read the questions from others your age or older.

And it might help you spot some of the subtle ways that companies try to get you to let go of your money (things like interest free loans, buy now pay later, split payments, credit cards, car loans).

So it couldn’t hurt to read this for a bit longer. Or don’t. You’re a smart kid, it’s totally up to you what you do!

A ‘Bratty Kid’ Attitude

“I get pocket money of $10. Others kids get way more. My parents say that I can get $20 but that I have to do chores. I’d rather game. Why can’t I just get the same pocket money as other kids?”

-Ciaran, 13, NSW

Answer

Hey Ciaran, thanks for your question.

You’re not going to like what I’m going to say to you. But here we go: honestly, what you’re saying makes you sound a bit of a brat mate.

What you’re doing is asking for more money for doing… nothing.

That’s not really how the world works. Actually, it’s not at all.

Money comes from doing work.

It sounds like you’re getting $10 for nothing at the moment. So I think it would even be fair for your parents to cut your pocket money to zero.

And as for those other kids? You probably don’t know what they do for their pocket money. Maybe they mow the lawn. Maybe they help their sister with her homework. Maybe they walk the dogs.

And even if they don’t do any of those things, it doesn’t matter. 

Your parents are trying to teach you a really good lesson that is going to be true forever: money comes from work. I know you’re probably a great kid and have plenty of awesome qualities. If you learn this lesson about work and money now, you’ll be way better off when you’re an older teenager and an adult.

Hope that helps (even if it might have been a bit hard to hear). 

How Afterpay Makes Money From You

[Ry’s note: I got a few questions about Afterpay this week so I’ve re-published this question from a few months ago here]

Q. “Is Afterpay free to use?”

-Jemma, 16, Qld

Answer

Hey Jemma. The short answer is ‘it can be, but not always’.

So, I’ll start with an explanation and then go through a short ‘worked example’ because I think that always helps to explain things better.

• Afterpay is a service that lets you pay for things you buy in 4 equal payments over a total of 6 weeks (that’s instead of paying for the whole amount ‘up front’ when you buy).

• You make the first payment when you buy (payment 1). Then you pay another chunk every two weeks (payments 2, 3 and 4) until you’ve paid in full.

• If you do it that way, and never miss a payment due date, then there’s no extra cost to you. You just pay the price of what you bought.

You start paying extra costs if you miss a payment. These can add up.

• If you miss one payment you get charged a late fee of $10. If you miss another payment, that’s another $10.

• Those late fees can keep adding up until they hit either:

  • $68, or

  • 25% of the cost of what you bought (whichever is less).

Worked Example 1:

Ella buys a pair of shoes worth $120. She uses Afterpay. She pays $30 up front when she checks out. Then she pays $30 on time, every two weeks until its paid off. She makes a total of 4 payments of $30. The total paid is $120.

Worked Example 2:

Ella buys a pair of shoes worth $120. She uses Afterpay. She pays $30 up front when she checks out. She gets busy with school (it’s exam time) and gets a bit distracted. She misses the due date of 3 payments and gets charged $10 each time. She still has to make the original $30 payments too.

Her shoes have now cost her $150 instead of $120 ($120 price + 3 x late payments of $10 each).

Worked Example 3:

Ella buys a pair of shoes worth $120. She pays for it with her savings (no Afterpay). That’s it. No chance of late fees or extra costs anywhere.

Hope that helps you understand how it works!

Thanks for Reading

You made it to the end! Congrats. I hope you got something useful from the newsletter this week.

Got your own question you want to ask? Can’t wait to hear it! You can submit it here.

See you next week,

-Ry

P.S.

If you know anyone who might also like the simple, practical way we talk about money stuff here (teenager, young adult or a parent) feel free to share the link below with them: