Shut Up and Be Financially Capable


Financial Capability is putting the theory into action, it is the financial behaviour.

As a mom, I tend to go on a bit and the blank stare from my son tells me it’s time to shut up. So in my case, less talking and more action is the best teacher. It also wastes less time. My son will learn better from seeing me doing the stuff as opposed to just talking about it.

financial education is the theory which of course is the foundation of all skills and is important. But without actually putting this theory into action, a financial education is not that much use.

Financial capability is about :

  • financially responsible behaviours such as saving before you spend, saving/investing for retirement, mindful conscious spending, understanding the difference between needs and wants, understanding the ins-and-outs and ups-and-downs of investing and creating passive income streams.
  • Informed educated financial decisions such as do I understand the long term implications of taking out this loan, do I understand the interest rate and terms trade-off, do I fix or float my mortgage, is this a want or a need and do I need it now?

Financial capability will give our kids the following for their adult toolbox :
1. Skills needed to manage their money independently on their own without assistance/guidance from family and friends.
2. The understanding of financial principles and financial concepts such as interest and compound interest and spending less than they earn.
3. Understanding inflation and the buying power of their money, savings and investments. Are the returns on their savings and investments keeping up with or beating the rate of inflation?
4. Understanding their net worth and knowing that this a way to measure their financial health. Net worth is assets minus liabilities and of course changes due to continuously changing life stages and circumstances.
5. Understanding the concept of liquidity – how easy it is to convert assets to cash. Cash is the most liquid asset as it can be used easily and immediately.
6. Knowing what questions to ask themselves and a lender when considering taking out a loan.
7. Knowing that hard work, effort, time, education, patience and slog is the way to get what they want out of life.
8. Our children will know they have options and choices and opportunities are out there if they want them and know what to look for.
So, my role as a mom is to give my son every opportunity to learn from me as I make informed financial decisions and carry out financially responsible behaviours.