I have always discussed money and savings with the children as I believe it is important to learn from young the need to save. The children have money boxes of their own and we give them pocket money as well as money for doing chores around the house. I also believe that money has to be earned to know the value of it.
I was quite surprised to learn that over half (58%) of the parents in the UK find it hard to talk to children about money matters, according to new research from the Money Advice Service.
A lot of them avoid the conversation citing reasons such as they shouldn’t have to worry about money or feel awkward discussing money with their children or that their parents didn’t give them any money advice.
Many parents are leaving it too late and talk to them about saving when they are nine. However, a previous academic study commissioned by the Money Advice Service and compiled by academics at the University of Cambridge demonstrated that children begin to form money habits by age seven**, meaning parents are generally leaving it too late.
Even my 3 year old has her own money box and she knows that when she gets money she puts it straight into the box. I think I have trained them a little too well. When they find the stray coin lying around on the table they are quick to grab it for their money box.
I like to think that by talking to my children from a young age about money, I am instilling in them the responsibility of being careful with their spending in future and giving them good money habits. I also know that by making them earn part of their money by helping around the house, I teach them that money is not something that is easy to come by and has to be earned. (Yes, I’m a tough mum!)
Here are some top tips from child psychologist Dr. Elizabeth Kilbey about talking to children about money –
Five Tops Tips from Dr Elizabeth Kilbey on talking money with your children
1. Subtly integrate it into your child’s life. You don’t have to have a big ‘money chat’ to bring up the idea of good money management. When you go shopping for example, encourage your child to make a choice between two items so they understand they can’t ‘have it all’ or explain to them that whilst two products are very similar, one is cheaper and it can be sensible to go for that one.
2. It’s never too young to start. My own experience backs up the Money Advice Service’s academic study which shows that money habits begin to be developed prior to the age of seven. Children shouldn’t have to worry about family finances, but you can help them understand money without doing this.
3. Be confident. This is your opportunity to help your children develop positive, beneficial habits. Even if you aren’t the best at money management, you will still have lots you can pass on to your children.
4. Have a go. Money is a very practical subject and children can be very hands on learners. Find ways for your children to handle and use money whenever possible and having pocket money can be a great way of doing this. In younger children, role play can be used – for example playing ‘shop’ using pretend money.
5. It’s okay to make a few mistakes; it’s how we all learn, and that applies to money as well. It’s far better for children to be making mistakes with little or no consequences than them facing bigger money issues when they are older which could have a bigger impact.
To find out more about helping children to understand money www.moneyadviceservice.org.uk
Do you talk to your children about money? Leave a comment below as I would love to know if you find it easy or difficult or you have any tips of your own.
Disclaimer: Collaborative post