Money skills are a vital part of everyday life – and new research underlines why it pays to start learning from an early age.
The Government-backed Money Advice Service (MAS) found that children whose parents involved them in discussions and decisions about money, and allowed them to experience using money from as young as four, are more likely to develop vital financial skills.
The MAS found children who didn’t have a say in spending their own money were less likely to save.
When 12 to 17-year-olds were asked how they would use £100, those whose parents decide how their money is spent were likely to save the smallest amounts, while those whose parents included them in money discussions were likely to save an average of around 20% more than this.
So how can you start a conversation about money with your child?
* Give younger children the chance to pay for items. Instead of buying treats during the supermarket shop, give them a set amount of money and explain to them that they can choose what they want, but when the money is gone, it’s gone.
* Include your children in discussions about bills. You don’t need to go into the full details of your finances, but give them an idea of how household finances are run.
Explain payments like direct debits. Frame it in a way they can understand – tell them the money is helping to keep the lights on, for example.
* If you give your children pocket money, encourage them to put some of it aside
It’s never too early to teach children the importance of financial skills as savings. Consider opening a savings account for your child and include them in trips to the bank or building society to build up their savings pot.
* Encourage young children to handle money, so they get used to the different coins. Include older children in conversations about online and mobile banking.