Why should you talk to your children about money?
We take away much more of what we learn from childhood than we think – mannerisms, habits, including those household chores we all hated as teenagers!
These lessons stand us in good stead, but there are often gaps in this knowledge. For example, did your parents ever speak to you about household finances? If not – would you feel more comfortable managing your money now if they did?
If the answer to the last question is yes, maybe you should consider adding finances to the life lessons you’re teaching your children. Paul Darley, Managing Director, talks us through why an early introduction to finances is so important and how you can approach it…
Is this gap in knowledge a cause for concern?
I think we can all agree that when you first become financially independent, decision making can be extremely daunting.
Sadly, many children don’t get any significant financial education, whether this be at school or at home.
The Money and Pensions Service (MaPS) found that just 47% of 7 – 17 year olds had been given meaningful education about handling their finances. That means that millions of young people are missing out on much-needed guidance and support.
It’s also true that children from higher income families are generally more educated on the matter. This is concerning as it means that the wealth gap we see today may well continue for future generations.
However, it doesn’t have to stay this way. Even if we just start by teaching the basics, such as household budgeting, using a bank account, and putting money into a pension, we’re giving young people their first chance at being financially responsible, as well as giving them an understanding on why it’s important to save.
How can we change this?
This doesn’t mean sitting them down and taking notes as if you’re in school. You can do this by simply getting them involved in everyday tasks such as budgeting when you’re doing the weekly food shop, or setting up saving pots for a big day out. This helps them get to grips with the basics and understand from an early age what drives your decisions.
If you’re unsure yourself, there are plenty of free services out there, including Pension Wise and Citizens Advice.
Money Helper is also a great place to look for guidance and they have written an article detailing the ways you can speak to different age groups about money.
Alternatively, you could always speak to a professional financial planner – like us!
If you have any questions about managing your money, please don’t hesitate to get in touch.
