Advice on shelling out

Published: Saturday 21st March 2015 by The News Editor

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Why not teach children the value of nest eggs while you’re handing out the Easter eggs?

Easter holidays means spending more time with the kids, which could also mean time to spend talking to them about money.

It might not sound all that fun, but it’s crucial you crack on with it.

Research suggests that children’s money habits start early – as young as seven – with parents being a strong influence, and yet nearly half of parents don’t regularly talk to their children at at all about finances, according to a new survey from the Government-backed Money Advice Service (MAS): only 52% of parents it surveyed said they have regular money chats with their children.

The main reasons we feel uncomfortable talking to our children about money are a general sense of awkwardness, because we didn’t have those kinds of conversations with our parents when we were children, and a feeling that children shouldn’t have to worry about money.

But perhaps it’s time to think of money conversations less as burdening our youngsters with money troubles and more as a way of arming them with key skills for financial survival.

So how should you go about it?

Firstly, by starting young. Of the 2,000 parents surveyed, the age when they first started talking to their child about money was most commonly eight years old, the age that they start receiving pocket money. But previous research by the MAS, an independent body set up by Government to offer money tips, has found that children start to form their money habits at around seven.

It also appears there’s something to be said for giving your child pocket money regularly, rather than £10 one week and nothing the next. A lack of consistency over pocket money could make it harder for children to understand how to manage money and stick to a budget, according to the findings.

Giving parents some encouragement, child psychologist Elizabeth Kilbey says: “Having tough conversations with your children is part and parcel of being a parent and money can be a subject many find particularly hard to cover, especially if it is an area which they struggle with themselves.

“One of the key reasons for many parents is that they feel children shouldn’t be burdened with adult responsibilities, like worries about money.

“But it can in fact be very empowering to give your children skills and confidence with money.”

So how can we be better at talking to our children about money?

Here are Dr Kilbey’s tips:

:: Subtly integrate money. You don’t need a big money chat to raise the idea of good money management. When you go shopping, encourage your child to choose between two items so they understand they can’t have it all.

:: It’s never too young to start. Children shouldn’t have to worry about the family finances but they can still be helped to understand about money without needing to know about this.

:: Be confident. Help your children to develop positive, beneficial financial habits.

:: Have a go. You may not be a maths whizz yourself, but money is a very hands-on, practical subject. Encourage your child to handle money, such as when you give them pocket money. Younger children can also benefit from “playing shop”.

:: It’s fine to make a few mistakes. It is far better to allow children to make mistakes with small amounts of cash now than have them facing bigger money problems when they are older.

Copyright Press Association 2015

Published: Saturday 21st March 2015 by The News Editor

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