How early can you teach your children about money?
June 18, 2019 - 2 minutes read
Posted by Claire Parker
When did you start learning about money? Was it from a young age or was it something you had to learn on your own? Many parents admit that teaching our children how to manage their finances is one of the most valuable lessons a child can be taught. However, according to a recent study by Satander bank, within just two generations, the number of parents teaching their children about finance has halved from 26% to 13%.
Financial education is still a relatively new entrant on the national curriculum. Having been introduced into teaching in 2014, schools are still working to find the expertise and resources to allocate the subject, as a study by AXA found that only 47% of children say they are actually learning about money at school. Financial education doesn’t necessarily have to be confined to the classroom, though, as there are plenty of small steps you can take from day one to teach your child valuable lessons that will benefit them for years to come.
So when should you start?
Some parents believe that the average child begins to understand the value of money at age 10. They recognise that money is not an infinite resource and that it is earned through work. There is disagreement, however, with some parents arguing that children begin to understand money much earlier than 10, some even saying that children begin to recognise its importance and purpose from the age of 5!
What lessons can you teach them?
As your child gets older, you’ll be able to teach them more and more about finance and the way money works. By adopting a gradual teaching approach, you can help your children develop good financial habits. Here are a few age based tips about when and what to teach your child:
Aged 0-5 – Opening a Junior Isa is a great way to kick off your child’s learning. Not only will you be able to invest in your child’s future with better interest rates than adult Isas, you’ll also be able to begin to get them used to saving money towards the future.
Aged 5-10 – Chores, chores and more chores. By letting your child earn their own money, you’ll be able to teach your children the value of money and the concept of earning your keep. With your child earning from odd jobs, it’d be a great time to open a savings account (available from age 7); this way they’ll be able to save and manage their own money and learn a few lessons about spending.
Aged 11-15 – Speak to your child’s secondary school about what resources they use to educate your children about finance. You can also encourage your child to save towards bigger goals. Do they want a new games console or item of clothing? Find something that they want that will take a few months of saving to purchase, and encourage them to stick at saving.
Aged 16-18 – With the university option looming, it’s worth at this point talking to your child about debt. Be that long-term, manageable debt or short-term expensive debt, developing their knowledge about the different types of debt can help prevent them from taking unmanageable financial risks in the future, and therefore help secure your peace of mind.
For more information about how to help prepare for your child’s financial future, don’t hesitate to send us a message.