Let’s talk about thrift , baby
WHEN IT COMES TO MONEY, START ‘EM YOUNG ADVISES VICKY SHAW
ACCORDING to new research, children as young as four can pick up vital moneyney skills
Money skillskills are a vital part of everydayy life – and new research underlines why it pays to start learning from an early age.
Research by the Governmentbacked Money Advice Service (MAS)S) found that children whose parents involvedved them in discussions and deci-decisions about money, andand allowed them to experience using money from as young as four, are more likely to develop vital financial skills.
These skills can have a big impact on their ability to save, budget and plan ahead financially well into their adult life.
Kirsty Bowman-Vaughan, a children and young people expert at the MAS, says parents shouldn’t be afraid of starting money conversations from an early age – as that’s when they can have the most impact.
She says: “We know that parents might feel as though they’re protecting their children by not talking to them about money, yet helping children to understand how to save and handle money is one of the most important things parents can do to ensure their long-term financial security.”
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 – typically around £53.65. Those whose parents included them in money discussions were likely to save an average of around 20% more than this, the research found.
Young people in this age group whose parents decide how they spend their money were also nearly five times more likely to say that borrowing money didn’t bother them – even if they had no plans to pay it back – at 19% against 4% who make spending decisions on their own or with their parents.
The MAS says parents have a key role to play in helping their children learn the basics of money management. Nearly three-quarters (74%) of children say they talk to their parents about money.
But a quarter (24%) of parents surveyed thought they should wait until their children were in secondary school before teaching them the importance of saving.
A further 31% of parents of 16 to 17-year-olds say they don’t set and stick to money rules with their teenager. And 17% rarely or never speak to them about the risks of getting into debt.