What’s your earliest memory of money as a child? Maybe it’s your first paper round or saving up birthday money for trainers. From an early age, you formed a relationship with money that carried on into your adult life – and your children are doing the same.
Money is often a taboo subject. 39% of UK adults admit to having little confidence in their ability to manage their money and we believe it’s vital to educate your children in financial matters to give them the knowledge and tools to make good choices.
Whether you talk about it or not, your kids are soaking up your habits and attitudes, so you have an opportunity to shape their future in a positive way if you start now.
So, how can you support your child’s financial education and encourage them to form a healthy relationship with money?
Our latest blog explores this subject and offers practical tips to guide your youngest family members towards a brighter future.
What age should I start teaching my children about money?
It’s never too early to start teaching your children about money.
A study by the University of Cambridge revealed children as young as three are able to grasp basic money principles.
But if you haven’t addressed this yet, don’t worry – because it’s never too late (or early) to start.
As supporters of your financial wellbeing, GMB Credit Union is here to help you build on your knowledge and make good choices that safeguard your family’s future.
So, we encourage you to extend this financial education to your loved ones to help them go on to make smart decisions, take responsibility, and prepare for a happy future for themselves and their future families.
Follow our practical tips on talking to your children about money – the ultimate parent’s guide to financial education for kids.
How can I help my children have a good relationship with money?
In a previous blog, we talked at length about how (and why) to help your children form good money habits to take with them into adult life. You can catch up on that blog here.
Here, we’re going to share tips about talking to your children to build the foundation for strong financial futures.
You might remember your parents’ generation being mysterious and guarded about finances, which may have affected how you approach and discuss money.
Subjects like salary and savings may well have been off-limits, but today we’re moving towards more openness, which is something you can encourage in your children.
Start open discussions about money with and around your children to normalise the subject and take away shame or secrecy – just remember to keep it age-appropriate and meet them at their level rather than overcomplicating things and causing them unnecessary worry.
This will encourage them to talk, ask questions and seek out support if they need it in later life.
Don’t make assumptions
Knowing as much as we do, it’s easy to forget how black and white the world can seem to young eyes and ears.
For example, do your kids understand you work for the money that allows you to tap your iPhone at Tesco or heat your home?
You can see why children might assume there’s endless free money inside mobile phones and bank cards without associating it with the work we do to earn it, especially in the world of online payments, contactless, and buy now, pay later.
So, start with the basics and make sure they grasp how you earn your money and what it pays for – from the roof over their heads to the food in the fridge.
Discussing the foundations of finance will keep them grounded and ensure they understand the value of money, rather than taking it for granted.
It’s never too early to invite your little ones into big and small money decisions. Next time you buy something, whether it’s a box of cereal or a new television, chat to them about the options and the pros and cons of each.
For example, is the cheapest option the best, or are there other things to think about like size, quality, taste, longevity?
Bringing them into the conversation will make them feel a part of your family’s financial world and create good habits to take through life.
Wants vs needs
It can be easy for us to convince ourselves we “need” certain things when it reality, they are wants – and this is a fantastic teachable moment for your children.
Understanding the difference between essentials and desirables is crucial for them to value money and avoid overspending and debt.
The classic Martin Lewis motto is always useful:
Do I need it? Can I afford it? Will I use it?
Non-judgemental conversations involving these questions are a great way to guide your children towards sensible decisions.
Did you know 34% of UK adults have either nothing or less than £1k in savings?
If you’re one of them, you might feel saving money isn’t possible for you at the moment, but we can help you set achievable goals to start small and build up slowly, wherever you’re at financially.
Talking to your children about saving money can start from a young age, whether it’s physically in a piggy bank or virtually through a junior savings account.
In the fast-paced world of instant gratification, normalising saving helps your children with patience, goal setting, and long-term thinking.
Weigh up your words
Children take your words at face value and often don’t understand the nuance of language, so a simple comment like “I’m skint” or “this will bankrupt us!” could cause needless anxiety for young ears.
Reassure them and protect them from any financial stresses while explaining the words you use and what they mean about your family finances.
(Don’t forget – if you are worrying about money yourself we are always here to talk, listen, and advise).
Here for your family’s financial wellbeing
Your credit union is here to support you and your family towards financial wellbeing at every stage in life.
Talk to us – you can get in touch here or via Nivo – we are here for you.