Research suggests parents should talk to their children about money from the age of four
New research by the Money Advice Service (MAS) that children who are kept in the dark about money management may have financial problems when they reach adulthood.
In fact, the research goes so far as to say that giving offspring the chance to make financial decisions at a young age could be as important to their future financial stability as starting a regular savings fund.
David Rodger, CEO of Debt Advice Foundation commented on the research;
“This report really demonstrates why we wholeheartedly believe in financial education for children.
“The report has found that the UK’s young people are set to enter adulthood woefully unprepared to manage money and are at an increased risk of becoming over indebted.”
The survey found that children whose parents allowed them to decide how to spend their own money were more likely to develop vital financial skills which could be used later in life, such as the ability to save and budget. Those whose parents included them in money decisions were likely to save an average of around 20% more than those who didn’t usually have a say.
What also emerged from the report is that 19% of children whose guardians chose how they spent their money said that borrowing money didn’t bother them, even if they had no plans to pay it back, only 4% of children whose spending habits were decided on their own or with their parents help felt the same way
Kirsty Bowman-Vaughan, Children & Young People Expert at the Money Advice Service said of the findings;
“There are many ways that parents can start to encourage their children to interact with money from a young age. 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.”