In Radio 4′s episode on Money Matters on Wednesday, as part of their Bringing Up Britain series, Mariella Frostrup discussed with her panel of guests their tips on how to talk to kids about money and also, importantly how much they should talk to children about money.
Emma Foster from The Personal Finance Group which is spearheading the push to get more financial education into schools, made the point that we shouldn’t be frightened about talking about money . It’s fair to say that children are the first to surprise you as to how advanced their understanding is of things (!) equally, we want kids to be kids right? So what do they need to know?
Starting a conversation
Dr Elizabeth Kilbey who is working with the Money Advice Service argued that we should start having conversations about finance earlier than you expect – children as young as two are experiencing money related things when they see you making a transaction at the shops.
That’s not to suggest that you need to sit down with your kids and turn them into bankers aged 2 of course but it does mean that if they are at the supermarket with you or even posting a letter, you have the opportunity to start explaining what you are doing. As your children’s comprehension of the environment around them broadens, you can then start explaining how things work – whether thats how debit and credit cards work or how banks keep money. Simply getting them to hunt out the bargains in the Supermarket can be a great way to get them thinking about value and there are some top budget busting game ideas here >
Reward Charts, weekly pocket money amounts or encouraging your kids to earn some cash through jobs are all popular ways of progressing a child’s understanding of cash. However we strongly believe that teaching your kids about money doesn’t have to be expensive – budgeting games, rewards and helping you with your normal weekly shop will all help broaden their experience and understanding. If you do want to give them some money, start small – if they learn to look after the pennies, they will be in a much stronger position to deal with the pounds when they come along!
Talking about your own finances
Another interesting strand to the discussion on Radio 4 was how far you go talking about your own finances with your kids. This is especially topical with families feeling the pinch. Should you be “hush hush” in front of the kids or tell them about your finances? Elizabeth Kilbey made the important point that as we all were, children are perceptive, whether thats in the home or watching the news. Therefore, telling your kids you have a mortgage, explaining how you budget for electricity, whether you save or not will all help children put things into context. That doesn’t mean you need to tell them amount the sums involved of course – just how it works!