It may seem a little much to be teaching young children about money and it's value but I think it's important to make them aware of certain things at a young age and hopefully they'll avoid getting in to difficult financial situations as adults.
According to child psychologist Dr Elizabeth Kilbey:
“Having tough conversations with your children is part and parcel of being a parent and money can be a subject many find particularly hard to cover, especially if it is an area which they struggle with themselves. One of the key reasons for many parents is that they feel children shouldn’t be burdened with adult responsibilities, like worries about money. But it can in fact be very empowering to give your children skills and confidence with money, so that they don't have to face money worries in the future.”
Five Tops Tips from Dr Elizabeth Kilbey on talking money with your children
1. Subtly integrate it into your child’s life. You don’t have to have a big ‘money chat’ to bring up the idea of good money management. When you go shopping for example, encourage your child to make a choice between two items so they understand they can’t ‘have it all’ or explain to them that whilst two products are very similar, one is cheaper and it can be sensible to go for that one.
2. It’s never too young to start. My own experience backs up the Money Advice Service’s academic study which shows that money habits begin to be developed prior to the age of seven. Children shouldn’t have to worry about family finances, but you can help them understand money without doing this.
3. Be confident. This is your opportunity to help your children develop positive, beneficial habits. Even if you aren’t the best at money management, you will still have lots you can pass on to your children.
4. Have a go. Money is a very practical subject and children can be very hands on learners. Find ways for your children to handle and use money whenever possible and having pocket money can be a great way of doing this. In younger children, role play can be used – for example playing ‘shop’ using pretend money.
5. It’s ok to make a few mistakes; it’s how we all learn, and that applies to money as well. It’s far better for children to be making mistakes with little or no consequences than them facing bigger money issues when they are older which could have a bigger impact.
To find out more about helping children to understand money www.moneyadviceservice.org.uk