Protecting children from money issues can have negative impact on finances in adulthood

Parents should start teaching their children about money issues from as young as age four, or risk having a negative impact on their finances in adult life, according to new findings.

Research conducted by the government-backed Money Advice Service suggests there is a lack of financial knowledge among children, and where this happens, many people enter adult life unable to manage their own money and are at a greater risk of financial insecurity.

A survey of 12- to 17-year-old children found that those who were taught about finances at a young age typically saved 20% more than those who were not.

 

Those without financial education are also more likely to borrow money without having plans to pay it back. It can also affect their ability to save, budget, and plan their finances in later life.

This lack of financial knowledge is one of the reasons Moneywise has launched its {‘Get Financial Education Working’ campaign} http://www.moneywise.co.uk/work-family/family-life/help-kids-to-learn-th... in a bid to encourage parents, guardians and family members to teach kids about their finances. 

The Money Advice Service also says parents need to step in and teach their children about money management. It found that while 90% of parents believe it is their responsibility to teach children about cash, many leave it too late.

Research suggests attitudes to money can be set from age seven, with parents encouraged to start talking with their children before this point.

 

‘Allow children to experience money and make decisions’

Kirsty Bowman-Vaughan, children and young people expert at the Money Advice Service – as well as a judge on our Personal Finance Teacher of the Year 2017 competition, 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 best ways to do this are through discussions, and allowing them to experience money and make decisions. That means talking to your children about money matters and letting them decide for themselves, in an appropriate way, how to spend money. Parents shouldn’t be afraid of starting to do this from an early age – that’s when it’ll have the most impact.”

Published: 04 April 2017
Last updated: 15 June 2017

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