AS PARENTS and carers, we want our children to be ready for anything when they grow up, and this includes them having the skills and confidence to manage their own money one day.

According to a major new piece of research by the Money and Pensions Service, some four million parents (46 per cent) in the UK don’t talk about money matters with their children.

Our research shows that people’s money habits and attitudes start to form before the age of seven, and so it’s really important that parents start talking to children about money as early as possible.

From making decisions about grocery shopping, to working out how long it will take to save up for a new toy, football kit or a day out, there are so many different ways to help children start building great money habits early on. 

Why teach your children about money? 

While some parents feel they are helping their child by shielding them from the sometimes-tricky reality of household finances, it’s often quite the opposite.

Taking some time now to talk about money with your children will help them to understand the basics of managing a budget, paying for everyday items like food shopping, and how to save for a rainy day. This can have huge benefits when they get older and need to manage their own finances.

Another challenge is that many parents find it difficult to talk about money at all, especially if they’re not feeling particularly confident or in control of their own finances. But the good news is that if you talk to your children about money, your own financial wellbeing will benefit, too. 

It’s all about developing good habits 

Our research shows that the amount of money parents have does not determine how likely they are to open up about finances, with statistics remaining similar regardless of household income.

Instead, a parent’s own confidence in managing everyday money is key for them to open up about finances with their children. Parents who are very confident managing money themselves are twice as likely to have money conversations with their children than those who aren’t confident (58 per cent vs 33 per cent).

Tips on how to talk to children about money 

1. Lead by example 

There are activities you can do when you’re out and about to help boost your child’s money skills. For example, when you’re food shopping, take your children and make moneyrelated decisions out loud like why you chose the shop brand cereal over the better-known brand. And compare prices of items out loud or ask them to tell you the different prices of products.

2. Show them the whole picture 

If you pay by card, rather than cash, don’t forget to show your child that this is part of your money management as well. You might tell your child what your budget is before visiting a shop and then compare the balance with the actual expenditure so they can see whether you’ve been able to keep to budget. 

3. Encourage them to save 

It’s good for children to understand from a young age that sometimes you have to save money for things you want. You could start by asking them if there’s something they would like to save for and then help them come with up ideas to save money, such as turning off lights or buying fewer things, or see whether they could earn money through a paper round. Encourage them to manage the savings in a jar until they can afford to make the purchase. 

4. Use game power 

Many digital games are based on the player collecting tokens that allow them to progress through levels or to get extra features. Turn household jobs into a similar game, giving them ‘tokens’ they can exchange for rewards, such as their favourite treat or a snack.

Resources to get you started Our wider MoneyHelper website has lots of resources to help parents and carers talk to children of different ages about money.

A great place to start is MoneyHelper’s Couch to Financial Fitness programme. This has a dedicated section on how to take the first steps in opening up to your kids about money, with simple activities and tips to give them the best start.

We also offer a Talk, Learn, Do programme for parents and carers of children aged three to 17 years old, that shares fun ways to engage children in the topic. If you’re worried about money, or your finances have been impacted by the pandemic, MoneyHelper’s Money Navigator Tool can help you find a way forward and build back your money confidence, or if you’re worried about debt, the Debt Advice Locator Tool can help you find a free adviser near you. 

For free, confidential and impartial money and pensions guidance visit moneyhelper.org. uk or call 0800 138 7777.