No matter what the age of your child, introducing the topic of finance in daily conversations can help them gain confidence when it comes to money. Here are my top five tips on how to approach the subject with your children.
Conversations around money ideally begin during primary school. Starling Bank's "Make Pocket Money Equal" study found that the sooner children start being involved in conversations about money, the better.
Think about regular pocket money
If you can introduce pocket money, even in small amounts, this can have a big impact on a child’s financial literacy as they learn about budgeting through the act of saving and spending. Our study found children’s financial literacy is 25 per cent higher when they receive pocket money regularly – even if it’s 50p a time.
Involve your children in daily spending decisions
Think about taking your child grocery shopping with you as this is a great place to talk about the cost of household items. You can ask them to consider the cost of different products or brands, such as with breakfast cereals, and get their thoughts on where money is best spent.
Give your children autonomy with money
If your child does receive regular pocket money, or monetary gifts for birthdays, it can be tempting to dictate how they spend it – especially if your child wants to rush to the shops to spend it on sweets or throw-away toys straightaway. However, giving your child some autonomy will help them go through the cycle of spending and potentially regretting their choices, which is a valuable lesson for later on in life.
Get the whole family involved and play to your strengths
It’s important that financial literacy is not left up to one person. The best way is to get the whole family involved, including grandparents and other extended family. The different people in a child’s life can also play to their own strengths when it comes to discussing money. Some might excel at maths, while others are better at constructing concepts such as “value” and appreciating how much items cost.
Helen Bierton, is Starling Bank’s Chief Banking Officer and family finance expert