How to talk to your children about money

Research shows kids should be included in money discussions from the age of four

Parents and their two children eating at kitchen table

We're not having the conversation early enough. No, not the one about the birds and the bees. The one about money.

Parents are most likely to talk to their kids about money matters between the ages of eight and 15. But, according to Money Advice Service research, children should be included in money discussions from the age of four.

See also: How to invest your kids' pocket money

​​​​See also: How debt can affect children

And, if we don't start talking about it earlier, millions of young people are set to enter adulthood without the skills needed to manage their money and an increased risk of falling into life-changing debt.

How well do you know people attitudes when talking to their children about money? Find out with our quiz.

Kirsty Bowman-Vaughan, Children and Young People Expert at the Money Advice Service said "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".

Our research found children who did not have the chance to spend their own money were substantially less likely to save, compared to those who had been involved in money discussions.

Children aged 12 to 17, whose parents made their spending decisions, were nearly five times more likely to say borrowing money didn't bother them, even if they had no plans to pay it back.

This age group was also more likely to choose unnecessary spending over essential expenditure and are less confident managing their money.

You can read the full report here.

So what can you do?

  1. Give children the chance to pay for things from an early age, even if it's just some treats during the weekly shop. This way they'll learn the value of money and understand when the money's gone, it's gone.
  2. Include children in discussions about bills. This will give them an understanding of how household finances work and technical language like direct debits.
  3. Encourage children to set aside some of their pocket money so they can save up for something they really want.
  4. Open a savings account for them and save into it regularly. Make sure you include them in the process, by taking them to the bank branch and letting them know how much is in the account.
  5. Give children the opportunity to handle money and explain to them what it is and how it works.
  6. Let older children manage their money digitally by introducing them to online and mobile banking.

This article is provided by the Money Advice Service.

Vintage money-saving tips

Vintage money-saving tips