William Thompson, Head of Consumer Banking NI, Bank of Ireland UK believes it’s time to teach our kids the facts of life…about money!
According to the Money Advice Service, over half of parents say they find it hard to talk to their children about money, yet 57 per cent* agree that they are the single biggest influence on developing their children’s money management skills.
There are a number of reasons why parents possibly don’t feel comfortable talking to their children about money – perhaps they didn’t get advice when they were young, or they don’t feel it’s necessary or a priority when there’s so much else going on.
Bank of Ireland UK works very closely with local charity Parenting NI who regularly come in and chat to staff about various parenting topics such as ‘raising your child’s self-esteem’ and ‘digital parenting’. However, they also offer great advice on teaching your children about money and how to help them develop healthy attitudes towards it, which I have found very helpful with my own family.
Start early: Talk to your children about money from an early age. Explain that you earn money by working and you need money to be able to buy things, but it runs out quickly if you spend too much. If they get money for Christmas or birthday presents, encourage them to save it for something they need.
Pre-teens: At this stage children are ready to learn how to keep track of the money they get and how to spend it wisely. Encourage children to save and think about opening a savings account for them. You can give them examples of things you save for within the family, such as holidays, a new car or home improvements. Encourage your children to talk to you about their spending choices and introduce the idea of budgeting.
Teenagers: Teenagers can be impulsive spenders, with lots of peer pressure from friends and media. It can be tempting to help young people out by giving them a bit of extra money for going out with friends, but instead suggest ways they could earn money through part-time jobs or chores at home.
Talk about future goals with young people and how saving now will help them be able to afford the things they want in the longer term. Alert them to the costs of borrowing and the responsibilities it brings.
Pocket money: Many parents will give their children a small allowance for completing household chores. This can be a great way of helping children manage money. The amount can vary depending on age and what you can afford, but it can help your child build a direct link between effort and earnings.
Get children Involved and teach them life lessons: Family life gives you lots of opportunities to teach good money habits, for example get your child involved in tasks such as the weekly shop as this will help them understand the value of money. Use ordinary household events such as paying bills to make children aware of adult responsibilities.
As your child gets older let them pay for things they would like out of their pocket money to teach them responsibility. To further develop financial capabilities and manage their own money, encourage them to open a bank or building society account.
Helping your children develop good habits like this will give them invaluable life skills which will see them through their young adult years and beyond – when lots of big financial decisions need to be made. If you are looking for any more advice on parenting issues or concerns you can contact Parenting NI on Freephone Tel 0808 8010 722
*Research conducted by One Poll for The Money Advice Service in March 2015 amongst 2,000 UK parents with children aged 11-18 years old.