The relationship between children and family finances

Before Christmas I had dinner with a group of bloggers and some of the team from Voucher Codes. We were talking about children and family finances as Voucher Codes were doing some research to put together a white paper. It was an interesting discussion, but what I thought would be more interesting than just me telling you about it would be to get Bee to read the report and give her opinion from a grown up child perspective. I told her she could be as honest as she liked, I wouldn’t stop her pocket money.

Over to Bee…

Recently Voucher Codes put together a white paper on the relationship between children and family finances. The paper combines data, expert opinion and the informed judgements of parents to form a view of how children feel about family finances. After a survey of 1000 parents and 1000 5-16 year olds, some statistics came to light on the subject.

“So what if kids worry about money? It’s nothing to do with them.” 

In all honesty, I didn’t see it as much as an issue to start with. “So what if kids worry about money? It’s nothing to do with them.” was my first reaction. But children do need to learn about family finances at some point because eventually they will have to deal with them. I guess if they really are worrying about money from such a young age that can’t be very nice for them if they don’t understand how money works.

One of the statistics from the report highlights that 12% of 5-10 year olds and 37% of 11-16 year olds feel negatively about money. But doesn’t everyone really? I’m sure only about 1% of ten year olds in the world wake up and think “yippee! I have all the money I could ever want! Life is fabulous!” The rest of us think somewhat negatively about money and some people swear that money is the root of all evil. Personally I think it’s more the people who want/have the money, not the actual coins themselves. But there you go.

Family finances - talking to children about money

While a third of parents say they’re open with their kids about family finances, another third completely avoid broaching the subject of money with their kids, and 11% think family finances are none of their children’s concern. Now I do think that at a certain age, parents should start teaching children some things about basic budgeting and saving. Maybe they should get them one of those kiddy bank accounts with the free stress pig or something, but I don’t think its necessary for children to be CCed into some kind of family finances spreadsheet every week. My Dad wouldn’t even tell me exactly how much he earns when I had to apply for my student loan. What a man of mystery.

“Don’t argue in front of your kids, because obviously it makes them upset and that’s just mean.”

Another statistic showed that 16% of children claim they’ve learnt about their family’s money situation by hearing their parents arguing about money when they’re not aware their child is in earshot. Now unless your child has its own house to live in, I’m pretty sure they’re always going to be in earshot if you’re having a massive row. That ones pretty avoidable. Don’t argue in front of your kids, because obviously it makes them upset and that’s just mean.

I probably have slightly naïve opinions on the subject because I never worried about money as a kid. Money doesn’t really matter to me in general. I think it boils down to trust. Kids have to trust their parents that they are being sensible with the family finances, no matter how much money they have. At the end of the day, it’s the duty of the parent to have an age appropriate conversation with their child on any issue they may come across. When it comes to money, if anything it’s the kids that lead the parents astray. Parents will literally let you put anything in the trolley if you catch them at the right time of day.*

Do you talk to your children about the family finances? At what age do you think it’s appropriate to start talking to kids about money?

Photo credit – Mukumbura.

*This is very true. Bee is excellent at judging this.

12 comments on “The relationship between children and family finances

  1. Simon Howes says:

    It’s a difficult one. My daughter is five and we are already trying to teach her the value of money, admittedly in fairly abstract terms. A recent example would be when she asked if we could have take away for dinner over the weekend. I explained to her that take always were a treat and at the moment we are saving our treat money for our trip to Scotland at half term. She is also starting to understand that. Mummy and Daddy’s work is how we earn the money for things.

    • admin says:

      I think that last point is important – the idea of where money comes from. I’ve always found that useful – I work from home and my kids have often complained about me having to work, so it’s helpful for them to understand WHY I work, and that it means we have somewhere to live, things to eat and can go on outings.

  2. Jo Cormack says:

    For me, the challenge is teaching about money without making your children anxious, I say to mine ( in a not worried, matter-of-fact kind of way) Can’t buy you x, y or z until I’ve saved up, or until next month, etc. I think this is really valuable in terms or raising them with the necessary life skills for the big, wide world… Arguing in front of kids about money, or giving them a sense of genuine anxiety about it, is a whole other thing however.

    Loved this post – very interesting subject.

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    • admin says:

      Thanks Jo, glad you liked it! You’re right, it is a very difficult balance between educating them but not scaring them or making them anxious.

  3. Kathie Auton says:

    I agree with the comment above – an awareness of money but without a panic. We try to say things like ‘aren’t we lucky’ when we do things that are treats, it’s not a direct reference to money, but still emphasises that some things aren’t ‘everyday’. We also do just say if things are too expensive or if we can’t afford them – might be a bit of a blunt stick, but at least my kids have no expectations of being bought expensive stuff. We also say if we are saving up for something – saving has to be a good concept to learn.
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    • admin says:

      I think saving is definitely a good thing, and something I’m not really very good at. It’s not that I buy on credit or anything, it’s more that I either just do or don’t buy something, depending on how much money I have. I’ve never been very good at long term planning!

  4. I have three boys that I desperately want to learn about managing money. There is little if nothing out there that is savvy, technology driven, fun and relevant so I have spent two years creating something myself.”Qwiddle” I want my boys to learn the value of money, to be able to set goals for things they really want, avoiding the temptation of impulse spending but to be able to do this using modern technology something they are native too. I want them to be able to make choices on spend, for example to wear designer trainers if they want to so they need to understand the sacrifices or to- work a bit harder, we set jobs and chores to help with this. We do need to let children have a go but with supervision. Qwiddle helps generate great conversations about money.

    • admin says:

      Hi Vanessa, thanks for sharing Qwiddle! It’s a really goo point about making money fun – doing things like budgeting and accounts has a reputation for being really boring, which is why we often avoid it, so if we can make it somehow more interesting then that has to be a good thing.

  5. Nikki Hayes says:

    People always get that quotation mangled – it should be “the love of money is the root of all evil” not “money is the root of all evil”. As you said, money is not inherently evil ;o)

    • admin says:

      Aha! Bee was right then – it isn’t the actual coins ;-) It’s only a few words but it makes a huge amount of difference to the quote doesn’t it?

  6. Generally trying to teach ours that if you have x y and z everyday then you can’t have a big thing at the end of the week. Generally buying lots of cheap rubbish / sweets means you can’t have a nice holiday in the Summer and so on… AND she uses her tooth fairy money for buying things at the school sale … It’s a very important subject to learn I think….

  7. iriswood says:

    My Son is 6 i am trying to teach him value of money. He love to wear new clothes. So how should i handle him?

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