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Financial Education…

At the end of last year, I was invited as part of a focus group of bloggers to a discuss the findings of research into the relationship between children and family finances conducted by VoucherCodes.co.uk. Due to my rather tardy nature complications on the school run and hubby working late, my opinion doesn’t feature in their final report. This by no means suggests I don’t have an opinion, in fact it could well have been a blessing in disguise that I missed the discussion so my inclination to talk too much didn’t drive everyone else balmy whilst our dinners went cold – or at least I hope it didn’t because I did talk quite a lot at dinner too!

Some of the main findings of research which surveyed 1000 adults and 1000 children were…

  • 12% of 5 –10 year olds and 37% of 11–16 year olds admit to feeling negatively about money.
  • While a third of parents (34%) say they’re open with their kids about money, another third completely avoid broaching the subject of money with their kids, and 11% think family finances are none of their children’s concern.
  • 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.
  • 22% of children aged 11-16 say they are worried about how much money their family has.

I must be honest here and say that these findings don’t fill me with concern but that could be the eternal optimist in me focusing on the percent that aren’t feeling negative or worrying. As a parent I am definitely in the 11% that considers family finance as none of the children’s concern or at least not something for them to worry about. Conducting my own quick piece of research I asked my eldest two children ( 9&7) a few of their thoughts of money.

Their answers were nonchalant and vague, confirming my opinion that they don’t think negatively about money. neither do they worry that we won’t have enough to feed or clothe them. Interestingly Madam remarked that she didn’t want to be rich or poor associating wealth with greed and said, “that’s not holy” so I assume this is learnt from her catholic schooling.

Whilst I am quite relieved they still have a relatively innocent attitude to finances it’s not entirely a good thing. I’ve attempted pocket-money on a few occasions but tend to forget to hand it out on time, not have it on me when they ask etc. In the school of teaching by example I don’t think this casual nature on my part sets a good one. I am also still a little too controlling and the idea it’s their money and they can spend it on what they want – I still struggle with! I want them to focus on saving whilst it pours through (Master E in particular) their fingers.

I would like them to learn a little bit more about money because I know their lack of interest and knowledge translates into a lack of value. Neither of them value things properly which frustrates me terribly but I generally feel this is normal for a child. This fits with my attitude that finance should not be their concern or worry yet. I do wonder if I am naive and should educate them in preparation to handle things better as adults but I believe more strongly that innocence is so short-lived, why force them to grow up any faster than they do?

This year financial education will be embedded into the National Curriculum from Key Stage 1 through maths and citizenship. Whilst I think that some basic financial terminology and the concept of interest rates and charges could be beneficial; my full and thorough opinion on the government squeezing more into the Curriculum is a whole other blog post. To summarise this opinion – too much, too young!

I strongly feel that this education will be fruitless unless supported at home by a positive attitude and relaxed discussion. These are the tips Voucher Codes put forward for this in their paper…

  1. Talk about money at dinner. Money is still seen as a massive taboo. Adding it into daily life, like dropping it into conversation at dinner, makes it seem like less of a big deal. Ask if your children are learning about money at school, and if so what are they learning? Are these lessons coming from teachers or peers? It’s easy to then relate what they’re hearing about at school to how things are in the home.
  2. Leave your attitude at the door. It’s all too easy to influence kids with offhand comments and passing statements. Be mindful of what you’re saying about money around your children – try not to make jokes about the bank manager, avoid discussing other people’s finances in a negative way and be wary of complaining. Be careful of how you react to money issues too – especially around opening and checking bills or bank statements.
  3. Create an incentive to save. Children love an incentive. Try to encourage their saving by setting a rate of interest and increasing what they save by that rate. Perhaps you could have two jars – one for what they’re saving, another for your previously agreed rate of interest, and set a date when they’re allowed to use to combined funds.
  4. Consider opening a bank account. Allowing your child to have access to a bank account enables them to see the reality of money and know that money they have is theirs. Though
    not essential, a bank account with online access can mean your child can see money going in and out of their account. Quantify the money in the bank in terms of what they could buy with what they have, or what they could buy if they save further to teach further lessons on delayed gratification.
  5. Involve your children in the grocery shopping. Ask them to help you come up with a list of things they need from the supermarket and things they want. Set a budget, then make grocery shopping into a game where your youngsters help you find the best value foods from the list for the things they need, and allow any of the remaining budget for the things they want.
  6. Chart Pocket Money. The pocket-money chart you’ll find in the appendices of this document is another great way to reward your children for saving. Track their progress throughout the month, and encourage them to select a treat (or treats!) they’d like to purchase at the end of the month in the “treat column”.
  7. Practice what you preach. It’s integral to set a good example for kids with money, or all of the messages you’re teaching them about smarter spending, saving and money management will be completely lost.
  8. Don’t stop the conversation. It’s crucial to keep talking about money. Try to make it a regular conversation between all members of the family and remind your kids that if they ever have any questions, they can come to you. Leave it as an open-ended discussion that can be, and is, returned to again and again.

I’d love to know how you approach finances with your children. Do you discuss them and do you feel financial education is necessary?

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I joined Alex from DaddaCool, Alison from Notanothermummyblog.com, Bex from Themummyadventure.com, Helen from Actuallymummy.co.uk, Jo from Slummysinglemummy.com, Katy from Modernmummy.co.uk, Luci from Motherwifeme.com and Mirka from AllBabyAdvice-blog.com for dinner to discuss the research.

Read the full report; The Relationship Between Children and Family Finances for more information and their opinions.