mother, with a child does online shopping using a credit card in the laptop at home

Baby Steps

Research says children develop money habits by the time they’re seven, so it’s never too early to talk finance. Quids in! explores how

“My son often pays for my coffee. He’s only two.
I already talk to him about money because I want to teach Dillon the things I wasn’t taught and prevent the mistakes I made!”

Quids in! reader Clare is perhaps a not-so-regular mum. She is determined to make sure her son understands money as early as possible. “He will know what a credit card is, what an overdraft is, and that getting a free mobile phone is not the right reason to open a new bank account.”

According to youth education group Young Enterprise, children have formed opinions about money by their seventh birthday. It is never too early to start helping kids to form good habits around cash… or even cards.

Here are Quids in!’s top tips on raising baby right on finance. An expanded version of this article is available as a free download for Quids In Readers Club members here.

Quids in! says
While we want to protect the innocence of childhood, play is also about preparing for adulthood. If parents don’t lead on this, how would we feel if the first people to offer help is a payday loan company?

MAKING FINANCE FUN: For the youngest children, introduce them to money and the idea of collecting things with a clear plastic piggy bank, so they can actively add coins and watch their savings grow

WHY, MUMMY?: Encourage questions but remember kids soak up ideas like sponges, so explain fully and try to be consistent

HELPING HANDS: We could all do with being more open about money, especially when we need help. The little ones’ earning power is limited so think about a little regular pocket money that will still teach a lot. Could they top it up if they offer to do a bit around the house?

THEY SHOOT, THEY SCORE: As soon as they are old enough, teach them how to set goals and work to them. Reach for the Argos catalogue and help them find something they might be able to afford within six weeks

PICK A PIC: Goals are always more powerful when written down and said out loud. Help them cut out a picture of whatever they are saving for, with the price, and stick it where they’ll keep seeing it

KEEP ‘EM KEEN: Goals are not reached over night, so try to talk to them every week about how they’re getting on with their goals. A trip to the store to spend those savings is the reward… Then start again

REAL WORLD LESSONS: The point of all this is to teach kids what to expect from the real world. Be disciplined about shortcuts and handouts – they will ask for top ups but ask yourself, what would happen for us? Do we want to teach them about how to borrow or earn more? Or wait or even go without?

TALK, LEARN, DO
The Money Advice Service told us about a pilot they led, along with Big Lottery and the Welsh Government to give parents across Wales the skills to introduce money to their kids from as young as three.

“How you manage your money as an adult is shaped by what you experience in the family home. Talk, Learn, Do answered questions like: ‘How can I stop my kids having tantrums in the supermarket?’ and ‘Should I give pocket money?’ Many of the best ideas came from the parents themselves. Parents liked being able to talk money in a fun, non-judgemental way.”

Get The Picture
The Money Advice Service says two in three adults struggle with financial commitments, so it turned to child behaviour expert Dr Elizabeth Kilbey to put together a few short videos to help parents ensure their kids know how to stay on top of their money.

The clips talk through steps to guide children from toddlers through to teenage years. Dr Kilbey’s key lessons are: ‘When it’s gone, it’s gone’ and ‘Save, spend, then save again’, which she says will help us all as we go through life. They show children starting to get familiar with money before they can even count. Then later, playing shop and learning that sometimes you cannot always have all you want.

One parent helps her son buy a game by taking him and his savings into a bank before showing him how she then can pay for it online.
“We want them to learn to look after it and keep it safe’” says Dr Kilbey. See more at here.

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