A child’s upbringing can determine their financial views. Young people who are brought up in a money-struggling home will most likely have negative opinions about money, in comparison to those who are brought up in a more financially-positive environment.
Think about your childhood. Were you the child that watched other kids set off on expensive holidays – or were you the child that was spoilt for family outings? The child sitting at home would most likely have deciphered the difference between rich and poor from an early age, and may grow up worrying about money, whilst feeling uneasy around wealth. Whilst the child from the financially comfortable home may grow up more at ease around cash.
Many believe they have a perfectly normal outlook when it comes to money, failing to realise that their childhood has most likely determined how financially responsible they are. Therefore, if you are struggling with debts and don’t know how to take hold of your finances, it might be time to change your opinions – as it could be the very thing damaging your bank balance.
It is essential we educate young people about money. By teaching them the value you of money, how to create a budget, the benefits of a savings account and the different financial systems in place, financial plans will become second nature to a child and they’ll grow up to become responsible adults.
Education doesn’t have to start in the school, either. It is easy for a parent to teach a child the value of money. Start by teaching a little one some money basics when next in a sweet shop. Ask a child why they think sweets are kept by the till area and see what they say. It will then be a parent’s job to explain that it is a supermarket’s job to make money.
Parents can even open a bank account for a child, allowing them to keep track of how much money is entering their account. Once they’ve saved up enough, the parent could withdraw the cash on the behalf a child to buy them something they’ve been wanting – and they will learn the benefits of deferred gratification.
It’s also necessary to teach a child the difference between good and bad debt. The last thing a parent wants is for their child to be tempted to take out a pay day loan, or stuck with a pile of debt that keeps growing. However, it’s also important they know that there are some good debts out there, such as university loans and mortgages. Explain the difference to a child at a young age and they’ll grow up knowing right from wrong.
We should constantly be attempting to educate children on the value of money from the minute they can talk. However, more complicated financial lessons might be best taught once a child is 15 or16, as they will be old enough to take in the information, which they’ll carry with them once they’ve left secondary education behind.