- A third of all parents find it difficult to talk to their children about money, with one in 10 dodging their kids’ questions at all costs
- Parents put off talking about money because they worry about ‘getting it wrong’ or passing on bad habits
- One in twenty parents even admit they make up answers to their child’s questions about money as they don’t know the right answer
More than five million parents in the UK[i] say they find it difficult to teach or talk to their children about money because they lack confidence.
According to new research from financial services provider OneFamily, more than one in three (36%) parents struggle to discuss money with their children. Even though nearly all (97%) agree it is important for their children to learn personal finance skills, one in 10 (10%) avoid the subject altogether, even when asked.
On average, parents have started talking to their children about money by the time they turn eight years old, but low confidence sees others (35%) putting off financial conversations until their kids are over ten. Three in 10 (30%) who find it difficult admit they are worried about getting it wrong, while others (20%) believe they are not a good financial role-model for their children because they are bad with money themselves.
Overall, the majority of parents (78%) confess to having some bad financial habits including not budgeting (24%), buying things on impulse (33%) and one in ten even admit they never check their bank balance (9.5%). Nearly two in five (37%) say they learned these habits from their parents – and now, most (63%) are concerned they will continue the cycle, passing their own bad habits onto their children.
For other parents, low confidence stems from their lack of know-how, with a quarter (23%) reporting that personal finance is too complicated a topic for them to explain, and one in twenty (5%) even admit they have to guess the answers when their children ask them about money. The emergence of new digital payment methods is a significant driver of this, with a similar number (24%) saying they don’t know whether they should focus on teaching their children about digital money or actual notes and coins.
With many feeling unsure about their abilities, the majority (76%) talk to their children about personal finance less than once a month. But putting off teaching children about money comes with its own set of anxieties, with more than half (57%) of parents worrying they do not do enough to help their children learn about money.
As a result, many parents are also concerned about their kids’ financial futures. Around half (48%) worry about their child’s finances more than they do their own, with nearly two-thirds (65%) fretting that their children will be bad with money when they grow up.
As one in four (27%) of those who find talking about money difficult simply don’t know where to start, OneFamily has created a short guide to help parents feel more confident when speaking to their children about personal finance.
Steve Ferrari, Managing Director of Child Trust Funds at OneFamily, said:
“It’s clear that parents want to equip their children with the financial capability they’ll need when they grow up, but a lack of confidence is preventing them from doing so. Official guidance recommends that parents start teaching their children about money when they are a toddler and it doesn’t have to be taxing or complicated.
“When your children are two or three you can start teaching them about the concept of money in games such as playing shop. Most children start to get pocket money when they are around six to seven and this is a great way to help teach them about the benefits of saving up for something they really want. Once they reach 10 you can teach them budgeting skills through the weekly shop and monthly bills.
“With the first round of teens gaining access to their child trust funds in just two years’ time, it’s crucial that families start to have conversations about money to ensure that these teens make the most of their windfall.”
[i] According to data from the Money Advice Service, 27 per cent of adults in the UK are parents of children aged 2 to 18 – this is the equivalent of 14,258,952 parents across the UK. 36 per cent of parents find it difficult to talk to their children about money, which is the equivalent of 5,133,223 parents in the UK.