Money habits ingrained from childhood, study finds

Parents should be going out of their way to teach their children about the basics of managing money. 

This is because new research from the Mo…

Parents should be going out of their way to teach their children about the basics of managing money. 

This is because new research from the Money Advice Service has found financial habits – both good and bad – are ingrained from childhood. 

The study discovered that by the age of seven, the majority of children understand the value of money, know how to count notes and coins, and are capable of completing complex functions such as forward planning. 

It demonstrates how important it is for parents to spend time with their children and educate them about financial prudence, as these qualities will stay with them through to adulthood, when they will have to make big money-based decisions. 

As part of the research, the body has looked at over 100 studies published over the last 30 years in an effort to get a prevailing point of view. Based on the findings, it is going to work with pfeg (Personal Finance Education Group) and non-school organisations to improve financial education. 

The group will also develop products and services that parents or carers can use to help youngsters understand complex financial concepts and make them more relatable. 

Caroline Rookes, chief executive of the Money Advice Service, said the study makes it clear how important parental influences are when it comes to teaching kids about the value of money. 

"Much of what you learn and absorb when you are young, both consciously and subconsciously, affects the choices you make throughout the rest of your life. Over the next few months, we will be working closely with experts in education and the financial services industry to bring together a forum, and develop world-class parenting and teaching resources," she added.

If youngsters are not armed with the necessary financial skills, they might develop bad habits that will stay with them throughout their adult life. This could see them develop credit card debt, use unauthorised overdrafts or take out personal loans they will struggle to repay. 

By Amy White

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