Have you already financially screwed up your children?
I know we shouldn’t be encouraging you lot to breed, but if any of you do have kids, you’d better get them into the money saving habit early, or they are destined to be crap with their cash forever.
Current Government-oracle-of-the-month on all things financial, the Money Advice Service has released a new report that “highlights the power which parents and caregivers possess to shape the money habits of their children”. In simple terms, if you haven’t encouraged them save up their pocket money for something by age 7, you may as well give up now.
Authored by behaviour experts at Cambridge University, the report reveals ‘key findings’ about how and when core behaviours and habits are formed in young children, for example:
- by the age of seven most children have grasped how to recognise the value of money and to count it out; and by this age they will also have come to understand that money can be exchanged for goods, as well as what it means to earn money and what income is;
- by the age of seven, most children in the UK are capable of complex functions such as planning ahead, delaying a decision until later and understanding that some choices are irreversible; but children under eight years old have not developed an understanding of the difference between 'luxuries' and 'necessities'.
The report urges parents not to underestimate the effect their own money habits will have on their children. Clearly Bitterwallet readers' offspring will all have excellent money management skills, while all those bad parents with bad habits will end up with financially idiotic children. Not that they are thrusting their sticky beak in, but the Money Advice Service thinks “simple and playful parenting… is required in order for children to develop good money management skills, which are essential to help them become financially capable adults.” Hard cheese if you are not simple nor playful then.
Caroline Rookes, CEO of the Money Advice Service said, ominously:
"This study really demonstrates the power of parental influences, and illustrates how 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.
Co-author of the new study, Dr David Whitebread, of Cambridge University was similarly cheery, saying:
"The 'habits of mind'… including financial ones, are largely determined in the first few years of life,” and adding that “simply imparting information is now recognised as being ineffective in this area.”
As a result, the Money Advice service plans to create products and services for parents to use to help children understand money skills. Look out for their fun ‘financial education’ picture story book coming your way soon.