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Understanding the Financial Concerns of Children
Many adults face challenges with their finances, from managing daily expenses to planning for the future. However, these concerns are not limited to adults alone. Research conducted by KidsKnowBest has revealed that a significant number of children under 14 years old are experiencing stress about their financial futures. This indicates that financial worries are increasingly becoming part of childhood experiences.
According to the study, almost half of children under 14 reported feeling stressed about their financial situations. Additionally, one in four children between the ages of seven and 14 expressed anxiety about meeting their basic needs. These findings highlight the growing awareness among children regarding money matters, even though many do not fully understand financial concepts.
The research also showed that 55% of children believe their happiness is affected by money, with two out of five stating that money causes them stress. Despite this, only 60% of children claim to understand money. One child shared, “I know how to save for Lego but not what a budget is.” This illustrates a gap in financial literacy among young people.
Ann Pettifor, an economist at Prime Economics, emphasized the importance of teaching children about money. She stated that money is a human invention designed to help us achieve our goals, and thus, children should be educated about it. She suggested that parents and educators should sit down with children and explain financial concepts in a clear and engaging manner.
However, financial education is still lacking in many schools. According to GoHenry, 84% of school-age children want financial education to be included in the Government’s new national curriculum. Currently, financial education is legally required only in government-maintained schools, meaning that four out of five schools do not have to offer it. As a result, children often rely on their parents and peers for financial guidance.
Parents play a crucial role in teaching children about money, with 72% of children reporting that their parents are their main source of financial education. However, not all parents feel confident in passing on financial knowledge, especially if they themselves lack a full understanding of money management.
Joel Silverman, CEO of KidsKnowBest, noted that the care-free childhood many adults experienced is now a distant memory. He explained that children are influenced by the anxieties their parents may feel in a world of financial insecurity and rising living costs. Despite this, children are not being shut down by these anxieties; instead, they are showing curiosity and a desire for practical learning about money.
KidsKnowBest’s research shows that children overwhelmingly prefer real-life money lessons over digital sources. Nine out of ten children want hands-on learning experiences, with 47% expressing a desire for more financial education in schools. Additionally, 67% of children want to learn more from their parents. This highlights the need for parents to take an active role in teaching their children about money.
KidsKnowBest is calling for the financial sector to provide more accessible and relevant financial education for young people. The organization hopes that by offering practical lessons, they can empower children to turn their anxiety into informed decision-making and build a financially resilient future.
Teaching Children About Money: Practical Tips for Parents
Parents are the primary source of financial advice for children, as they are the ones who demonstrate saving, spending, and budgeting behaviors daily. Financial education begins at home, and it is essential for parents to start early. Children begin forming financial habits as young as seven years old, making it crucial to teach them the right concepts from an early age.
Louise Hill, founder of GoHenry, emphasized that the earlier parents talk to their children about money, the better. She noted that these conversations don’t have to be formal or daunting. Instead, they can be fun and engaging. For example, during a weekly grocery shop, parents can turn the experience into a game by challenging their children to find the best-value products while staying within a set budget.
Another effective way to engage children with money is by allowing them to use it. Giving pocket money, even in small amounts, introduces children to the concepts of budgeting, saving, and spending responsibly. Hill explained that consistency is key—giving regular pocket money helps children develop good financial habits and understand the difference between wants and needs.
Familiarity with money is essential for children to manage it effectively later in life. Many parents grew up with money as a taboo topic, but today’s children are exposed to financial information through social media. This makes it important for parents to ensure that their children receive accurate and practical financial advice.
Hill added that social media can influence children with messages about debt, credit cards, and buy-now-pay-later schemes. To counter this, parents should make money a comfortable topic of discussion at home. By having open conversations about money from an early age, children can learn to understand it rather than fear it, setting them on the right path for managing their own finances in adulthood.