A study of 2,000 adults with children up to the age of 17 has found that more than a quarter of parents don’t feel confident about having the first “money conversation” with their children. The survey, commissioned by M&S Bank, showed that 97 percent of parents believe it is important to teach their children about money but are uncertain about how and when to broach the subject.
The average age at which parents feel comfortable discussing money with their children is five years old. However, the study revealed that 38 percent of parents are unsure about the appropriate age to introduce the concept of money to their child. Only 34 percent of respondents had discussed money with their child before they turned five.
The research also showed that three out of ten parents are hesitant to talk about money because they don’t believe they would be effective teachers. Additionally, 28 percent find it challenging to simplify the topic and lack confidence in their own financial management skills. Moreover, 35 percent struggle to explain financial concepts in a way that their children can understand.
Psychologist Emma Kenny emphasized the importance of confident and open conversations about money from an early age. She suggested that parents can introduce the concept of money through play and meaningful conversations whenever the time feels right. Early discussions can help children understand the value of money, establish a positive financial foundation, and prepare them for their financial future.
The study also revealed the tactics parents use to teach their children about finances. One in four parents (25 percent) engage in role-play games such as “playing shop” with their children from the age of three. Around 19 percent introduce pocket money as a valuable lesson by the age of five, while 22 percent start teaching their children about money through counting coins and notes, also from the age of five. Additionally, 44 percent of parents believe that taking their child to the shops to help them understand how money works is an effective teaching method.
Despite 80 percent of parents claiming to have discussed money with their children to some extent, 60 percent feel they should be doing more to help their children learn about money at an earlier age. The reasons for discussing money with children include preparing them for the future (75 percent), considering money as a part of life (70 percent), and helping them understand the concept of savings (62 percent).
Concerns about their children’s financial future were evident among parents, with worries about their ability to support themselves financially (55 percent), build their own savings (46 percent), and develop confidence with money management (35 percent). Additionally, 35 percent of parents expressed concerns about helping their children understand the value of money in a world increasingly reliant on digital payments.
More than a third (36 percent) of parents expressed a desire for additional support on how to discuss money and finances with their children, especially when faced with tough questions. Children often ask more than three money-related questions a week, including queries about the value of money and its purpose.
Gill Roberts, head of products at M&S Bank, highlighted the importance of conversations about money within families. M&S Bank collaborated with renowned children’s poet Roger McGough to create a rhyme or poem to support early money conversations. The research coincides with M&S’s Little Shop 2 campaign, featuring the M&S Bank piggy bank as a way to introduce initial discussions about money.
Top 10 trickiest questions about money according to parents:
- Where does money come from?
- Why do some people have lots of money?
- How can I get rich?
- Why do we need money?
- How can I make money?
- Is £1 a lot of money?
- What can I buy with 50p?
- How much is a house?
- Can I have some money?
- Are we rich?
Tips for talking about money matters with children, according to Emma Kenny:
- Introduce the concept of money as early as possible through play and observation.
- Help children appreciate the value of setting and reaching small goals.
- Use the three “W’s” (What, What for, Why) to encourage children to think about their choices.
- Make learning fun through interactive activities like counting money or playing shop.
- Show children how money can be budgeted and spent in different ways.
- Help them understand different payment methods, including digital and contactless payments.