A recent study by family support charity Home-Start has revealed 31% of adults felt general money discussions were inappropriate for children to be included in. But is keeping quiet healthy for your household?

Making money a taboo subject can have a negative effect on your child's financial abilities in the future.
Making money a taboo subject can have a negative effect on your child’s financial abilities in the future.

75% of children aged 5-10  don’t think so, instead believing they should be involved in decisions about what their family spends money on, yet  29% of adults said they would feel awkward discussing their earnings with friends and family.

Whilst you don’t need to let your 10 year old read your old bank statements, it can be very beneficial to make money an open, safe topic in the home.

However, it can be daunting to discuss money matters as a family. For a lot of people, keeping quiet about money is learned behaviour, with half of those polled admitting they never had discussions about personal finances with adults during their own childhood.

Managing Director of Morgan Stanley Wealth Management Glenn Kurlander calms the fears of parents worrying that talking about money is opening Pandora’s Box:

“If we try to force the lid down, we’re really teaching our kids that there is something inside the box to fear; something so dangerous and harmful that we don’t even talk about it. If that’s the lesson we teach our kids, we’re not starting them off on the road to forming a healthy relationship with wealth.”

The Money Advice Service concur:

“Some parents worry about exposing their children to money too early because they want to protect them from adult pressures. But helping your child to understand and respect money from an early age will help them manage it better when they’re an adult.”

Children are naturally very inquisitive and perceptive, so your financial circumstances are probably evident in your lifestyle. If your children go to a private school and you drive a new Audi, they certainly won’t be oblivious to the fact you are wealthy. Equally, if you are struggling to make ends meet and have a lot of contact from creditors, chances are they will notice.

Talking with your children is a good way to gauge what their thoughts are on finances, and take control with how they handle their own accounts in the future. For example, you might live a lavish lifestyle, but are worried your children won’t know the value of money. Or, you might be struggling to make ends meet and panic that your child is going without, or will feel afraid. Unless you take action, you can’t be sure that your anxieties won’t become real.

There are simple ways to involve your children in money making decisions. For instance, if you’re on a tight budget, let your children be involved in money saving. When you go to the supermarket, let them help you work out which is the cheapest cereal, or bread, and see if you can beat your “score” next time you do a shop. If you’re worried they don’t appreciate the luxuries they are allowed, make them manage their own budget on a trip – give them a set allowance (£10 for example), and make sure that’s all they spend that day.

Walk the talk?

A crucial piece of advice from Kurlander is to “walk the talk”. Learning by example is a key part of a child’s development, so it’s essential that what you want to teach your children about money lines up with how you behave – otherwise the sentiment is meaningless. Sometimes this in itself can make it challenging to bring up the topic of finance, but for some it can be the very mirror needed to make us take action and iron out our bad habits.

For more tips on opening up the lines of communication with your children, read our guide to teaching your children about money.

If you’re struggling with your finances and want to talk to one of our friendly, professional advisers, give them a call today.