Talking to kids about money is never easy. Just saying “no” doesn’t help them appreciate the value of things, or realise the importance of saving and planning. Ideally, we should start the conversation about family finances as soon as possible…

Perhaps it’s a British thing, but discussing money matters isn’t a priority for UK families. It’s not hush-hush, secret or swept under the carpet. It just doesn’t seem to happen according to The Money Advice Service.

It’s time things changed. Getting the whole family involved helps to build trust, educate and keep everyone fully aware. The family’s finances are important. Talking about them will help to manage expectations.

You could talk about planning to purchase the next family car, or that special overseas holiday. They are major decisions that everyone should really be involved in.

Helping children and teenagers understand that those big-ticket items cost a lot of money is the first step. It helps them prepare for adult life.

One day they will have to make important decisions when you’re not there.

Parents find chats about finances awkward

Amazingly, research by The Money Advice Service suggests that 58% of parents find it awkward talking to their children about important financial matters. Of course we all want to shield our kids. Mortgage payments, loans and pension planning are complex. But maybe we’re doing children a disservice.

These days, they have access to a world of information on the Internet. They can quite literally find out anything if they look for it. Worryingly, there are often no filters on what they can read.

That’s where parenting comes in. Talking about money, savings, borrowing and longer-term financial planning really should be part of modern-day conversations.

It should start with the basics. Regular saving should be something we all do, even if only a small amount each month. It’s all about forming good habits that will be embraced over the years.

Seeing the pennies and pounds building up in a savings jar is a great start. Putting that cash into a junior savings account takes things a step forward. Then opening a Junior ISA makes a serious statement of intent as you help your children plan for life as young adults.

Family finance at meal times

The perfect opportunity to talk about what things cost is during the family meal. Generating conversation, especially with teenagers, can be tough. But throw in real life scenarios, plans for that next holiday, or whether it’s worth upgrading the mobile phone are sure to grab attention.

Then the whole idea of putting money aside, budgeting, saving each month and avoiding interest charges on credit cards can be discussed.

Also, the hidden costs that children do not see should be explained. Like running a household, how much gas, electric or the satellite package costs, or that mobile phone tariff that is magically paid each month. You could talk about shopping around and looking for the best financial deals.

Money doesn’t grow on trees

That sounds obvious, right? To many no further explanations are required. However, there are plenty of adults and certainly numerous teenagers who will not understand where money comes from, and what its true value is.

Part of the problem is cash – or the lack of it these days. Handing over notes and coins gives a great visual representation of what something costs, especially when it leaves you will little or no money after the transaction.

With the advent of contactless payments and Smart Phone technologies that allow people to pay for things with their mobile, it’s often unclear what something costs.

Develop good financial habits

This always sounds like such a great idea. In reality, developing sound money saving habits is not easy. There are so many tempting offers out there, for adults as well as children.

There are other great tips from the Money Advice Service HERE, discussing the kind of things you can start to talk to teenagers about.

Highlighting the cost of running a car is a great example. While you can pick up many older cars quite cheaply, when you add up the monthly cost of keeping a vehicle on the road it can become unaffordable to many.

There’s road tax, servicing, insurance, petrol and new tyres – it soon mounts up.

It could be the perfect time to encourage your children to take their first part-time job. If they do, helping them open a first-time buyer ISA would be a superb way to plan for their first home.

Contributing part of their first pay packets to their growing fund would be an excellent incentive to keep saving for their future. From an early age they will develop a good habit.

Whatever you decide, Logic Wealth Planning is here to give independent financial advice on a range of topics to help you and your family throughout your lives.

Whether that’s life planning, ISAs, mortgages, business planning or thinking about retirement, we’re here to listen, advise and offer you solutions.

Get in touch on 0808 1234 321 or email info@logic-wp.com.