Adult money habits set by the age of seven
The importance of teaching children good habits when it comes to how they handle money and finances has been highlighted by a new report which shows that core behaviours are set in stone by the age of seven.
New research published by the Money Advice Service has shown that parents can influence how their children will behave as adults when it comes to making financial decisions.
Caroline Rookes, CEO of the Money Advice Service, said of the findings: “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.”
Behaviour experts at Cambridge University wrote the report and amongst the key findings was the fact that most children will have grasped how to recognise the value of money and to count it out by the age of seven.
In addition to the numeracy angle, the concept of money being exchanged for goods and an understanding of income are both recognized at this young age.
The findings also suggest that at the same age most children in the UK are capable of planning ahead, delaying a decision until later and understanding that some choices are irreversible. However, the distinction between ‘luxuries' and ‘necessities' is not generally made until a year later.
Co-author of the study, Dr David Whitebread, said: "In today's world there are many pressures on young children and their families which make financial education increasingly important. The 'habits of mind' which influence the ways children approach complex problems and decisions, including financial ones, are largely determined in the first few years of life.”
The Service believes a combination of good habits at home and a creative approach to teaching resources is needed for children to develop good financial management skills to enable them to become confident in their dealings in adult life.
A prepaid card can be a useful way to teach children the value of money and how important it is to manage your finances effectively.