Robin Powell
Moira O’Neill – Financial journalist

RP: There’s a great deal of evidence to show that people’s attitude towards money starts to develop very early in life. So what can parents can do to help instil good habits in their children?

Here’s financial journalist — and parent — Moira O’Neill.

MO: I have seen research that shows that children’s money habits are formed by the age of seven. So they haven’t had much schooling by then, and you think that therefore the main influence is coming from their parents, or their family or the people they’ve spent time with. And so it’s really important to think about that influence that you’re having, even on a very young child, in terms of forming their spending habits, forming the attitude they’re going to have in later life to money.

RP: A sensible first step is to start giving your child pocket money. It needn’t be much. You should also encourage them to save up for things they want to buy.

MO: I did this to my eldest child because she wanted to buy a little soft toy that was about that big. She really, really wanted it, and she had a whole cupboard already full of soft toys. I was thinking: do you really want that extra one? So, I think I was giving her a pound a week pocket money, and I made her save up for eight weeks to buy the little toy. And every week, she would come to me – “Mum, have I got enough to buy it yet?” – and I’d say, “No you haven’t. You’ll just have to wait another few weeks,” and then, by the time we got to the point where she had her eight pounds that she needed to buy it, we looked at it again. I said, “Do you really still want the toy?” and she said, “No, I don’t think I do.” (Laugh)

RP: Moira O’Neill also believes in paying children to do jobs around the house. The idea is teach them the value of earning their own money.

MO: So for example, they could fill the dishwasher, or tidy their room, or something that is not that onerous – or clean out their pets – things that you would expect them to help with around the house anyway. To teach them that they get their pocket money, or they get maybe a bit of extra pocket money, for doing those tasks. I know not everyone agrees with paying the kids for doing things they should be doing around the home, but I do think it’s a really valuable lesson. It also teach them that you’re working as parents to provide for them, and you have to do certain things to bring the money home.

RP: Another suggestion is to save as a family, putting physical coins and bank notes in a piggy bank or money box.

MO: Money is always like tapping cards onto buttons, these days. For a small child, that conceptually is much more difficult to handle – so I would make sure there is some physical money around the house, and that you do put money into a pot, and you see it building up. Therefore, they can learn that you can save and then you can go and buy a special purchase that you all maybe agree on as a family.

RP: Of course, children also learn about money from their peers at school, and will be exposed to plenty of bad habits and attitudes as well. The more you’ve taught them in those early years, the better prepared they will be for what’s to come.