It’s a hot debate with varying attitudes, but when is the best time to teach your children about the value of money? Take my brother’s and I for example. Three more different attitudes to money you will not find! The whole reason I started this blog was to keep me accountable in pursuit of saving a deposit for my first home, when I realised just how much I was actually wasting, that original plan evolved into a fifteen year plan to retire. But, I used to be pretty horrendous with money before I began the process of giving myself a financial health check, and, believe it or not, I actually started as an avid saver as a young child.
Three brothers, three totally different attitudes to money
If you have been reading this blog for a while you will know these past five months has seen a massive change in attitude towards saving for my future. But, for the purpose of this article we’ll re-visit the old David, along with the stories of my two brothers as well.
Michael is my middle brother, is just over two and a half years younger than me and still lives at home with mum. He lives the ultimate frugal lifestyle, once he has paid my mum what he owes for bills and food, he pretty much saves every other penny. He is still wearing clothes from fifteen years ago (I kid you not) and if you tell him to get himself some new ones you’re met with his famous old line “there’s still years left in these yet”.
He has always struggled in social situations, is not a fan of crowds of people and very rarely leaves the house unless it’s to go to work. He is going to be sat on a fortune by the time he hits retirement, but I’d argue he exists, rather than lives.
I’m the eldest, started off well in terms of attitude to finance, but fell by the wayside after leaving school and discovering holidays, pubs, bars and nightclubs. I was the ultimate social butterfly, staying in one night a week if I was lucky at one point. With that level of nights out came the need for new clothes, I mean I couldn’t be seen out in the same stuff all the time could I? However, I didn’t borrow to fund my lifestyle, never went cap in hand back to mum for money that I had spent on nights out rather than bills.
There were no savings for emergencies or rainy days though, and I am pretty lucky that nothing significant ever happened in that respect. But most criminal of all, there were no plans for buying my own property or retirement.
Philip is my youngest brother, is four and a half years younger than me, is shocking with money, still lives at home and doesn’t contribute towards bills. Any money that comes in is gone in no time at all. He borrows with no intention of paying it back and generally has a lack of responsibility financially. He constantly robs Peter to pay Paul and doesn’t have a penny saved away for the next day, let alone retirement.
He has suffered with mental health issues which lead us to all be a bit soft with him in terms of discipline and responsibility. The older he gets, the more I wished we had got a grip of him, it’s kind of worrying to think where he will end up further down the line when there is no mum there to look after him.
As a child I spent a lot of time with my grandparents. My grandad, in particular, was awesome with money. He was never flash with his money, but always had plenty of it for his retirement. It was no coincidence that I started off an avid saver, he instilled the responsibility to save in me. When I fell by the wayside and I was making my plan for retirement, I went straight back to his teachings to get back on the straight and narrow again.
Michael seems to have taken half his influence from granddad and the other half from our step-dad Keith (RIP). Keith was the ultimate tight wad, and he would take pride in hearing me say that! Just like Michael, the only new clothes he ever got were ones that were bought for him as presents and he lived a very frugal lifestyle. In a lot of ways he is responsible for getting my mum on track with her finances, as getting him to spend a penny was a huge task in itself! Grandad disliked pubs just like Michael, he hated smoke and refused to sit around everyone else doing it before the smoking ban took force. He preferred to brew his own beer and make his own wine as a hobby, and also to keep down costs.
Philip has taken after my father in so many ways. Although my dad did eventually get good with his money, as an only child he was pretty spoilt by my grandma and if he wanted money for something, he got it. My brother has been the same, for different reasons as mentioned above. But, a lack of accountability has not done him any favours in the long run. If my grandparents had known what was going on they would have stepped in, but we kept them totally in the dark about the whole thing – something I massively regret now.
UK attitudes differ hugely from area to area
Icount recently ran a survey of one thousand people asking them at what age they thought you should start teaching children the value of money. In total 13.6% of those surveyed thought you should start to teach children the value of money before they reach the age of five. 43.6% thought you should start between the ages of five and seven, with another 30.7% thinking it should be done between the ages of eight and ten. Maybe most surprising of all, 10.5% though you should leave it until they were between eleven and thirteen.
The variations are huge between areas too, with 19.8% of people surveyed in the North West thinking you should start early at ages naught to five, compared to just 7.6% in the North East.
Who should be responsible for teaching it?
In England you get some basic teachings in money, but not really about the value of it. I think there is an argument to have at least some basic sort of knowledge given in schools, but at home you can influence your child much better by teaching them about both the value of money and the ways of finance.
Create a spreadsheet and make your own in house bank account for them. Give them an interest rate to save and encourage less frivolous purchases, wasting money on things they don’t need.
My two brother and I are perfect examples, three different influences and three totally different attitudes to money. Which habits are you going to create for you children?
He is also a contributor to Clear Debt, ICOUNT Money and M1 Debt Advice blogs discussing all things personal finance.