Parents divided on social media's role in teaching kids about money

A recent survey has found that one in five (20%) parents believe social media might be better suited to teach their kids about money than they are, despite the potential risks of scams and fake profiles.

Additionally, around two-fifths (42%) of parents surveyed said they do not feel they know enough about money management themselves to guide their children effectively.

However, the vast majority (95%) of parents surveyed agree they should have a role in teaching their own children about money, according to the research commissioned by Santander UK.

Parents seek support for financial education

Parents who have difficulties discussing money with their kids said they would find various forms of help useful, including:

• Official guidance from schools or the government about how to approach financial topics (24%)
• An online community to provide them with support and advice (24%)

Learning how to manage money is an essential life skill

Teaching your kids about money is one of the most important life lessons parents can give. And we get it – it’s also really complicated especially if you weren’t taught about it earlier in life either. But starting with the basics like financial responsibility and managing money wisely doesn’t need to be intimidating. Here are six easy – and enjoyable - ways to start teaching your kids about money.

Give them pocket money

Giving your kids pocket money each week is a great way to introduce them to the concept of earning and managing money. It teaches them that money isn't just given to them and has to be earned through work or good behaviour. Give them cash so it’s tangible and they can see it in their hand and get them to count it up so they know how much they have. Also set clear expectations and guidelines on how the money should be used, such as saving some up for something they really want or donating a potion to charity to help others.

Encourage them to save

Teaching your kids the importance of saving money is crucial. Encourage them to set aside some of their pocket money or any birthday money they receive into a savings account. You can make it fun by setting savings goals together, such as saving up for a new toy or a special outing. Show them how their money can grow over time through interest and compounding.

Teach them about budgeting

Budgeting is an essential life skill that everyone should learn, including children. Teach your kids how to create a simple budget by allocating their money into different categories, such as saving, spending, and giving. Help them understand the difference between wants and needs and how to prioritise their spending. Expose older children to your household budget. Show them what income you have coming in from your salary and how you portion it up to cover essential bills, borrowing, and be open about what you have left for savings and treats. Kids will then have a better understanding of how household finances work when they grow up and move into their own home.

Let them buy their own things

Allow your children to make their own purchases with their money. This teaches them the value of money and how to make informed decisions about what they buy. Encourage them to compare prices and look for deals before they buy something they really want. Question if it would be better for them to wait for the sales and pick up the item at a reduced price to save some money. And if they make a mistake or regret a purchase, use it as a learning opportunity to discuss the importance of thinking before spending.

Involve them in family financial discussions

Include your kids in age-appropriate family financial discussions. This can include talking about the family budget, upcoming expenses, and financial goals. By involving them in these conversations, you're teaching them the importance of open communication about money and how to make financial decisions as a family.

Lead by example

Finally, one of the most effective ways to teach your kids about money is to lead by example. Children often learn by observing and mimicking their parents' behaviour. If you want your kids to be financially responsible, you need to model good financial habits yourself. This includes living within your means, saving regularly, and making smart financial decisions.

And if you happen to find yourself in debt, show them how you plan to rectify it whether that’s by cutting back in areas, coming up with a repayment plan, or, if the problem is more serious, by seeking free debt advice. By being open, you’re helping to create a generation that won’t shy away from important conversations about money.