The way we talk to our kids about money matters

by Sarah Hughes

Have you noticed as your children get older, their Christmas list gets shorter, their pile on Christmas morning gets smaller… yet the amount of money you’ve spent on that pile gets astronomically larger?

The festive season of 2023 was the first time I’d really felt that. With a 13 year old and a 10 year old who are both suddenly hyper-aware of the labels they should, and more importantly shouldn’t be seen in; the four or five items they’d requested totted up to more than the twenty bits of tat I’d bought their little brother. Infuriatingly, the six year olds’ favourite present was not the bike or the iPad - it was the cheap as chips harmonica I’d bought him as a little stocking filler. It brought him so much joy (even if it did make our ears bleed all day).

The way my kids reacted to their hauls on Christmas morning made me so pleased and relieved at the way we discuss money and finances in our house, especially amidst the ongoing cost of living crisis. They showed real gratitude for everything they knew ‘Santa’, aka their knackered mother, had worked so hard to gift them.

You see, my kids have been on both sides of the coin (if you’ll pardon the pun) when it comes to finances. Back in 2022 we were living in a big house, we had two new cars, we holidayed abroad several times a year. My kids were never spoilt but most of our conversations around money revolved about being empathetic and understanding towards children at school or at football who might not have had all the things they had. I talked to them lots about how different my upbringing was to theirs. Raised by a single Mum who held down several jobs, we regularly had to wait until payday to be able to fill the fridge and hid from the milkman when my Mum was simply unable to pay the bill. Holidays were few and far between and I had a sharp awareness that it was an uphill struggle for her every day just making ends meet. I made a point of ensuring my kids knew that it’s not just children overseas in Africa or India who are living in poverty, but in fact children a couple of miles down the road from us were regularly missing meals and living in houses they could not afford to heat.

Fast forward a year and a half, and I had gone through the most horrific, not to mention expensive divorce, and the financial future for me and my kids looked pretty different. They now had to learn about finances from a much less privileged position. Now, I’m not claiming that this is a riches to rags tail. Luckily our situation wasn’t that extreme. But nevertheless, I had to become so much more mindful and savvy about money, and that meant my kids had to as well. It was a sharp learning curve for all of us. But one that has been enriching on more levels than I could have imagined. I cannot imagine how the kids would’ve reacted to our change in circumstances had I not had those conversations with them in the years previously.

I’ve had interesting chats with friends on both sides of the wealth divide, who try to avoid talking to their kids about money. Either because they don’t want their children to have to worry about an issue which they believe is just for adults, or because they somehow think discussing money is a bit, well, vulgar. Especially if you have plenty of it. 

But I honestly believe little harm can come from being more honest with our kids about how we run our finances and how the cost of living crisis is affecting us. It fosters a sense of responsibility and kindness in children when they begin to realise the effort their parents have to put in to provide everything they do. And it’s no bad thing for children to sometimes hear; “I’m sorry. I can’t afford that this month, let’s save up for it instead.”

Saving is another tricky issue to address isn’t it? Of course for lots of us, amidst the current tough times; saving for a rainy day just isn’t that doable. But embedding in our children’s brains the benefits of saving is more important than I’d ever realised pre the divorce. Perhaps especially for girls, who are more likely to grow into those mothers whose earnings are limited by becoming the main child carer. Encouraging our daughters to save a pot of money which is just theirs will ensure they have security and stability when they might need it most.

I wish that there was more focus on financial wellbeing in schools too. It might dispel some of the shame children feel surrounding poverty if they knew how many other classmates were in a similar position. And let me tell you, having Finance as a class on the curriculum would be a great future-proofer. It’s pretty damn tricky learning about pensions and ISA’s as a 42 year old divorcee. I felt foolish and a bit ashamed that I’d been so clueless most of my adult life about finances. If I’d been taught some of that stuff at school I might have been a bit more savvy. It’s why I feel strongly that we shouldn’t shy away from talking to our children about budgeting. We are equipping them for the tough financial times they might find themselves in in future.

I always thought the saying ‘Money doesn’t make you happy’ was pretty patronising. Something very easy to say if you have an abundance of it. And yes, it’s much more complex than that. It can’t be denied that having money removes a level of stress that for some people can become overwhelming. But starting this new era of my life with less than I imagined I would have, has proven to me that some things, like independence and freedom, definitely make you happier than money in the bank.

It’s January 2024 and we are now in a very small, very ordinary house; which incidentally we all love! All the kids regularly tell me they much prefer it to the last place, which never felt like a home. I fretted so much about how they’d adapt to their new smaller garden and box bedrooms after having come from so much space. It turns out I had nothing to worry about. That old adage of home being where the heart is, is very true. If children feel secure and loved, the material things and grandness of their surroundings really don’t have as much value as we think they do.