Tips on how parents should can talk about money with their children revealed

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Majority of parents avoid talking about money with their kids
Only 43% of parents think they are better savers than their children
More than 40% believe children should not have to worry about money
More than a quarter feel awkward to talk about money to anyone at all
This week is Global Money Week, which helps engage children with money
Parents are the biggest influencers in forming money habits

Published: 04:48 EST, 13 March 2015 | Updated: 07:24 EST, 13 March 2015

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When it comes to teaching children about manners, safety or even sex, most parents don't hesitate in making sure their offspring have a good understanding (no matter how awkward they may find it).

However, despite the huge importance placed on financial education, more than half of UK parents admit they find it difficult to talk to their kids about money, and are avoiding the topic for as long as possible.

A report from the government’s Money Advice Service found parents are simply leaving it too late, claiming children start forming money habits from as young as seven, whereas mums and dads leave discussing savings from around nine.

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Parents should talk to their children about savings from a young age, according to Kalpana

The majority of parents agree that they are the biggest influencer when it comes to teaching their children about money, and insight from the Money Advice Service has shown the more mums and dads talk to their children and give them responsibility from an early age, the better they will become at saving and planning for their future.

Financial education truly begins at home, so what can parents do to help their children get to grips with finance? Here, financial journalist and founder of blog MummyMoneyMatters.com Kalpana Fitzpatrick reveals her top seven tips.

1. Start young

Start talking to your child about money from as early an age as possible – five is not too young. It's important for parents to make the lesson appropriate for their child's age. With a son or a daughter who is five years old, mums and dads can start talking to them about different types of coins and let them pay for things when out shopping, so they get used to handling money, or play shops with them at home using pretend cash.

2. Open a savings account

Opening a dedicated savings account for your child is great way to show them how their money can grow, and can also help start conversations about how long it may take to reach a certain amount of money. It will also start to teach them the very basics on investments and savings.

3. Let them make mistakes

It is important to give your children an allowance and let them use it as they choose. Yes, they may well make what you consider to be the wrong choice, but they will learn from those mistakes, which is important for their financial learning curve. It is better for them learn from small amounts now at a young age, rather than bigger amounts when they are older when the consequences would be far more serious.

4. Be confident

Parents should remember when teaching their children about money, that they are helping them to learn a lifelong skill - so confidence is a must. Some mums and dads are afraid to broach the subject, uncertain that they will be saying the right things, or feeling out of their depth. It's important to start with the basics, and remember that any glimpse into handling financial matters that parents can offer their children will stand them in good stead for the future.

It is important to give your children an allowance and let them use it as they choose (file photo)

5. Pay for chores

Rewarding children for work around the house is the perfect way to teach them about earning money. Whether it's doing the washing up, washing the car or tidying their room, giving them a little cash for them to save or spend as they wish will introduce them to the working world. Parents could also ask their children to think about and work out how many times they would have to, say, wash the car to pay for the Xbox they so want, so they are familiar with the value of money.

6. Make it gradual

Parents should introduce their child's financial education gradually - if mums and dads haven't spoken before about savings and how to use money, don't jump in with one long chat, as it will become boring and feel like a chore to them. Introduce it gradually, making it a fun thing rather than a serious lesson, and make sure it's ongoing, developing your child's awareness as their familiarity with money grows.

7. Be consistent

Although most parents give their children a sum of pocket money, only 36 per cent of mums and dads say they do so on a regular basis. Being irregular and offering varied amounts can actually make it harder for children to learn about budgeting. Be consistent. For parents giving their child pocket money, do so on the same day, with the same amount, and discuss with them, in a lighthearted way, what they can buy with that money, or what happens when they pop it into their piggy bank - the amount they have doubles by the following installment.

According to child psychologist Dr Elizabeth Kilbey, it can be 'very empowering' to give your children skills and confidence with money, so that they don't have to face money worries in the future.

This year’s theme for this week's Global Money Week is ‘Save Today, Safe Tomorrow’ – parents can be part of helping children achieve this.

Money Advice Service guide on saving with your children