Encouraging healthy decisions about money

The Money Heroes podcast from Young Money, supported by HSBC UK. Hello and welcome to the latest episode of the Money Heroes podcast. I'm your host, Jonathan Hart. Now, in this series, we aim to empower both parents and children to help develop financial knowledge and skills. So at the best of times, it can be tricky introducing any new topic to the kids. In fact, the phrase I most fear at the end of a working day is, "Dad, can you help me with my homework?" So along with an array of brilliant experts, I hope we'll be able to unravel the world of money and sort out all you need to know. And thank you very much for all your feedback so far. It's been absolutely fabulous to hear your personal money and finance stories. In our last episode, we illustrated why financial education is so important and explained how to track your child's learning progress through the Money Heroes platform. By now, you may have registered for a parent account on the Money Heroes website. If so, you'll have access to loads of helpful resources and activities. And if you need help with registering, just pop us an email at [email protected]. Today we'll be talking about children's attitudes and habits to money with guidance on preparing them for the future with our guest, Helen Westwood, the standout winner of the MoneyWise 2019 Secondary Personal Finance Teacher of the Year Award. Before we welcome Helen, let's focus a bit more on how to recognise and use the primary planning framework developed by Young Money. The framework sets out the knowledge, skills and attitudes about money for different age groups of children and young people. It's focused around four core themes and forms the basis of all of Young Money's resources and programmes. On average, children start to become financially independent by the age of seven, perhaps when they start to receive pocket money. This is when their attitudes and habits around money really start to kick in. By the age of 11, children can open a bank account and have a debit card. I actually remember my daughter being so excited about opening her first ever bank account. It really made her feel grown up. Well, parents and guardians have a big responsibility to nurture children's lifelong skills and develop healthy money habits. Doing that from an early age ensures kids can make smart financial decisions once they begin to handle their own money. Well, hopefully, that will continue into the future. Did you know apparently a third of those under sixteen would rather spend their money than save it? I'm surprised it's not higher than that actually. So how can you ensure that you are effectively developing these healthy habits? Well, there's a framework for children aged three to eleven years developed by Young Money you might have seen or heard of that is used to structure the teaching of money. And this can be found at moneyheroes.org.uk. It aims to support the planning, teaching and progression of financial education, skills and attitudes across four core themes. Now there's nothing stopping you from also using this at home as a guide to learning about money as well as giving you a starting point for financial education using a similar structure as your child's school will to ensure that they're learning at home and in the classroom is coordinated. The framework is designed to be used flexibly across a range of learning opportunities and you can draw on ideas from other ages depending on your child's needs. There's a variety of approaches you can take depending on what's most suitable for your family. You can begin teaching your child one theme at a time and it's worth noting that themes can interlink. Many of the moneyheroes activities cover more than one theme. For instance, have a look at the Moneyheroes Super Supper Challenge. This activity allows children to plan a meal with your supervision and teaches them how to manage money on a budget. It also explains how to be a critical consumer and get value for their money. Or you can begin with establishing topics your child already knows across a range of themes and once those are being completed you can tackle the rest. You can keep track of the activities that have been completed through the Moneyheroes dashboard. So whatever approach you decide to take, there is no right or wrong. The important factor is that you're taking the steps to actually engage with your family on what is a really important part of life. There is also a secondary planning framework available that's been designed in the same way for ages 11 to 19 and you may have an older child in the family. You can introduce this too. Well Helen is with us today to tell us how to feel confident in teaching children about money at home and more importantly how to keep them engaged. Helen is a maths and financial studies teacher from Northamptonshire who's been teaching financial education since 2004 and was recently the standout winner of the MoneyWise 2019 Secondary Personal Finance Teacher of the Year Award. After graduating Helen started her career as a tax consultant with PWC but after deciding that the corporate world was not for her she retrained as a maths teacher and her previous career experience led to her being asked to establish the LIBF Certificate in Financial Studies. And it was first rolled out to schools way back in 2004. Helen has led financial education at two large schools in Northamptonshire and continues to do so on a part-time basis as she is now also a busy mum to her nine-year-old daughter Jessie. In her free time, I love this because this is exactly what I like doing, Helen enjoys yoga, camping and going to music festivals. Remember those? With Jessie. Helen believes that an informed understanding of financial matters is part of the foundation for a happy and successful future regardless of the size of an individual's income. I say here, here to that. Welcome Helen, how are you? I'm good. Thank you. Thank you for having me. It's our pleasure. Let me ask you first, what makes you passionate about teaching financial education? I think because it benefits the students in so many different ways, I mean the lessons that I do contribute towards their qualifications as you've mentioned, but more importantly, students are constantly challenged to relate what they're learning for their courses to their own personal situation in the future. I'm always saying to them, picture that you're 35. What difference will it make when you're 42? And students regularly comment that their financial education lessons is a one set of lessons that they'll use for the rest of their lives. So it's this impact that subject can have on young people's future that's so important to me. And I love how the subject and a greater understanding of financial matters can support them towards their achievement of personal objectives, whether that's buying their own home or retiring when they might like to, but also to hopefully protect them from some of the negative issues such as stress and mental health difficulties that can be caused by having financial problems. Indeed, and probably those lessons are the most important that a child can have in their whole life. Financial education can have a really positive impact on children, can't it? Yeah, it really can. And it's always amazing for me to see when students recognise this. And a really significant comment for me was when one of my year 13 students took part in a focus group for some work we did with the University of Edinburgh. And he said that he felt he was in a much better position than his parents, who'd had to learn about their financial matters from experience along the way, both in terms of good and bad. But he felt he was leaving school able to make the right decision in the first place regarding his finances because of the time he'd taken to learn about it as part of his studies. And another student became really animated once during a lesson on credit reports and suddenly said, Miss, what does everybody else do? And I said, well, what do you mean? He said, but we know about this because of our course, you know, we're learning about credit reports. But, but what about everybody else? And he was really shocked when I told him that I didn't know any of this until I was in my mid twenties. Yeah. Yeah. Now, I'm a dad of three kids, Helen, ranging all the way from five to 19. And I have seen how important investing, pardon the pun, see what I did there, in children's financial education is. In fact, I wish I'd started earlier with my eldest. So platform for parents and teachers can really positively help develop children's money management skills, can't it? Absolutely. And I didn't always encourage parents to start with financial education as early as possible because introducing money also reinforces some simple number recognition skills. And we tie that in with identifying different coins and additions sort of early on with, you know, a little bit of help when needed. So children can soon start to experience making financial choices and decisions. If they're given the chance to decide what to spend there, you know, one or two pounds or more on up to giving older children experience of managing a budget such as something I've done is give my daughter 10 pounds a day when we're at different holidays or music festivals that we attend. And she's got to decide how to allocate that money over different categories. And if she chooses to spend all that by 10 a.m., then she seems to see the consequences of that. So let's get down to basics. What tips would you give to parents who want to start introducing their children to money matters? I'd say start early with some pocket money that children can have control of and talk to children about, you know, the benefits and power of maybe putting some of that money aside for future use, because I think the ability to delay gratification is a fantastic attribute that we can have today. And encouraging children to experience, you know, setting and meeting a savings goal can be hugely rewarding for them, especially if maybe parents could act like a very generous savings account with a high interest rate to illustrate how savers can also be rewarded for putting money aside, even though of course that doesn't currently reflect the low interest rates we have at present. I think it's also difficult sometimes for us as parents, but important to allow children to make their own decisions with their money. So even though we might like to jump in and say, no, I don't think that's worth it, actually, you know, if necessary, give our children the chance to experience a little bit of buyer's remorse and seeing that, you know, once they've bought that one thing, they can't get something different because that can be a really effective learning tool for future spending decisions. Absolutely. Depending on the subject, there are kids out there who are, I'm sure you've found, very resistant to new learning. What obstacles do you face when teaching children about money? I've found that financial education can just naturally be really engaging as a subject because it can be so closely linked to the achievement of personal objectives, both short and long term, that we want to achieve. So a nice starting point could be linking the learning to actually something that a child can see they might like to achieve or a purchase they might like to make, something big or something small, and just getting them to think about, you know, investigating how much it might cost, how could they get the money together to do the experience or to buy it. In terms of obstacles, I think there's still a reluctance in our society to talk about money freely and it can feel like a bit of a taboo subject. So one obstacle, I think, is just acknowledging and breaking down those barriers, including maybe our own reluctance as parents to freely discuss money in financial matters, but doing so in order for children to learn about money and how to use and manage it. Could you tell us about a successful lesson and how you implemented it? So one of my favourite lessons to teach is introducing students to the concept of the personal life cycle. So where I ask them to think about, you know, the age they are now, where they are now, and looking at their sort of working life, looking at their time in retirement, and to think about three big aspirations or achievements that they would like to achieve or purchase that they might like to make over the course of their life. And I say to them, you know, how old are you going to be and how much might each cost? It always stimulates loads of really interesting and enthusiastic discussions and it's fascinating how many clear ideas some young people have about when they see themselves getting married or how many children they might like to have, or the age at which they'd like to buy their own home, or even the age they plan to give up work to retire, you know, when they're 14, 15 years old. And then as the course progresses, we come back to this task as we start to find out more about the different financial products needed in order to make those aspirations a reality. Is there one really neat trick we should know to start getting kids interested in talking about money? Do you have anything up your sleeve? I think giving them some money of their own that they can actually make some decisions with so they get that practical experience, or maybe ask them to budget for an event or an opportunity like a family meal or a day out, hopefully when we can get to do those again soon, to give them that experience of prioritising and budgeting for spending and getting to see the end result of their efforts. OK, I'm going to put you on the spot here now, Helen. Could you give us three tips, just three, to keep children engaged in the topic? In particular, I'm thinking about the younger ages. Firstly, I think the use of pocket money and giving them that chance of getting their first money to get their hands on, and therefore the opportunity of making some financial choices and having to weigh up priorities and seeing the end result of those choices. My second tip would be possibly giving them the opportunity to earn a bit more, if possible, and maybe encouraging any entrepreneurial ideas that children might have, any interest they've got or anything they bring forward. And then finally, to encourage them to link anything they're learning about money with actually things they might be interested in or things that they might like to do in the future, because I've found that that personal link makes the learning feel more relevant and more real to them. You've reminded me, actually, Helen, when I was a young lad, I used to enjoy talking about stocks and shares with my dad. Does that sound a bit weird? I think I like looking at the numbers going up or down each day. I think I was in the minority, though, I'm afraid. I mean, at best, most kids only really used to talk in my days about pocket money with their parents. I think things have changed over the years. I think it depends very much on the different families. I teach a number of teenagers who show a strong interest in investing like you did and discuss this with parents, including how investments that parents might have made are performing. It's possibly still not the norm, but it's something I definitely like to see more students and parents getting into discussing, as of course with rock bottom interest rates, investing can be an important, if unpredictable, way of getting better returns on our money. I've also been really pleased to see parents talk at parents' evening about where they've been having discussions about something surrounding their mortgages and the students have chipped in and actually asked them about what they're discussing and even given an opinion, which I think is brilliant. It's funny when you think about it. There's a generation of kids out there who don't really know what sort of proper interest rates are. They've been so low. Absolutely. Do you find there are some parents who admit that they know so little about financial stuff, they wouldn't have a clue how to explain it to their children? Yeah. I have many parents at parents' evenings and at open evenings that say to me, "Oh, I need to do this course or I wish this subject had been available to me when I was at school," which is one of the reasons why I'm so passionate about wider financial education for more of our young people. I appreciate that some parents might feel concerned about sharing some areas of financial education with their children because they might not feel confident, but there are loads of great resources out there. Helen, you've really covered so much in a relatively short period of time. There are plenty more questions I could ask you, but is there anything you'd like to add to encourage any parents listening in their journey to teaching their children financial education at home? Just to say that it's a brilliant subject to discuss with young people in my experience and one that they can benefit so much from in terms of it helping their financial plans and their future management of money, a greater understanding of which can only be a good thing for all, I think, and just for parents to just starting from where you are and discussing as much or as little about money as you might prefer while signposting children to resources that they might enjoy and learn from in more detail if they might like to. I'd also encourage parents to have a dialogue with schools about what financial education is being provided. You know, the curriculum is really busy, but hopefully parents will agree that financial education deserves its time and space because it can be so beneficial for our children. Well, Helen, it really has been great speaking with you today, really inspiring as I said and some really interesting ideas on how to talk about money matters at home and how we can encourage our young people to engage the financial world. Thank you so much for joining us today. Thank you very much for having me. And of course, a big thank you to all you listeners for tuning in to another episode of the Money Heroes podcast. I hope that we provided you with some new and exciting ideas and that you're now going to sign up to Money Heroes and start tracking your children's learning progress. Please do. And if you'd like to share anything you've taken away from this episode, please visit MoneyHeroes.org.uk or get in touch at [email protected]. All the details are there. Thank you so much for listening. Until next time, goodbye. [BLANK_AUDIO]