Children’s struggle with the value of money

The cost of living crisis is making it hard to teach children about the true value of money, according to new research by fund manager Columbia Threadneedle Investments.

A stubbornly high inflation rate – with the latest Consumer Prices Index figure showing prices rising at 8.7 per cent – is leaving youngsters (up to 18 years) confused and unable to grasp the basics of budgeting due to ever changing high street costs.

More than half of parents and grandparents believe this is making it much harder to get youngsters to develop money management skills needed in adulthood. 

Despite this concern about learning about the true value of money, most parents still put budgeting at the top of the list as the most important financial lesson to teach youngsters about for when they grow up.

This is followed by wanting a better understanding of the need to save, using debit and credit cards responsibly and a requirement to save for retirement by having a pension. 

Worryingly, only 20 per cent of parents and grandparents put financial scams as a vital topic to discuss while the art of investment lags way behind with just one in ten believing learning about stocks and shares is essential.

Ross Duncton, head of marketing at Columbia Threadneedle Investments, says: ‘By involving children in the weekly shop, parents and grandparents can hopefully help youngsters better understand inflation – and how prices can rise and fall. 

‘By talking about this it should be possible for them to better understand about the eroding impact of inflation on savings and how investing can be used as a way to protect money from rising prices.’