You have your mother’s eyes and your father’s debts: Study finds how teens inherit money habits from their parents

It would appear that genes aren’t the only thing that parents pass down to their children, with a study finding teenagers exhibit similar traits when it comes to handling their finances.

Young people whose parents struggle to pay off their debts are less likely to budget their own finances sensibly compared to those with parents who can live within their own means, the Money Advice Service has found.

And two-thirds of 15 to 17-year-olds whose families can save for ’emergency costs’ have a regular habit of saving their pocket money or wages from part-time work, compared to 47 per cent from families who can’t cope with unexpected costs.

Money Advice Service chief executive Caroline Rookes said: ‘We know our money habits are formed very young, and once formed are extremely difficult to shift.

‘But I am struck by how heavily a young person’s money management habits are influenced by their family’s past and present financial behaviour.

‘This is our first glimpse of how these young people are coping with the transition into adulthood – we see a generation “coming of age” through a period of austerity, a group that’s witnessing rapid financial change and learning how to cope and plan.

‘It’s vital we keep track of their habits effectively so we can better understand their challenges and help them deal with life’s financial ups and downs.’

Although teenagers take note of their parents’ attitudes to money, there are positive signs that they will be better equipped to deal with their finances once they reach full adulthood.

Money habits are ‘formed by age seven’

The government-backed Money Advice Service has warned parents “not to underestimate the effect of their own bad money habits”.

Most children’s financial habits are formed by the age of seven, it was claimed today by the government-backed Money Advice Service (MAS), as it urged parents not to “underestimate the effect their own good (and bad) money habits will have on their children”.

The organisation pointed to a Cambridge University study that suggested that most young children had grasped all the main aspects of how money works and formed “core behaviours which they will take into adulthood and which will affect financial decisions they make during the rest of their lives”.

Caroline Rookes, chief executive of the Money Advice Service, said: “This study really demonstrates the power of parental influences, and illustrates how much of what you learn and absorb when you are young, both consciously and subconsciously, affects the choices you make throughout the rest of your life.”

The MAS said it would establish a forum to create “world-class parenting and teaching resources” and has called for money education to be included in the primary school curriculum in England.

Michael Gove, Education Secretary, announced plans earlier this year to put personal finance education on the curriculum for secondary school pupils.

%d bloggers like this: