London - Like many parents, I worry every time I have to talk to my two boys about money.
My first attempt to explain to my eldest, who is four, why coins don’t grow on trees ruined a trip to a toy shop.
But the second attempt planted the seed (I hope) that good behaviour will help fill his new piggy bank - and bring another visit to the same store closer.
As my sons get older, my plan is rather stark: for them to grasp that once money is spent, you can’t spend it again.
Whether it’s cash they’ve earned or been given as a gift, they’ll learn about choice: buy a small treat this week or save up to get something bigger they really want.
While it’s a tricky concept for many youngsters to get their heads around, it’s one I believe will instil a greater understanding of the way money works.
This view is shared by consumer champion Martin Lewis of moneysavingexpert.com, who calls it “delayed gratification”.
He also believes it’s vital to tell children that, with finance, there are sometimes no right answers. It’s an approach I aim to continue when they are adults.
Learning about uncertainty helps you weigh up the pros and cons of any financial decision.
Should I fix my mortgage or take out a tracker, which might rise? Is it better to invest in shares or bonds - and what happens if markets crash? Will paying hefty university fees guarantee me a better-paying job?
Sadly, there’s no crystal ball. But as many parents will attest, such a hard-headed approach is not always possible. It’s not easy to expose a child to a harsh reality when you can spare them the pain.
This boils down to our emotional bond with money and decisions, which the financial services industry calls behavioural economics. It combines psychology and science to try to explain what lies behind our financial decision-making.
There’s a desperate need to work out why people make terrible decisions - and how they can recognise when to pull back from the brink.
Whether it’s picking a poor investment, falling victim to fraud, not switching banks for a better deal or dithering to save more for a bigger pension, too many end up in hardship unnecessarily.
Add your beloved children to the mix of finance, risk and irrational personal behaviour, and the potential for disaster is great.
There is no right or wrong way to open your children’s eyes to why toys/holidays/first cars can’t be handed out on a plate.
The key is to talk about money. I don’t just mean chatting about the value of pocket money. Instead make it a habit of a lifetime that should begin when a child first understands what happens in a shop and carries on via piggy-bank saving and cash earned from a first job through to university budgeting, help with a mortgage and on to inheritance planning.
Talking about money helps remove much of its mystery and clears up confusion. It won’t always be easy as many of us have been brought up to consider it brash, vulgar or embarrassing.
But if you don’t communicate about this important issue, it can result in huge errors.
So, start young and keep a lively conversation going. It won’t always be easy, and my first attempt didn’t start well, but I learned I needed to pick a better time and place to discuss money. Not outside a toy shop. - Daily Mail