Recession teaches kids how to save

Chris Wheal

Mar 16th 2010

Text SizeAAA

Filed under: Economy, Personal Finance, Financial Crisis, Budget 2010

A YouGov poll of young people commissioned by HSBC and the Personal Finance Education Group (pfeg) ahead of next week's Budget says the recession has squeezed kids and they have learnt about saving.

More than a third of the children (34%) have heard adults say they cannot buy something because of the recession more than once a week. A quarter have reduced their own spending because of the recession. This is great news. I wish I could say the same for my own kids.

The survey was unusual as it not only covered more than 1,000 children aged 9 -10 but it also interviewed their parents. The survey was part of the What Money Means programme, an initiative to expand financial education in primary schools.

Key findings:

80% say they would save up to buy something rather than get into debt
54% said that given £20, they would save some of it
42% think their family should cut back on toys
32% wanted to cut back on trips out
63% want cuts to the 2012 Olympics budget
79% of parents want financial education in primary schools
29% of parents say that they talk to their children about money more because of the recession.
50% of children see books and computers as necessities
34% saw their mobile phone as a necessity
73% see iPods, trips out and new clothes as luxuries
26% of parents are more optimistic about the economy now than last year

Wendy van den Hende, chief executive of pfeg, said: "The survey shows that children have very good instincts towards money and they seem to be natural savers.

"This does not always last into adulthood, which is why we are working to improve financial education in schools to reinforce these instincts. It is good to see that parents also agree that this is important.

"We believe that What Money Means has made a real difference. Children learn the value of money, the dangers of getting into debt and the basics about the banking system. Whoever wins the next election, and whatever happens to the economy financial education needs to be kept on the agenda."

Save not spend

Peter Bull, head of HSBC in the Community, which supports the What Money Means project, said: "It is reassuring to see that many children want to save rather than get into debt.

"However there is a danger of children picking up bad habits from adults. HSBC actively supports financial education at an early age because it can reinforce children's better instincts."

My kids must be Keynesians. They are helping the UK economy spend its way out of recession.