22-Feb-2019 • Personal Finance

A new study by ME shows a strong link between financial wellness as an adult, and specific money experiences during childhood.

But the study also shows that as adults, we tend to overlook childhood money experiences as important.

ME surveyed 1,000 adults looking for links between financial wellness and an array of typical financial experiences, both growing up and in early adulthood.

Of those surveyed, overall 59% described themselves as ‘effective savers’ while 56% described themselves as ‘financially comfortable’ – both markers of financial wellness.

But these figures increased significantly for cohorts with key childhood money experiences as well some adulthood money experiences.

For example, saving behaviour was highest for those who ‘received advice about money or were involved in money discussions when they were growing up’.

And financial comfort was highest for those who ‘were taught more than they need about how to manage money growing up’ or who, as adults, have seen a financial professional’.

Biggest influencers on financial wellness

Reported as an effective saver

Reported as financially comfortable

Received advice about money or were involved in money discussions when they were growing up (Childhood money experience)

74%

64%

Were involved in the family business or managing the family budget’ when they were growing up (Childhood money experience)

72%

65%

Were taught more than they needed about how to manage money growing up (Childhood money experience)

69%

71%

I’ve seen a financial professional who gave me valuable money skills and knowledge (Adulthood money experience)

69%

71%

Had parents who were good role models for managing money when they were growing up (Childhood money experience)

67%

64%

Read literature providing valuable money skills and knowledge (Adulthood money experience)

66%

62%

But some money experiences which are often thought of as important, did not show a significant improvement in financial wellbeing, notably receiving pocket money as a child.

No influence on financial wellness

Reported as an effective saver

Reported as financially comfortable

Relied on the little day-today financial experiences in life to be a teacher of money management

60%

56%

Received pocket money

56%

54%

The study also revealed some experiences as potentially having a negative impact on one’s later ability to save and be financially comfortable.

Negative impact on financial wellness

Reported as an effective saver

Reported as financially comfortable

They were not taught enough about how to manage money growing up

48%

43%

Whose family did not discuss money

51%

51%

The study also showed many adults overlook their childhood experiences as important.

When asked when they believe they learned their most important money lessons, the most common answer was ‘starting work’ (38%), followed by purchasing a home (17%), while ‘before leaving home’ was nominated by 16% of respondents.

When did you learn your most important money lessons?

 

When I started working

38%

When I purchased a house

17%

Before I left home

16%

When I was first in a committed relationship

10%

When I first saved for a significant purchase, like first car or overseas holiday

9%

I have never learned valuable lessons about money

6%

Other (Please specify):

5%

The survey also suggests money lessons are underdone at home, perhaps reflecting the lack of importance adults assign it, with 40% of respondents saying they wish they were taught how to manage money when growing up.

When you were growing up at home, were you taught enough about how to manage money?

 

I wish I was taught more

40%

I was taught the right amount

48%

Not relevant

6%

I was taught more than I needed

6%

ME money expert Matthew Read said “if you want to help your kids be good savers and increase their chances of being financially comfortable, exposing them to good money experiences during childhood is important.

“These experiences seem to instil an attitude to money that becomes almost innate later on.”

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