According to recent findings, almost half of UK adults (49%) are in debt, owing an average of more than £4,000, while 10% of those in the red say their mental health has affected their ability to handle their finances and repay bills.

These statistics are undeniably concerning, and they may get worse if we fail to educate the next generation on how to properly manage their money. Of course, there is a time and a place for such discussions – there’s no sense talking to a three-year-old about taxes, for example – but keeping our little ones fully informed from a young age can help to shape their habits for the better when they grow up.

It may prove beneficial for your children to understand some of the following key areas of finance from an early stage in their lives.

Saving and spending

A survey of 20,000 children between the ages of four and 14 found that the average child received around £5 per week in pocket money in 2018. Whether or not you allow your young ones a little cash to call their own, it can be important to impress on them how to adopt appropriate saving and spending habits. Even at an early age, kids can soon appreciate that when money is spent, there’s no getting it back, which may encourage them to save more prudently as they grow older.

Bank accounts

As part of teaching your children about saving, you can help them to understand the process of opening a bank account and the benefits of putting money aside at regular intervals. You may wish to open one on their behalf and contribute a small amount each month which, over time, will grow into a decent sized sum. Making them aware of such a practice at an early stage will help them to appreciate what you’ve done for them as well as teaching them sensible habits that they may wish to replicate in the future.

Loans

There may come a time, later in life, when your child has the need to take out a loan or assess alternative financing solutions. Before they reach this point, it may be prudent for you to take them through some of the basics around loans, including what they might be needed for, how the repayment schedules work and how the interest rates can impact on the overall amount borrowed.

Mortgages

Like loans, the conversation around mortgages is perhaps best left for when your children are in their teens and have a greater appreciation of more complex matters. You could take them through the ins and outs of saving for a deposit, how that can affect the house they buy, how fixed and variable rates work and what a monthly repayment figure might look like. By doing so, they’ll be better prepared for that point in their lives when they’re thinking about taking the first steps on the property ladder.