Children and Parents at Odds Over Their Financial Futures


59% of parents believe their children will be financially worse off than them in the future

On average children believe they will earn £56,000 aged 35 – twice the average wage

Only 5% of adults share children’s optimistic views about their future earning potential

New data released by RBS shows that adults overwhelmingly think today’s teens will be worse off in the future. Children on the other-hand expect to earn twice the average wage. The stark differences have been highlighted by the RBS MoneySense Research Panel, which is part of the Bank’s financial education programme, and has surveyed over 50,000 children over the last 5 years.

The 2011 findings of the MoneySense Research Panel also indicate:

  • English teens expect to earn most (£57,000), compared to those in Northern Ireland who anticipate earning £39,000. Both are significantly above the actual rate of £24,000.
  • 9 in 10 children think it’s important to learn about money, and are more concerned about debt than any other year since 2007.
  • 71% of young people would like their parents to teach them about finance.

This strongly contrasts with adult’s opinions:

  • The majority of adults believe teens will be earning £25k at the age of 35.
  • Nearly 80% of parents don’t consider money a top priority to discuss with their children.
  • Despite teens wanting to talk to their parents about finance, only 36% of adults actually feel qualified to discuss it.

Andrew Cave from RBS Group Community Affairs said:

‘We know from our research that children want to learn about money, and we know that they instinctively look to their parents. But we also know a lot of adults don’t feel comfortable talking about money with their children, only 18% of them could very confidently describe what an APR is. That’s one of the reasons why RBS believes it’s more important than ever to educate young people about money in the classroom. We believe every child should leave school armed with the ability to manage their money and the skills to make the best financial decisions for their future.’

MoneySense Research Panel

This report is in its fifth and final year and in total has interviewed over 50,000 young people up and down the country. The aim of the five year project has been to speak to children between the ages of 12 and 19 to discover their opinions, attitudes and understandings of cash and how it works in the modern world.

Some of the key regional differences and trends since 2007 are charted here:

Regional Differences

Country Salary expectation aged 35 Reality
England 57,200 Current UK median salary aged

30-39 is £24,316. That’s a

difference of £32,074.

Northern Ireland £39,600
Scotland £53,600
Wales £46,600

Future Debt

Country Expectation of Debt Reality
England 37% Students starting university in 2012 should   expect their average debts to reach £53,400, according to the latest PUSH   National Study Debt Survey.
Northern Ireland 32%
Scotland 24%
Wales 30%

Money Management

Country % who learn about money


England 45% MoneySense has reached

70% of all secondary schools

since 2005 and taught over

2.5m young people.

Northern Ireland 56%
Scotland 57%
Wales 47%

Key trends across the last 5 years.

Learning about,

and keeping

track of money.

90% of young people are keeping track of their   money, up 10% on 2007 figures.

More than half of children used formal methods of   keeping track of money between

2007 and 2011.

90% thought it was important to learn about money   an increase from the

previous year.

Debt In 2007, 24% of young people thought they’d have   no debt by the age of 25. By 2011

this figure had halved to 12%.

More forms of debt were identified by young   people in 2011 compared to 2010.

Expectations of £30,000+ debt after university   increased, particularly in England:

8% to 33%.

Pocket Money In 2007, 27% of young people earned their own   money through a part-time job. This

Figure had reduced to 20% by 2011.

In 2007, 71% of 16-19 year olds and 89% of 12-15   year olds received pocket money.

In 2011, 79% of 16-19 year olds and 85% of 12-15   year olds received pocket money.

Savings Around a third of all young people had saved for   their longer-term future in 2008

(34%). This increased to 37% in 2011.

The percentage of young people who believe ‘It’s   important to Save’ reached 85%

in 2011.


What does APR mean – and why should you care?

There’s a saying that guns don’t kill but people do. Implying that the gun is just the tool, the inanimate object but the person holding it is responsible for their thoughts and actions.

Many credit providers appear to take the same view. It’s not the availability of easy credit that causes debt problems but people with many needs and wants looking for instant gratification. One of the issues I have with that argument is that while there is a general lack of financial education then consumers do not know the full implications of buying on credit or taking out simple, quick payday loans.

One of the main elements is a lack of understanding about the true cost of the borrowing, the bullets in the gun, the APR. The Annual Percentage Rate (APR) is used to provide a guide to repayment costs and provide a benchmark for comparison with other lenders.

In simple terms a loan of £100, or $100 taken out over a year at an APR of 10% would cost £110 ($110) or an additional 10%.

When loans or credit agreements are taken across several years it gets a bit more complicated but the principle is the same.

Factors Affecting APR

Several factors affect the APR at which a person can borrow, these can include:

An individual’s credit rating – the ‘safer’ you are in the credit provider’s eyes the lower APR you can obtain. If you are employed with no record of missing payments and perhaps a homeowner with other credit cards etc. then you will typically be offered better terms than someone without these.

For February 2011 in the UK lenders who advertised their APR rates must show representative rates. They may have a range of terms (prices) but must show figures as a representative example. This prevents people from seeing a rate advertised and assuming that this is a fixed price for every customer.

Secured or Unsecured – if you are borrowing as an individual or for business, if you can offer security or sometimes called collateral then you may receive favourable terms. The lowest APR rates are usually for mortgages which are secured against the value of the property.

Length of term – Banks and other financial companies are in the business of making profits. One of their main methods of doing this is by lending money and charging interest. If you wanted to borrow over 3 years to buy a car for example, they may charge a lower APR than a shorter term loan or overdraft. This means that they will be receiving interest over 3 years albeit at a lower rate.

Why is some APR so high?

Some finance companies and so called payday lenders offer short term loans at very high interest rates, ranging between 800 – 3600%. Their acceptance criteria is generally lower than high street banks for example and so their business model anticipates that a percentage of borrowers will default, or not be able to payback the loan. Customers who do pay their loans back are paying extra to offset those who don’t.

As the name suggests, payday loans are designed to be short term, typically less than 90 days. Therefore the full extent of the high APR figures is not generally considered. Borrowers are typically in urgent need and are looking at a solution to their problems rather than part of a sound financial plan.

Also payday loans will generally be smaller than other borrowing, perhaps limited to £500 or £1000. In this way the customer does not again see the full implications that a high APR brings.

Why should you care about APR?

In many cases it is almost inevitable that people will need to borrow money at some point in their lives. Whether student loans, buying a house, or financing a business. Other borrowing can in my view be more discretionary but society, advertising and other pressures may say different.

When looking at borrowing take a look at the APR and consider whether this is the only or most appropriate form of finance. Will the ‘loan’ be short term or long term and what level of repayment can you comfortably afford. Will this also be true should your circumstances change? Finally look at the overall cost of the borrowing added to the purchase price. A bargain purchase may not seem such a bargain once the full cost of borrowing has been added.

Fantastic information for parents and teachers

If you’ve got kids or teach kids you’ve probably wondered:

* How can I empower the children in my life to be the best they can, in school and out, so they experience success in all areas of life?

* What processes can I teach that will help them feel safe and able to cope with the stress and difficult situations they will encounter in life?

* How can I instill in a strong sense of self-confidence and self-esteem in my kids so they feel good about themselves and their abilities?

* How can I connect with and equip them with positive communication skills and behaviour patterns so they are able to overcome challenges, while expressing their feelings, wants and needs effectively?

* What techniques can I show them that will help raise their grades, increase their focus and concentration, while improving their overall mental, social and emotional well-beings?

*How do I teach life skills I’ve never been taught myself?

I think you will be very interested in Natural Intuitive Learning Life Skills for Kids Education Empowerment Event starting Tuesday, May 1 and get your questions answered by world renowned educational experts.

There is an excellent line up of experts – including some of my favourites Lisa Nicholls, Sharon Lechter, Bruce Lipton and many more

There will be 24+ experts in all sharing their best strategies, techniques, processes and best of all the information is FREE. Sign up here to register now:

More information

PS: Please help us help millions of children by telling your friends and family about it and talk about it on your Facebook, Twitter and blog if you have one.

Championing Your Children to Develop High Self Esteem

Studies show that high self-esteem is the #1 ingredient essential for developing happiness, fulfillment, rich relationships, and overall success in life. In the life of every child, usually sometime between birth and age 6, something happens to have the child doubt him or herself. Someone says or does something that has the child believe that he or she is flawed, unlovable, not worthy, imperfect.

This initial stressful incident is the first real realization that the child is not perfect and fails to measure up to society’s standards in some important way. The initial upset can be one of two types. The first assault could be an unkind word from a peer or authority figure, a spanking, an insult, an argument, a bullying or name calling episode. It could occur as a direct result of something the child said or did that provoked an attack on his or her sense of worthiness or ability to fit in.

The second type of self-esteem diminishing episode can be as a result of the child misinterpreting someone’s words or actions to mean that the child is flawed, unlovable, or defective in some way. In such a case, no insult or demeaning connotation was intended. The facts were that someone said or did something. The child mistakenly made up that there was something wrong with him or her as a result of what was said or done.

Daily, there are hundreds of opportunities for a child to misinterpret life in a way that tarnishes their self-image over the long term. A common example of such a misinterpretation can be when parents get divorced. What happened was the adults fell out of love or realized that they wanted to separate. What the child made up was that if he had only been a better boy and did a better job cleaning his room, or picking up his toys, mom and dad wouldn’t have fought so much and would still be together. The child may make up that he is bad and people leave him because of this.

Another example of this faulty reasoning might be an episode where the parents drop off a child for a week with a relative. Perhaps they feel they need a vacation or might need to tend to some business matter and decide that it would be easier for the child to be minded by a sitter. The child makes up that his parents don’t love him and that people want to get rid of him. With this sort of tendency toward faulty interpretation, there are literally thousands of opportunities for the child to attach a meaning to the situation that begins the process of eroding self-esteem.

The process of diminished self-esteem does not stop at such an initial decision regarding the child’s value. The child, armed with the belief that she is not good enough, now scans for additional situations that may serve as more evidence to reinforce this initial thought of being flawed. During such potentially upsetting events, the child reinforces this idea of unworthiness by further interpreting life events to prove the fact that she is defective. After years of accumulating such evidence, their self-image deteriorates further with every episode. Before long, there is no doubt in the person’s mind that there is something wrong with them. After all, they have created a self-fulfilling prophesy to cement this belief firmly in their self-perception.

Parents can do much to support their children to feel good about themselves and to champion their child’s self-image. They can continually reinforce the concept that no one is perfect and all one can do is their best. They can be a source of unconditional love, supporting the child at every opportunity and encouraging them to see themselves as worthy of affection, abundance, love, and trust. They can make sure that the child understands that they, as parents, might not always agree with the child’s behavior. However, they can continually reinforce that the child is NOT their behavior. Everyone makes mistakes and life is a process of learning and growing. No matter what mistakes the child makes, he or she must realize that they are always inherently good, lovable, and worthy.

Parents can continually reinforce that they love their children unconditionally. Children need to realize that even when they make mistakes and parents do not approve of their behavior, this does not affect their love for them or their sense of value. Children will benefit from knowing that they are loved for who they are, not just what they do.

Parents can speak respectfully to their children, reassuring them of their competence, capability, and inherent value. They can empower them to make their own choices whenever possible, fostering their belief in their own ability to make wise decisions and learn from any mistakes. They can give them responsibilities that nurture their self-confidence and belief in their abilities. Whether that looks like making their bed, helping with household chores, or selecting their favorite juice at the grocery store, each can serve as an opportunity for the child to grow in self-confidence.

Parents can consistently acknowledge their children for worthwhile qualities they see in them. They can get into the habit of finding something good about them every day and pointing it out. Parents can support their children to see what might be missing for them to be more effective with other people or in accomplishing their goals. Rather than focusing on their weakness and faults, they can empower their strengths and communicate that everyone has unique talents and gifts that make them special. They can support children to identify their passions and pursue their special interests and develop their gifts.

Parents can teach their children to interpret life with empathy. They can support them to imagine what it is like in another person’s world so they can better understand why people do the things they do. They can support their children to not take the reactions of others personally. When children realize that no one else can make them angry, sad or afraid, only they themselves can, they learn to not be reactive and easily provoked by others’ issues. Parents can teach their children to forgive themselves for mistakes they make. They can teach them the value of cleaning up any mistakes by speaking and acting responsibly. They can also teach them to forgive others, knowing that they are doing the best they can based upon how they see the world. This does not mean that we condone bad behavior. It means that we can better understand why others do hurtful things at times and separate out that they do them rather than interpreting that they do them TO us.

Parents can teach their children to have gratitude for their blessings in life. They can teach them that the world is an endless source of abundance for those who believe in themselves and their ability to attract good things. They can teach them to expect success, happiness, rich relationships, and abundance. They can also teach them to play full out for what they want, committed to their goals with a vision of success without being attached to any result.

Many mistakenly confuse high self-esteem with ego. It is important to distinguish between fostering high self-esteem in children, as opposed to creating ego-maniacs obsessed with themselves at the expense of others. High overall self-esteem means being competent and capable of producing a result in every area of life. This includes being effective in our relationships and in our communication with others with an appreciation for what it is like in the world of other people.  Those who care only about themselves with no concern for others do not, by my definition, possess high self-esteem.

It would serve parents to commit to themselves being perpetual students of personal development, knowing that their children will model their actions and their approach to life. It is with such an energy of respect, love, and acceptance that children will receive the tools they’ll need to grow into self-actualized, happy, and self-assured adults possessing high self-esteem.

Dr. Joe Rubino is an internationally acclaimed personal development trainer, life-changing success and life-optimization coach and best-selling author of 12 books available worldwide in 23 languages. He is the CEO of The Center for Personal Reinvention, an organization that has impacted the lives of more than 2 million people through personal and leadership development programs, providing participants with tools to maximize their happiness, self-esteem, communication skills, productivity and personal effectiveness. To subscribe to his complimentary newsletters, learn more about championing your self-esteem, communicating more effectively, life-impacting personal or group coaching, and transformational courses or to read about his books, visit his high self esteem for kids website