Money shouldn’t be a family secret, says debt advice charity

Parents should be more open with their children about the family budget if they want them to grow up with a sensible approach to debt, says national charity Debt Advice Foundation

Most parents shield their children from any discussions of money, so they grow up believing that the whole topic should be kept secret.  Add this to the lack of financial education in schools, and the result is that many young people have little or no understanding or experience of balancing income and spending, or of how to avoid unmanageable debt. 

The comments follow findings by a study* for the Co-operative Bank which suggests that whilst nearly two thirds (62%) of people in relationships have individual debts in the form of credit cards, overdrafts, loans and mortgages, over a tenth (13%) have not disclosed this to their partner.

Men responding to the survey admitted to being £14,228 in the red.  However the debt levels of women respondents were higher, at £22,418.

Linda Isted, for Debt Advice Foundation, said: “There are two very different issues here – secrecy and the higher debt levels of women. 

“Honesty and openness within relationships takes in far more that just debt, of course, but we strongly believe that people resist discussing money and budgets because they are often embarrassed at their own lack of knowledge.  Few children receive effective financial education in schools, and their parents try to protect them from their own money worries.  The result is another generation that doesn’t understand about budgeting, and struggles to manage its money from month to month.

“As far as women having high debt levels is concerned - this is not all about shoes and handbags.  In the vast majority of households, women take responsibility for the day to day running and expenditure, so there is every chance that her name is going to be on the most used credit card, the store card, the overdraft and the short-term loan.   She is inevitably the one who has to find money for new school shoes, for birthday presents, and for the emergency repairs and replacements around the house.

“At Debt Advice Foundation it is our experience that, while a majority of our callers are women, they are ringing about debts which are as likely to be their partner’s or in joint names as their own.  They also get into difficulties because they are trying to help with their children’s debts.

 “Behind every one of these situations is the stark fact that very, very few of us actually know precisely how much money we have available to spend each month after we have paid our housing, work and living bills, and how much credit we can afford to take on.”

*For more information on the study, which is the third in a series of reports by the Co-operative Bank on ‘Modern Families and Households', go to: http://www.co-operativebankinggroup.co.uk/servlet/Satellite?c=Page&cid=1326094872357&pagename=Corp/Page/tplCorp&currart=1346134400711&currmth=8