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£17 for milk? Kids overestimate cost of living

£17 for milk? Kids overestimate cost of living

Category: Money
Author: Lieke Braadbaart
Date: 25/05/2018

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

As children grow, they are gradually taught the skills and knowledge they will need to thrive as adults: what kind of job they might want, and what they will need to get it, how to cook and do their own laundry, etc. New research from Halifax suggests that, even if children help out with the shopping, eight to 15-year-olds don't hold very realistic ideas of how much things cost, with a pint of milk estimated at £17.

The surveyed kids furthermore expected a loaf of bread to cost £15, while the weekly food shop total was thought to be £240, instead of the actual average of £58. This may seem like minor details that will get rectified in time, but it's important for future grown-ups to get a handle on what things cost, so they can budget accurately, avoid bad deals and not spend the rest of their lives either in debt or dependent on their parents.

The differences between expectations and reality are even starker when looking at the cost of a car, which kids estimate at £67,000 compared to the actual average of £18,000. And how would they pay for this all? Well, they expect to earn £1.5 million a year – though the average they wanted to earn was £4 million.

Even the more realistic figure is still 50 times the current average salary, which means these kids could be in for quite a shock. Equally shocking could be finding out that their school teacher does not make £110,000 per year (salaries start from £23,000), although the kids weren't far off when estimating the salary of a Premier League footballer at £4 million (they 'only' make £2.6 million on average).

All of this means that parents might have a little more work to do to help their kids understand the value of money, although four-fifths of surveyed parents insisted their offspring already understood. One helpful way to teach them the cost of things is to set up a children's savings account. This should teach them the value of saving, how interest and bank accounts work, and once they decide to buy something with their savings they'll start to know how much things really cost.

Most importantly, don't be afraid to talk to your kids about money. And the next time you take them to the shop, maybe point out the real cost of a pint of milk.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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