As a parent, guardian, or grandparent–what do you teach your kids about money and finances? What wisdom do you impart?
This is an important topic. You want your kids to do more smart things with money than stupid things. Parents want to prevent their children from making the same or similar financial mistakes that they made.
So, how are we doing?
Parents, Kids, and Money Survey
T. Rowe Price recently released their 4th Survey about Parents, Kids, and Money. The survey included 1008 parents and 837 children across different ages, regions, and social economic status, so it is a good pulse on the subject.
- 46% of parents are talking to their children more about money than compared to a year ago.
- Overall parents are confident in discussing financial matters with their children related to savings and goal setting.
- Kids want to learn about money: Top 5 topics kids want to learn more about: Saving, How to make more money, Allowance, Other, Investing.
- Children go to their mothers (54%) over their fathers (40%) when they have money questions.
- 42% of children are aware that their parents do not agree about money.
- 77% of parents have lied, blurred the truth, or withheld information about money from their children. 15% do so on a weekly basis.
- 22% of children think that a safe deposit box is the best way to grow money over time (other options were stocks and bonds).
- 9% of parents don’t know what financial advice to give to their children.
- How to spend smartly- 72%
- How to set a savings goal- 52%
- Spending/Savings tradeoffs- 46%
- How long it can take to achieve a savings goal- 34%
- Inflation- 19%
- Investing 16%
- Diversification- 11%
- Asset allocation 8%
- None of these 10%
Time to Step Up
From this survey it shows that parents are trying, but not doing enough to prepare our children to handle money.
The most startling question and result was:
Which of the following activities do you do with your own finances?
- Regularly set aside money to save or invest- 50%
- Pay down principal to reduce interest paid on debt over time -48%
- Set savings goals – 43%
- Review spending/savings tradeoffs before making purchases 41%
- Ensure investments are diversified 24%
- None of the above 14%
Lessons We Can Learn
2) Investing topics are the least talked about and hardly even mentioned, yet they are one of the top 5 topics that our children are interested in learning about.-an area of improvement indeed!
3) Fathers (me included) need to step up and take the leading role in teaching the next generation about about money. We can not expect our spouses and the mothers to take on all the responsibility of educating our children about money.
4) We must be honest with our children about money. Kids are smart and they often know when they are being lied to or misled. Those times of honesty can be the best teaching moments for our children.
5) What others lessons can we learn from these survey results?
How are we doing in educating our children about money? What are we really teaching them?