By Kelly Hodges
As a parent of four young children, I am always on the lookout for advice on how best to equip them with the financial knowledge they will need to succeed later in life. I am a strong advocate of including children in discussions of household finance, budgeting, and goal setting, as well as allowing them to experiment with their own micro-economy via an allowance.
I recently ran across this T. Rowe Price 2012 Parents, Kids, and Money Survey conducted with parents and their 8-14 year old children. The goal of the survey was to understand the basic financial knowledge, attitude, and behaviors of parents and their children. The results were interesting but not surprising; parents could do a whole lot better imparting financial wisdom onto their children. Here are a few of my favorite stats from the survey for you to review and compare how you and your family stack up.
1. Parents are more comfortable talking about bullying, drugs, and smoking than family finances or investing.
2. Nearly 1/3 of parents say they avoid talking about their family’s financial situation with their kids.
3. Only half of parents (51%) are teaching their children how to set a savings goal. Only 46% are teaching about spending/savings trade-offs. Even fewer are teaching about inflation (19%), investing (16%), diversification (11%), and asset allocation (8%).
4. Many parents aren’t setting the best example for their kids when it comes to their own finances. Only half of parents regularly set aside money to save/invest, only 43% set savings goals, and only 24% ensure investments are diversified.
5. When asked what gives money the best opportunity to grow over a long period of time, fewer than half of kids (48%) and parents (49%) chose stocks over bonds and a safe deposit box. 22% of kids chose the safe deposit box as the best opportunity to grow money.
6. When asked what money topics they wanted to learn more about, 45% of kids didn’t know or couldn’t name a money topic.
As parents we are responsible for the financial education of our children. They can’t afford for us to fail at this task. Do your part today!
Thanks for reading and have a great weekend.
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Twitter: @FrugalFinance1 and @seeitmarket Facebook: See It Market
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of her employer or any other person or entity.
