On Finance Issues, Parents from Mars while Kids from Venus

June 16, 2009 (PLANSPONSOR.com) - Only 23% of 18 to 22-year-olds in a recent survey said they understood what a 401(k) was, while 73% of parents knew about the popular workplace retirement program.

A Wells Fargo & Company news release said that was but one example of an apparent disconnect between parents and young people about managing personal finances.

According to the poll,21% of the young people were concerned about the U.S. stock market while 41% of the parents expressed that same concern. While 22% of youth polled were concerned about having enough money to finish college, for parents, the figure jumped to 46%.

Parents’ top three financial priorities for their children: find a job, pay off student loans and pay off their credit cards and debt. The young people’s response: buy a car, find a job and buy a home, the survey found.Ninety-five percent of parents say they’re confident their children will attain their financial goals, but only 5% of the young adults surveyed said they had such confidence about their personal finance goals.

“The survey shows there’s a huge knowledge gap between the generations when it comes to money management and there’s a need for more education,” said Stephanie Smith, senior vice president at Wells Fargo Internet Services Group, in the news announcement.

When it comes to budgeting, 95% of the young people polled said a budget is not effective for them, compared to 92% of parents who indicated budgets are effective. Parents are more likely to maintain a paper-based or computer-based budget while the young people polled are evenly divided on how they keep their budget – paper-based, computer-based or online.

Wells Fargo surveyed more than 1,000 parents and 600 young adults, aged 18 to 22, to identify similarities and differences in behaviors and attitudes toward personal financial management.