According to the T. Rowe Price Parents, Kids & Money Survey, parents on average grade themselves a B- when it comes to their total understanding of basic saving and investing concepts such as setting goals, the importance of saving, spending smartly, inflation, and diversification. The study of 504 moms and dads nationwide also revealed that 60% feel financial discussions do not happen nearly enough, and more than half are worried they could be doing more to prepare their children to be financially competent by age 18.
Although the current economic conditions have served as a catalyst to encourage nearly half of parents to have more conversations with their kids about money, the survey revealed that more than half of parents feel they have to periodically reinforce money lessons because their kids quickly forget them, according to a press release. In addition, while regular occurrences such as giving an allowance, shopping together, getting birthday money, or balancing a checkbook are ideal times to impart basic financial lessons, most parents do not always leverage these occasions.
Nearly half of parents neglect to utilize receiving money as a gift as a teachable moment, and the majority do not always capitalize on shopping or grocery store trips as opportunities to have a conversation about money and finances, the press release said. Forty-one percent of parents who give their children an allowance report that the children always or sometimes come back for more money after it runs out.
The majority (85%) of parents report that their child has a piggy bank, and nearly all say that having one sets a good example about the importance of saving. A majority of parents say the decision to take money out is shared, while nearly a third say the decision rests with the child alone.
More than two-thirds of parents say that speaking to children about money is a shared responsibility, but when one parent is solely responsible, the task falls to Mom nearly two-thirds of the time.
T. Rowe Price said in its press release that it has created a new Family Center section of its Web site, available at www.troweprice.com/trowefamilycenter . The site serves as a gateway to The Great Piggy Bank Adventure online board game which offers children lessons on goal-setting, saving and spending wisely, staying ahead of inflation, and diversifying assets, and the site links to T. Rowe Price financial tools, calculators, and investment information.
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