The “Parents, Kids & Money Survey” found 50% of parents do not save regularly for retirement, and 42% do not have an emergency fund for unexpected expenses.
Sixty-two percent of parents have discussions with their children about short-term saving only, and 14% discourage any money-related discussions with their children. As for saving specifically for their children’s college education, while 66% of parents agree it is important, only 41% save regularly towards this goal, with more parents saving for vacations (46%) than for college.
Most children surveyed (63%) were focused on short-term saving and/or spending. In addition, they are uncertain about how to meet savings goals, with 21% believing such goals are met by investing in stock and bonds, while 24% believe they will have to become famous to meet these goals.
On the positive side, however, the survey found children want to learn more about how to save. Twenty percent of them want to learn more about investing and how the stock market works. In addition, more children want learn about how banks and credit cards work (34%), inflation (27%) and diversification (20%). Overall, 71% of children feel they understand how to set money goals.
T. Rowe Price recommends parents promote good saving habits by setting long-term saving goals for things such as cars, college or retirement, as well as encouraging discussions with their children about saving. In addition, the firm recommends seeking online games and mobile apps to help their children learn both basic and ongoing information about how to save.
The survey, conducted in February, included 1,014 parents and 839 of their children ages eight to 14.
The survey results can be found here.