Kids, Parents, and Money
When parents were asked to specifically describe what they have done to teach their kids about financial matters: 56 percent of parents can name only one example; 31 percent cite two examples; and 8 percent say “nothing” or “don’t know.”
Teaching your child about managing money is an ongoing process, one or two examples of money management are not sufficient to raise financially responsible children. If parents don’t teach their children about money who will? Statistics show that only about a quarter of these kids will learn financial information in school and half will ask advice from their friends. Who is to say that their friends will serve as good role models? It is no wonder that most kids fail a basic financial literacy test.
If parents want to be guaranteed that their children will be financially literate, they must step in and take control.
Ironically, 81 percent of parents who feel they do a fair or poor job of managing their money still consider themselves effective in giving their kids financial advice. A new survey by the Teachers Insurance and Annuity Institute College Retirement Equities Fund Institute finds that 55% of parents said they roll over credit card debt every month. And, less than 45% of the parents said they make a budget and stick to it.
So it appears that parents need to not only educate themselves about financial planning, they must also put into practice what they learn. Only then will they be the most qualified to teach their children about financial empowerment. The legacy of financial security they will pass to their children will be well worth their effort. If they don’t take control, the consequences can be devastating for their children.
Keep in mind that you don’t have to be the parent of a child to help with their fiscal education. You could be the aunt, grandparent or close friend of the family and still have a tremendous impact on their lives. Often the parents put their child’s fiscal education on the back burner because they are not comfortable managing their own money, so a little nudge from a relative or friend might be just the impetus to get things going.