T. Rowe Price: Parents Let Kids Learn About Money The Hard Way
Experience the interactive Multimedia News Release here: http://www.multivu.com/players/English/7455231-t-rowe-price-financial-education/
LEARNING ABOUT MONEY THE HARD WAY
- Let kids make mistakes: 58% of parents let their kids make their own bad financial decisions so that they can learn from their own mistakes.
- Using credit cards and student loans as teaching tools: 52% of parents believe that their kids should have their own credit cards to learn about managing money and 61% think it's important for kids to have their own student loans so that they can learn about debt and responsibility.
- But kids aren't ready for the responsibility it brings: Only 21% of kids feel knowledgeable about credit and only 19% of kids feel knowledgeable about student loan debt.
- Kids don't think parents are great teachers: Less than half of kids (46%) say their parents are doing very or extremely well at teaching them about money and finances.
- Parents have some reluctance to discuss money: 72% of parents experience at least some reluctance talking to their kids about financial matters.
- Mostly because they don't want kids to worry: The most common reason cited for having some reluctance to discuss financial matters was that they don't want kids to worry.
- But kids think their parents worry: 61% of kids think their parents worry about money.
SCHOOLS HAVE A ROLE TO PLAY
- Parents want personal finance to be required for graduation: 75% of parents think there should be a personal finance requirement to graduate from high school, but according to the
Council for Economic Education, only 17 states have a personal finance course requirement.
- Schools are stepping up: In 2013, 3% of kids said they learned the most about saving and spending at school and 12% said they learned the most about investing at school. In 2015, 35% of students say that they learn more about money at school than they do from their parents.
- But, parents want schools to do more: 80% of parents don't think schools are doing enough to teach kids about financial matters.
HOW TIMES HAVE CHANGED
- More parents think financial education has a role in schools: 91% of parents feel it is appropriate for kids to learn about financial matters in school, compared with only 70% in 2010.
- More kids are getting an allowance: 70% of parents reported giving their kids an allowance in 2015. In previous years, we found that just 47% of parents in 2013 and 48% in 2011 indicated that they give an allowance.
- But allowance isn't free: Of the kids who get an allowance, about six times as many are required to earn their allowance (85%) than those who get it with no requirements (15%).
- Amount of money kids get for allowance is increasing: In 2013, only 2% of kids got
$51.00or more in weekly allowance. But in 2015, that jumped to 9%. Meanwhile, the lowest dollar range for allowances dropped between 2013 and 2015. 68% of parents reported giving $10.00or less each week for allowance in 2013, but only 50% reported the same in 2015.
- The number of kids with credit cards has nearly tripled: In 2012, 4% of kids had credit cards, but in 2015, 11% of kids have them.
PARENTS' FINANCIAL BEHAVIORS AFFECT THEIR KIDS
- Parents want to set a good example for their kids and think that they are: 69% of parents are concerned with setting a good financial example for their kids and 82% of parents feel they currently are setting a good financial example for their kids.
- But their actions don't reflect it: 68% of parents admitted to doing at least one of the following negative actions: lying about money, taking money from their kids' piggy bank, saying they can't afford something when they can, and using a "do as I say, not as I do" mentality when teaching kids.
- Kids pick up on the bad behaviors: 68% of kids suspect their parents have told them they can't afford something when they really can. And 40% of kids feel their parents use the "do as I say, not as I do" mentality when teaching them. 28% of kids know their parents take money from their piggy bank.
- "Spender" parents are more likely to have "spender" kids: Parents who identified themselves as a "spender" are more likely than parents who identified themselves as a "saver" to have kids that are also "spenders" (64% versus 52%).
- Saving for vacations almost as much as retirement: Only 44% of parents regularly save for retirement and 42% of parents regularly save for family vacation.
- Parents are not preparing for emergencies: 62% of parents do not regularly contribute to or maintain an emergency fund.
- And some are not preparing for their kids' college: Among parents who are not saving for college, the top reason given was that they can't afford to (66%), but more than one-third of those parents who say they cannot afford to also indicated they have money left over after paying monthly expenses (39%) and more than a quarter are saving for vacations (26%).
- More than half of kids know how much their parents make: 59% are aware of how much their parents earn annually. And 22% of those kids discuss it with their friends.
- Some spouses have secret accounts: 34% of parents keep at least one financial account that their spouse or partner doesn't know about.
ABOUT THE SURVEY
The seventh annual
Founded in 1937,
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/t-rowe-price-parents-let-kids-learn-about-money-the-hard-way-300055885.html
News Provided by Acquire Media