When it comes to teaching kids about money, too many parents are still passing the buck.
Rather than making it part of their routine to talk to their children about spending, saving and other money matters, many parents prefer to let schools handle the responsibility, according to a new survey released by the T. Rowe Price financial services company.
And when kids screw up and make a money mistake, the survey noted, many parents are also reluctant to engage in those conversations.
Those are among the key takeaways from T. Rowe Price’s 2015 Parents, Kids & Money Survey of 1,000 adults and 881 children ages 8 to 14 who were interviewed in January about their financial knowledge, attitude and behavior.
Among the adults polled in the seventh annual study, nearly three-quarters expressed at least some reluctance to talking to their kids about financial matters. Various reasons hindered why parents didn’t share much with their kids about money, including not wanting to burden them with problems about the college fund or the household budget.
From the kids’ perspective, less than half felt their parents were doing “very or extremely well” at teaching them the financial facts of life.
Stuart Ritter, a senior financial planner at Baltimore-based T. Rowe Price, said parents need to put aside any reluctance to discuss money matters and “find a balance between providing firsthand experiences for kids and talking about finances.”
While there is value in letting kids learn from mistakes, Ritter said, parents should also regularly discuss money and provide context and guidance.
One cause for optimism is more schools are stepping up and providing personal finance and economics classes — and students are learning. While about 15 percent of kids polled by T. Rowe Price in 2013 said they learned more about money matters in school than they did at home, that number climbed to 35 percent in the latest survey.
Eighty percent of the parents polled want schools to do more. That’s worrisome, given the tight resources, finances, and schedules many teachers are dealing with today. It also underscores to me that many parents would rather opt out than tackle money matters with their kids.
Other findings from the survey:
▪ About 70 percent of parents reported giving their kids an allowance this year, up from 47 percent two years ago. The vast majority of children are required to earn their allowance through chores or other household responsibilities.
▪ The number of young teens with credit cards has nearly tripled since 2012 to 11 percent in 2015.
▪ Parents who labeled themselves as “spenders” are more likely than parents who identified themselves as “savers” to have children who model their behavior.
One final point: More than half the kids said they know how much their parents earn, and nearly a quarter of those children share that information with their friends.
So if you want to shape the discussion with your 14-year-old about what’s in your paycheck and how the bills are paid, now is the time to start speaking up.
To help parents and their kids better understand money matters, T. Rowe Price has created an online resource tool called MoneyConfidentKids.com. The firm is also planning to release an online game and mobile app called Star Banks Adventure.