In a 2017, a T. Rowe Price survey, found parents are talking to their children about shopping, but are skipping conversations about household budgets, savings and financial goals. Close to 75% of survey respondents say they regularly have conversations with their children about money, but the focus is on spending—not the family’s current financial situation.
Are we sheltering our children from money?
The survey found that many parents think they strongly encourage their children to talk about money, the children only agreed 19% of the time. One in four parents discouraged their children from talking about money.
Children want to learn the financial basics – 34% want to know how banks and credit cards work; and 29% want to learn about managing money.
Protecting children from the financial challenges and decisions faced by adults may not be giving them an opportunity to form habits that can prevent financial stress when they are older. Understanding the source of money, choices involved with use, and it’s limitations form a basis that will impact attitudes and skills in management.
There are places to teach money management – the grocery store, or when paying everyday utility bills. Lessons taught by parents will reinforce and strengthen school based lessons in financial literacy. Basic skills become stronger when practiced. It can include balancing a checkbook, keeping spending records, comparing returns from savings to other investment options.
The T. Rowe Price survey shows that only half or fewer of parents have strong financial habits. One example – more parents save for a family vacation than have an up-to-date will. One in ten do not save regularly for retirement, purchase life insurance or save for a family vacation.
Where does your family fall in the 10% or 90%?