The Role That Good Money Habits Play For Children

(3BL Media/Justmeans) – We need to encourage children, supported by their families, to learn about good money habits, especially in today’s complex financial world. T. Rowe Price’s 2015 seventh annual Parents, Kids & Money Survey conducted in the U.S, gives some insights into the way American families relate to money and includes some key findings. ‘Spender’ parents are more likely to have ‘spender’ children; many families struggle with saving. Only 44 percent of parents regularly save for retirement and 42 percent save for family holidays. Many families are not preparing for emergencies, with 62 percent not contributing or maintaining an emergency fund. Fascinatingly, some spouses have secret accounts, with 34 percent keeping at least one financial account that their spouse or partner doesn’t know about.

This T. Rowe Price survey reveals that parents’ financial behaviours do affect their children, as those who believe they are setting a good example for their kids are not because of their actions. Sixty-eight percent of parents admitted to doing at least one of the following negatives: lying about money, taking money from their child’s 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. Children pick up on these bad habits, with 68 percent suspecting their parents have told them they can’t afford something when they really can, with 28 percent knowing their parents take from their piggy bank.

Sadly, youngsters do not feel ready for the responsibility money brings. Only 21 percent feel knowledgeable about credit and a low 19 percent feel confident about student loan debt. The number of kids with credit cards has nearly tripled - in 2012, only four percent had credit cards; in 2015, 11 percent have them.

Financial learning is an important part of education, working best when schools and parents together teach money matter, reinforcing lessons from the classroom in daily life. Schools in the States are stepping up. This year, 35 percent of students say that they learn more about money at school than they do from their parents. Children don’t think parents are great teachers, with less than half saying their folks are good at teaching them about money and finance. Many parents actually don’t want to talk about money to their children because they don’t want them to worry, yet 61 percent believe their parents do worry about finances.

Encouraging parents to talk about money matters weekly, T. Rowe Price has created, providing free online games for youngsters, lessons for educators and tips for parents focused around the financial concepts of goal setting, spending versus saving, inflation, asset allocation and diversification. Since 2009, T. Rowe Price has used online games and experiences to engage the next generation in learning about money matters and will soon launch Star Banks Adventure, an online game and mobile app designed with a matching concept that reinforces learning by engaging kids in an epic adventure to save the galaxy from financial chaos.

Photo Credit: Wikipedia