Recently, T. Rowe Price conducted the 2012 Parents, Kids & Money Survey in which they surveyed parents, and for the first time, their kids, about money related topics. Some of the results were not too surprising (at least to me). These findings include:
- Kids ages 8 to 14 want to know more about money matters, especially how to save and make money.
- Parents are more comfortable talking about bullying, drugs, and smoking than family finances or investing, and find talking about investing just as difficult as talking about puberty/coming of age.
- More parents feel that it is likely that life exists on other planets (59%) than Social Security will be available in its current form when their kids retire (26%) or that their children will become millionaires (39%) – I did find this one to be surprising.
- When asked what gives money the best opportunity to grow over a long period of time, fewer than half of kids (48%) and parents (49%) chose stocks over bonds and a safe deposit box, with nearly a quarter (22%) of kids choosing the safe deposit box.
If you have read some of my previous posts, you know how I feel when it comes to kids and money. I feel that it is so important for us (parents) to be as open as possible with our children so they can learn how to handle their finances. As a school teacher, I will tell you first-hand that schools do a lousy job of teaching this. It will be up to you to give your child the tools they need to make smart financial decisions as they age. This study shows how desperate many children are to learn about handling money properly.
I have had the honor of teaching a 3-part financial series with my pastor at our church. While preparing for this, he told me that members of our congregation would confide in him all sorts of problems such as drug abuse, marital infidelity and physical abuse. Despite being open about these sensitive issues, he said that money issues were a taboo topic. I don’t know if people feel embarrassed about the financial mistakes they have made but, in order to help our youth avoid these types of problems, we need to be open and honest about them. In fact, if you have made a financial mistake, I think it might even be a more valuable lesson for your child. All kids love it when their parents mess up. It shows them that we are human too. There has only been one perfect person that has ever walked on Earth and He died so we could make mistakes. When talking about your past financial mistakes, explain to your child that, they too, will mess up and it is ok. The important thing is that we learn from our mistakes and become a stronger person because of them (this can hold true in areas other than money). In fact, a lot of people attribute their success due to earlier failures.
Now, more than ever, it is important to give your child a financial education. Don’t let your child be a part of the majority that wants to learn more about money from you. These may be some of the most important lessons you ever teach him/her.