Parents constantly tell me how hard it is to talk with their kids about money. But until I read a new survey on the topic, I had no idea how bad the problem really is. It turns out, parents would rather talk with their children about notoriously tricky subjects like drugs, smoking, and bullying than about family finances.
I get it. Money is an awkward subject to begin with. Adults usually don’t talk with their own parents or friends about it. And the topic of finances can seem complicated when compared to drugs and smoking, where the lesson for kids is a simple: “Just say no!”
Less than half of parents do this:
A survey recently released from investment firm T. Rowe Price paints a grim picture. Although 82 percent of parents say they’re equipped to at least discuss the basics—setting goals, inflation, saving, etc.—they aren’t following through. Less than half are teaching kids how to decide when to spend and when to save, one of the most fundamental money-management lessons there is. And more than three-quarters of parents don’t always tell their kids the truth about money issues, including the family’s actual financial situation.
Researchers also talked to kids (ages 8 to 14) themselves, who we know say the darndest things! The results were pretty revealing. Despite the stereotype of dad as the family money manager, more than half of kids said they go to mom first with questions about money. And nearly half say they know their parents aren’t always on the same page about financial issues (so those closed-door conversations aren’t so secret!).
The good news.
It’s not all bad news. The survey found that 76 percent of parents do have somewhat regular conversations about money with their kids and 92 percent of kids say their parents do a good job of teaching them about money. When asked to dole out grades, kids, on average, give their parents a B+. Moms and dads aren’t acing the class, but we’re not failing, either.
A simple way to get started.
Truth is, you don’t have to be a personal finance pro like me to teach kids about money. Moms and dads do it every day, and even when they’re not entirely confident, they do a great job. I was especially delighted to see a local news clip from South Dakota, showing a mom using the Money as You Grow site.
While her 11-year-old son navigated the site, and her five-year-old son sat on her lap, Shelly Haan read aloud an activity on the website: “Identify items that cost money, such as ice cream, gas for the car, or clothes.” This is exactly how I (and the rest of the President’s Advisory Council on Financial Capability) hoped families would use this resource, and what a thrill to see it in practice!
© 2012 Beth Kobliner, All Rights Reserved
Beth Kobliner is a personal finance commentator and journalist, the author of the New York Times bestseller “Get a Financial Life: Personal Finance in Your Twenties and Thirties,” and a member of the President’s Advisory Council on Financial Capability. Visit her at bethkobliner.com, follow her on Twitter, and like her on Facebook.