Kids and money
Parents on average give themselves a B- when it comes to serving as financial role models for their children, according to a new survey by Baltimore's T. Rowe Price Group.
More than a third of parents gave themselves a C or lower for instilling saving and spending habits.
The survey, which polled 1,008 moms and dads of children ages 8 to 14, also found that:
-- 86 percent of parents feel they should have primary responsibility for teaching financial literacy to their children.
-- Parents give themselves a B grade for their personal knowledge about money.
-- Only 28 percent of parents say they are very prepared to discuss basic financial information such as setting goals, saving, spending and diversification.
-- Parents say it's easier to discuss drugs and alcohol with their kids than family finances.
Here are some tips from Price's Stuart Ritter, a financial planner and a father of three:
Take advantage of everyday teachable moments – such as going grocery shopping, opening the household bills or planning a family vacation – to reinforce financial lessons and make them more memorable.
Help your kids set specific savings goals – both short- and long-term – to provide real-life incentives and make the general advice to “save” more concrete. This will also better equip them to make smarter spending decisions.
Emphasize prioritization and focus on tying spending decisions back to the goals when your kids want something else. This can be a better approach than simply saying “no” and helps put the decisions in a context they will understand while making it easier to discuss the trade-offs.
Have open communications about the financial choices the family has to make and be careful about how you react to money issues. While you don’t need to reveal all financial details such as exact household income, it’s important to let kids know that the topic of money is not taboo and is open for discussion.
Make money conversations fun – which will better engage your kids and avoid the eye rolls that tend to accompany these types of discussions.
Have you had money conversations with your child? When did you first begin talking about money issues?
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Comments
Teaching financial habits isn't a light task either, it requires consistency and persistence.
Some interesting web based tools are appearing to help parents along the way. Luckily it's a space that is getting increased attention.
Posted by: Kyle | April 5, 2011 4:35 PM
The most important part of financial parenting is setting an amazing example for the kids to watch, listen and learn from. When you're doing the right thing as grownups, it's so much easier to instill those right things in your kids.
Posted by: Elisabeth Donati | April 13, 2011 9:31 PM