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Teaching kids about money
By Linda Stern
WASHINGTON (Reuters) - The vast majority of parents say they are good financial role models for their children … but they may be kidding themselves. More parents teach their kids how to shop rather than how to save.
Here are some ways to be good role models for your kids and also to teach them the basics of money.
* Give them some. An allowance is crucial to a child’s ability to learn to manage money.
* Match savings.
* Make them work for it.
* Model good behavior.
* Talk about family choices.
* Increase their responsibilities as they get older.
Don’t worry about it all sinking in at once. Some kids are just more money oriented than others, just like adults.
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Another tip to teach children about money -
Have them create a budget - this encourages them to learn how to spread their money out - a major lesson that many adults still do not get!
I came across this post and was curious to know more about the claim that a “vast majority of parents say they are good financial role models for their children.” A 2004 Northwestern Mutual survey, “Kids Learn Money Lessons Early at Home, But Parents Lack Confidence as Role Models, Survey Shows,” noted that “…almost half of parents feel they don’t set a good example for their children when it comes to handling money. An equal number believe they miss the mark in discussing more advanced financial topics with their children.” This survey was done four years ago, though, so if there is newer data noting the opposite, I would like to add that to my research database. Please let me know.
Great question John -
The article referenced a Parents & Money survey conducted by Kelton Research, a research consulting firm, on behalf of Charles Schwab. The nationally-representative online survey polled 1,000 American parents with teens between the ages of 13-18 to better understand their views, behavior and knowledge of spending, saving, borrowing, and earning money. The survey findings have a margin of error of plus or minus 3 percentage points at the 95 percent confidence level.
The specific item was:
Most parents think they are good financial role models – but there’s room for improvement:
and
o Three-quarters (75%) of parents characterize themselves as good role models.
o Overall, more moms than dads think they are successful in raising “moneywise teens (83% of moms vs. 72% of dads).
o One third (33%) of parents say their spouse or partner is not a good financial role model.
o Most parents describe themselves as a “Quick Spender” (52%) vs. a “Stellar Saver” (48%).
the full survey can be found at here.
Thanks for the question, you caused me to learn a little more too, and feel free to suggest related sources that you think would be interesting, valuable or both.
Jim,
Thank you for directing me to the Charles Schwab survey. Very helpful.