2015 marks the 7th annual release of the “Parents, Kids and Money Survey” conducted by T. Rowe Price (find the report here). The idea and purpose behind the surveying of 1000 parents and 881 children is “To understand the basic financial knowledge, attitudes, and behaviors of both parents of children ages 8-14 and their children ages 8-14.” The survey was split evenly with 50% men and women participants and was conducted over the span of a week in late January 2015.
The survey results are TEEMING with all sorts of factoids relating to, well, parents, kids, and money.
A quick search on T. Rowe Price returns this information on the company, “T. Rowe Price is an American publicly owned investment firm, headquartered in Baltimore, Maryland. It was founded in 1937 by Thomas Rowe Price, Jr.. The company offers mutual funds, sub-advisory services, and separate account management for individuals, institutions,retirement plans, and financial intermediaries. Additionally, the organization offers investment planning and guidance tools.”
One might gather, these folks know a thing or two about money.
So, what’s the big deal?
In conjunction with the survey T. Rowe Price published a press release with some of the major takeaways from the survey.
Conversations about money + allowance = kids who can handle money!
“T. Rowe Price’s 2015 Parents, Kids & Money Survey revealed that having conversations with kids about money is critical to raising financially savvy kids. There is also a significant benefit in letting kids experience money, and providing an allowance is one way to do that. Parents who combine conversations with experiential learning are most likely to have financially smart kids.”
Kids with parents who combine both consistent conversations with their children in addition to letting kids experience money through allowance and the ability to make financial mistakes (the parents providing kids with the most learning opportunities) are significantly more likely to have knowledge of managing personal finance (68% vs. 0%). These kids are also more likely to feel knowledgeable about money (70% vs. 15%).
Talk about money, YOUR KIDS LISTEN!
Have financial conversations with your spouse or partner, heck, you can even argue! Kids with parents who actively discuss financial matters (or argue about them 67% vs. 44%) are more likely to feel smart about money(45% vs. 24%), think they’re parents are doing a good job at teaching them about money(58% vs. 32%), say they are knowledgeable at managing personal finance (39% vs. 16%), AND think they will go to college (86% vs. 72%). Parents who consistently discuss finances are more likely maintain a household budget (79% vs. 59%), contribute to savings(91% vs. 82%), contribute to a college fund (65% vs. 41%), have an emergency fund (88% vs. 75%) and ultimately exemplify healthy financial habits.
Let your kids experience money, yeah, let them make mistakes too!
In a recent press release regarding the newest survey, Judith Ward, a senior financial partner at T. Rowe Price is quoted says this about letting kids experience money, “If parents talk about money but don’t let their kids experience it, it’s like telling them how to play the piano without letting them touch one and expecting that they’ll be able to play a sonata. Conversations can guide experience, and experience can put those conversations into practice—the two work together.”
Kids with parents who let them experience money through allowance are more likely to feel smart about money (40% vs. 25%), feel like their parents are doing a good job teaching them about finances (52% vs. 31%), and are even more likely to discuss saving for college with their parents (62% vs. 45%). Allowing children to make money mistakes is also a big part of the learning process. These kids feel more knowledgeable about money in general (44% vs. 26%) and about managing finances (36% vs. 16%).
Check out the complete press release here for more stats!
Parents, you know talking to your kids about money is important, but it’s just one more thing to add to the list. Piggybank offers parents a way to integrate financial discussion and allowance into the everyday using a comprehensive app and tailor made financial education. To learn more and sign up please visit getpiggybank.com