T. Rowe Price has released the results of their third annual Parents, Kids & Money Survey and the results present a contradiction. While most parents, 86 percent in fact, feel they should be responsible for most of their children’s financial education; they also express the feeling that they are unqualified for the job.
Only 28 percent of parents consider themselves competent to teach their children the basics of personal finance; concepts like goal setting, saving, smart spending, inflation and diversification.
The majority of parents find it very difficult to discuss finances with their kids; as difficult as having the birds and bees talk –what?
Stuart Ritter, a certified financial planner with T. Rowe Price and a father of three, says,
“There are opportunities each and every day to share important lessons with children, and with kids able to grasp many of these important financial concepts at a young age, these conversations can start as early as elementary school, if not sooner. Parents don’t need to be experts, but they should be able to share the basic tenets that will put their children on the right financial path.”
So how do you start a conversation, with your kids, about money, if you’ve never had one before?
Ritter suggests you:
- Start by taking advantage of teachable moments, while you’re grocery shopping, going through the household bills or planning a vacation.
- Help your kids set short- and long-term savings goals for themselves
- Help them prioritize their spending. The short-term enjoyment of a chocolate bar isn’t worth the money, if it compromises savings for a long-term goal, like a toy.
- Have open communication about the family finances, even if you’re not discussing the actual figures, you can still talk about the situation. Also, watch how you respond to money issues. Your kids see everything.
- Make the money conversation fun.
In the end, it’s just a numbers game.
In the survey, parents indicated that they turn to online games and websites to help reinforce the financial lessons they are trying to get across to their kids. Good News! T. Rowe Price has partnered with the great minds at Walt Disney Imagineering and Walt Disney Parks and Resorts Online, to put together a teaching tool to help kids navigate personal finance. It’s called The Great Piggy Bank Adventure.
Through play, kids learn how to set financial goals, make tough decisions about spending and saving and gain an understanding of inflation and diversification. It’s fun; check it out for free online. The game is also part of an interactive exhibit at ENNOVENTIONS at Epcot, Walt Disney World Resort, in Florida.
Many parents indicated, through the survey, that finance has become a more regular topic of conversation with their children, over the past year. That’s a good thing. As we move out of a recession, it’s valuable for adults to pass on the experiences they’ve gained from the past few years.
I never understood the stigma around personal finance. It’s just money. It’s a tool. If it’s used well, it makes your life better, if it’s used poorly, it makes your life worse. The more experience and understanding a person has of money, the better equipped they are to manage it. By starting financial education early, parents can feel confident that their child will enjoy success. – Jen R, Staff Writer
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