:::: MENU ::::

Parents’ Attitudes About Finances & Kids

by

T. Rowe Price Just Released its 6th annual “Parents, Kids & Money Survey.”  For the past three years I have read this survey and I like it because I believe that teaching my kids good money habits is a crucial and important parental responsibility.  And as I look at the results of the survey, I can usually get an understanding of how other parents are handling this situation.

Some of these results really caught my eye and made me ponder:

  1.  Just about half the parents that were surveyed use money to encourage good behavior from their kids.  This is something I am very against, I don’t plan to give our kids money for good grades and I surely won’t use money to try to buy off bad behavior.  These are qualities that are expected in my household.  Same goes for chores.  Now  I totally believe that I should give my children money and teach them the responsibilities that come with said money.  I just haven’t decided on how to go about doing this just yet.  My sister is actually fighting with her son right now, because my parents gave him $50 for straight A’s on his report card.  He expects his mother to pay him $75 for doing so.  My nephew is 10 years old!
  2. Thirty percent of parents raid their kids’ piggy banks.  Wow!  This is simply astounding to me, but maybe I am just reading into all wrong.  Maybe it is more innocent than it sounds – the pizza guy is knocking on the door and you realize you have no cash for a tip.
  3. Sixty One percent of children shop online – including 54 percent via mobile apps.  The immediacy of online shopping is making the world into something totally different.  We already know that our grandparent’s time was for saving, and now this society is all about spending.  But this is turning into a whole new ballgame with mobile apps that tend to prompt spontaneous spending.  Kids definitely think of currency differently than we did growing up due to so many transactions being digital now a days.
  4. 74% of parents admit to being reluctant to talk with their kids about financial topics.  The primary reason was that their didn’t want to have their kids worrying about finances.
  5. More than half of kids expect their parents to pay for most or all of college.
  6. Parents are open to finances being taught in schools:  87% of parents agree that it would be appropriate for kids to learn about financial matters in school.  The fact that it is not, leads me to believe many things.

Now there were much more discussed in the press release.  I suggest reading it and telling me what you all think was important findings in this survey!


18 Comments

  • Reply Joley |

    “Thirty percent of parents raid their kids’ piggy banks.”

    I work at a bank and you would be amazed at how many people open savings accounts for their kids and then come in and take out all the money and rarely put it back. That being said I do work in a not so great part of town so maybe at other branches it isn’t like that but it’s crazy to me that someone could decide one day “oh I need to start saving money for my kid,” and then a couple months later come in and take out everything but a few cents.

    • Reply Walnut |

      One aspect here is, do you really need to save money for your kid? If the parents have debt and need to save for retirement, they really should prioritize that before savings on behalf of the child. While I will someday help my child with living expenses during college, I will not pay their tuition or cosign their loans. I will encourage my children to work, save their money and make smart decisions, but will not feel any guilt if they don’t have a big 529 plan to draw from.

      • Reply Jim |

        Here’s my thinking to that. You can and should help your children if you are able to. But I have to agree with Dave Ramsey here, and say that saving for my retirement should be my top priority. I don’t want to be hassling them to be taking care of me in the future.

      • Reply Anonymous |

        Frankly, I don’t think you should even plan on having kids if you have the attitude that you are going to turn them loose when they are 18 to figure life out for themselves. That is why so many young people have crippling debts today, especially with student loans. Their parents just don’t want to make any sacrifices. I saw this firsthand with my own parents. They passed all expenses down to their children–dental work, orthodontia (two of us six kids paid for this as adults), college education etc. Meanwhile, when I was a child, my parents bought three other properties aside from their own home and took nine trips to Europe!

        I vowed it would be different with my family, and it was. My kids know the value of a dollar and hard work, but my husband and I were determined to help them. We made it a joint effort as a family. The kids made excellent grades, got scholarships, worked jobs and hubby and I worked hard too. Our three kids graduated from prestigious colleges debt free. Are hubby and I loaded for retirement? We have enough, but we are not wealthy. But wealth to us is making sure that our kids enter life unshackled by burden and debt. They have good jobs, bought homes, started families etc. To me, those are the true riches! Remember, there is a big difference between can’t and won’t when it comes to helping your children.

    • Reply Ashley |

      I agree with Walnut and Jim (and Dave Ramsey) that if you are in debt then you may not be in a position to save money “for your kids” because you need to get your own finances in order first (like putting on your own oxygen mask on a plane before helping your child).
      On a random note, though, I am the child of this 30%!!!! I remember having a little glass jar I would save money in when I was about 5 or 6 (mostly change and a few dollars here and there), and finding “IOU”s from my Dad. I distinctly remember asking my Mom what it was and seeing the surprise/anger in her face. She brushed it off, but looking back through adult eyes I’m sure she was livid that he would “steal” from me. I guess leaving an “IOU” slip is better than nothing (in theory – it shows intent to repay the money), but I don’t ever remember being reimbursed. Of course, my parents provided all my needs for me so the money wasn’t a necessity but it’s just very off-putting to look back and have this memory of my own dad. yikes!

  • Reply Susan |

    I was looking forward to reading a post setting forth specific things you are doing to alleviate your debt. This is the second week in a row that you have just chatted about other things. I will give you that last week’s two posts were a little bit about this history of why you are in debt, but this week’s post is something any of us can read on MSN Money or similar.

    What’s going on with your debt payoff?

  • Reply Jim |

    Not everyone of my posts is going to be about what I am doing to alleviate my debt. If that was the case, I would really get burned out, especially since there isn’t much to report during the times between my debt payments.

    My wife and I get paid at the beginning of each month, and have to budget our money for the entire month at that time. I can’t give updates to what my amounts, when I don’t know the amount before my next statement.

    I have been reading this since Tricia, and this is something I missed reading about. These are things that interest me… yes you could read it on MSN Money, and other sites similar. Look at every blog out there that is talking about getting out of debt, not every single post is what they are doing with their debt.

    I am sorry that it is what you want to see, but I don’t see the sense of posting up one paragraph a week on what is exactly going on with my debt. Now I don’t see how I have done this for two weeks in a row, last week I’ve talked about my past and what brought me into debt. The second was a post on the ramifications of letting debt get the best of you.

    • Reply KLM |

      I think there are other things you could include though, rather than basically taking other articles and posting them here:
      How is your online business? Is this what contributes to your business income in your budget? Are you making money at it? How are you looking to increase that amount?
      What happened with your cereal venture?
      How are you helping your wife’s business get off the ground?
      How are you doing at developing your budget?
      What are you and your wife struggling with regarding debt payments?

      • Reply Jim |

        You are right KLM, there are plenty I could have included, I just wasn’t thinking. These questions will be answered shortly

    • Reply Andrea |

      I disagree. The same article you link to states that children whose parents pay for college have higher graduation rates. Which means those who are more likely to take out loans are less likely to be in position to pay those loans back.

      How different would things be for you right now with few student loans? If your parents could have helped, do you honestly think you would (or should) have turned them down?

      We plan to pay for our children’s undergraduate education at an in-state school. We believe it is part of being a parent – you do what you can to give your children a firm start in life. An education is just one part, but a vital part, of that obligation.

      • Reply Jessica |

        The article discusses higher graduation rates at Elite colleges and parents who will use connections to get their kids jobs. I absolutely would choose to pay for my own schooling given the choice, I just think it creates a sense of pride in what you have accomplished on your own

        • Reply Kiki |

          I have to agree with Andrea. Our four kids graduated almost debt-free because we helped them. They also worked hard at jobs and good grades brought partial scholarships too. (One was completely debt free and three had about $4,000 total only.) They all graduated with honors and are launched in the world with good jobs. I believe it is the responsibility of parents to prepare children for this world. When I read the horror stories of student debt, it just makes me cringe!

          Even if parents can’t contribute financially, they need to sit down with kids and explore options that don’t include tons of debt. Too many parents allow those kids to take on those loans at the tender age of 17 or 18 with no thought of the ramifications of this. The “distant future” of debt repayment comes too quickly!

          And I never listen to people like Suzi Orman and her views on your retirement vs. helping your kids because she doesn’t even have children. Like Anonymous said above, there is a big difference between can’t and won’t in what parents will do for their kids.

      • Reply Jim |

        See this is different for me. My dad did state that he would pay for my college, I just couldn’t let him do that to himself, too prideful I guess. So I joined the military, which at that time paid for 75% of my college, and I have $50k for my GI Bill.

        But at the same time, I do plan to pay for college for my children, I just have to make sure that I am comfortable in where I am at financially with retirement.

  • Reply hannah |

    This is such a sad survey.

    I can’t believe parents will not talk to their parents about finances! Don’t they understand that kids NEED to know how to handle money?? You would be shocked at how many college kids have absolutely no idea how a credit score is built, how it works, or why they need to pay attention to their score.

    And why are kids expecting their parents to pay for their college? The average loans coming out of school now are $50,000. Parents don’t have the money to save for that when they have more important things – like their own retirement – to save for.
    If parents don’t save and invest enough to take care of themselves in their old age, then they have to depend on their kids to take care of them. Kids who often don’t have the money or resources to do so, even if they wanted to.

    I never expected my parents to pay for my college education and neither did my husband. In fact my spouse is back in graduate school now, after finishing regular university a few years ago. We are paying ( and taking out loans) for it ourselves.
    Sure it would have been easier if his parents had given him the money way back when for all the education, but I don’t believe that is a parent’s responsibility.
    It seems that I am alone in this, but I think it is unreasonable to expect parents to foot a $50,000 bill per kid for college.

  • Reply Jim |

    I don’t think you are alone Hannah, I personally am in the middle. If I can help my children, I will. It’s just I will have to work on my future first.

So, what do you think ?