Survey: 63% of Parents Have Talked Money with Their Kids
When it comes to teaching kids about money, parents are stepping up. Nearly 63% of moms and dads have talked to their children about at least one major financial concept, according to a new survey. The most commonly discussed topics include budgeting and debt, followed by charity and taxes. However, credit scores and insurance were the least-discussed money matters among parents and kids.
Why Financial Literacy Matters
Family conversations around financial literacy are essential, even when children are relatively young. “The age to start is when children begin to show an interest in money and notice how items are purchased,” says certified financial planner Randall S. Lee. The key concepts, according to Lee, are understanding that money is earned through hard work, that spending should not exceed available funds, and that building good savings habits is crucial.
The Role of Allowances
The survey, based on responses from a nationally representative group of 1,500 parents with children under 18, found that over one in three parents give their kids an allowance. Nearly 60% of those parents pay their child less than $20 a week.
“Paying an allowance is the first step towards instilling good money habits,” says Peter Lazaroff, author of Making Money Simple. “It also creates natural opportunities for meaningful money-related conversations.”
Interestingly, the survey revealed that 49% of parents who don’t give an allowance have yet to discuss major financial concepts with their child. Lazaroff suggests implementing a weekly allowance between $0.50 and $1.00 for each year of the child’s age. He also uses the “three-container system,” which serves as his son’s de facto first budget, dividing money into spending, saving, and sharing containers.
Financial Accounts for Kids
More than 47% of parents have yet to open core financial accounts, like checking or savings accounts, for their children. While there are pros and cons to setting up financial accounts for minors, doing so can introduce them to the financial system early on. For example, when one parent’s 16-year-old child received their first paycheck, they opened a Roth IRA, which set them on a savings track for life.
Teaching Kids About Money
Classic board games like Life or Monopoly can introduce kids to important financial concepts like real estate or saving for retirement. Other tools like piggy banks, simple budgeting spreadsheets, and kid-friendly financial apps like Savings Spree, Bankaroo, BusyKid, or Stockpile can also be helpful.
Looking for more ways to teach your kids about money? Check out our full list of 50 fun ways to teach your kids about money.
Description: A parent teaching their child about money using a piggy bank and simple budgeting concepts, emphasizing the importance of early financial education.
