Worried about how your children will handle money? Lots of us are. A new study suggests there is a clear correlation between early education in money and future financial success. Thankfully help is available.
Financially Educated Children = Financially Successful Adults
People who learned about money as children were three times as likely to have a personal annual income of $75,000 or higher than those who did not, according to a survey by Quicken, the money-management software maker.
But there’s a problem: one-third of adults surveyed said no one taught them about money when they were children. Among that group, only 13% reported a high level of financial confidence.
Teach Your Children
One’s upbringing plays a critical role in how and when we teach our children about money. Those who learned about money as children were 20% more likely to prioritize teaching their own offspring about money. Those who said no one taught them about money as a child or young adult were twice as likely to delay having financial discussions with their own children until age 18 or older.
Teaching Tools Can Help
The top tools—allowance, savings accounts, piggy banks—may not have changed much, but the lessons have evolved, and other financial instruments have entered our lives. Today, parents are teaching their children about charitable giving 60% more than their own parents did. Similarly, using credit cards and understanding interest rates—no doubt thanks to online shopping—has risen by almost 50%. Teaching investing basics occurs in 85% of the households that talk to their children about money.
‘Money Talk’ Tips
To help your family discuss money, try these three ideas:
- Set an Example. If you’re an example of financial responsibility, your children will likely do the same.
- Use Tools. The right tools can make a big difference. The survey showed that 62% of those who do not use any personal finance tools also reported a lack of confidence regarding their own personal finances.
- Talk Early and Often. An early start and frequent conversations about money can be a key to setting your children on the path to a healthy financial future.
Need help with setting up a savings and/or investment plan for your children or grandchildren? Contact our office. We’ll be pleased to help you get started.