Most parents are poor role models when it comes to money
Eighty six per cent of parents feel they – more so than educators or others – should have primary responsibility for teaching their kids the basics of personal finance, reports T. Rowe Price.
Yet, parents on average only grade themselves a B- when it comes to serving as role models. What's worse, when it comes to teaching kids the difference between what they need and what they want, more than one-third give themselves a C or lower.
Well, at least they’re honest.
Just 28 per cent of parents say they feel well equipped to discuss basic financial principles such as setting goals, the importance of saving, smart spending, and diversification. And, in 61 percent of families, one spouse – usually mom – is more likely to discuss money with the children.
Parents actually find it easier to discuss puberty, drugs and alcohol with their kids than family finances, the report suggests.
To break down barriers and avoid the eye rolling that tends to accompany these types of discussions, consider:
- Taking advantage of everyday teachable moments – such as going grocery shopping, opening the household bills or planning a family vacation – to reinforce financial lessons and make them more memorable.
- Helping your kids set specific savings goals – both short- and long-term – to provide real-life incentives and make the general advice to “save” more concrete.
- Emphasizing prioritization and tying spending decisions back to the goals when your kids want something else. This can be a better approach than simply saying “no” and helps put the decisions in a context they'll understand while making it easier to discuss the trade-offs.
Were you able to talk about money with your parents? Has anything changed or is it still a bit of a taboo topic in your household? Does one parent usually take the lead?
By Gordon Powers, MSN Money
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