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
* Follow Gordon on Twitter here.
Posted by: Steven | Apr 12, 2021 9:36:47 AM
Cut the parents some slack. Keep in mind that they are doing much much better than their financial role models in Ottawa who take money from the poorest to provide corp welfare to the richest and then retire from office before they have to deal with the mess they made. See? I didn't mention G20 once !
Posted by: Trixie | Apr 12, 2021 10:58:14 AM
So Steven, you appear NOT to be Conservative. I could have a discussion with you on the priorities of the liberals (taking us into mountains of debt), which we WILL have to pay someday, versus the priorities of the Conservatives, which is getting us out of debt. Oh, and by the way, if you were against the money spent on the G20, I hope you were also against the money spent on the Olympics! But, alas, I do digress. It's NOT up to the gov't to teach us how to or not to spend money. THEY are NOT our parents. (Liberals tend to forget that.) My father did well with the basic finances. My mother was good at teaching me NOT to be like her. She was the one always putting our family in debt with her needless spending. However, the basic roof over your head, clothes on your back and food on the table is first, of course. Everything else, including that IPod, (laugh here), is second.
Posted by: Paul | Apr 12, 2021 3:55:24 PM
Trixie, You ARE a conservative...short term memory -the conservative gov created huge debt in the eighties and it was the best finance minister this country has ever had (Paul Martin -Liberal) who's policies and fiscal restraint dug us out. This is about family finances...keep your narrow--minded partisan politics out of it!!
Posted by: Trixie | Apr 12, 2021 4:16:39 PM
Paul, I was correcting Steven. Actually, Steven started HIS and apparently YOUR broad minded ways of looking at things. Let's just spend, spend, spend and let our kids, and their kids deal with the consequences of higher taxes, etc. if the liberals get in. (Someone has to pay for all the social services that the liberals want. I tell you...from MY point of view, my taxes ARE high enough already.) (Mr. Harper has been cutting back ALOT in gov't...and he SHOULD be. Our gov't can't afford to spend anymore.) Anyway, IF you read my first comment again, which maybe you should, I DID deal with family finances...did you??? Before you get up in arms...read before you speak.
Posted by: Steven | Apr 12, 2021 7:35:28 PM
Actually Trixie I am an equal opportunity antagonist, relax there is blame enough for all. That said, although not all of us might have parents legislating in Ottawa etc, we all have to deal with the repercussions emanating from there. Namely stupid ideas like buying votes with tax cuts even when it is shown to be such an abject policy failure south of the border. After WWII we built the highways, Hydroelectric/Nuclear etc power, provided National Healthcare and virtually free university and grew our economy WHILE paying back WWII debt and providing a good standard of living. Any idea why this can't be replicated now???
Posted by: Chip | Apr 13, 2021 12:19:37 AM
See... ya should confined your remarks to answering the question(s) at the end of these articles. They're bolded for your reading pleasure.
Posted by: rob | Apr 13, 2021 8:03:46 AM
While I don`t agree with Trixie at all...the post world war II era was a different kettle of fish all together. North America was at a massive advantage and came out running at top speed. Every country was in debt post world war II, North American governments were in debt to their citizens via war bonds and the European countries were in debt to North American governments while all of their infrastructure was completely demolished. European countries were focused on rebuilding bridges and roads and paying back the US, while North American countries were filling the global gap in industry, technology and innovation. We would have prospered no matter what government or economic policies were in place...
Posted by: Trixie | Apr 13, 2021 8:32:21 AM
Hi. I'm back. (Some of you won't like this. Joke.) Steven, I believe that things can't be replicated now because now we are in a world economy. Also, everthing that works runs by competition. (May the best man win? Again, joke.) Anyway, now that we are in a world economy we are trying to compete with countries who have different standards and different ethics/morals. What I am saying, in effect then, is that other countries are willing to work for less wages and less benefits and still work very hard simply because they are taught that work is ethically right. I believe that the sooner north americans get a work ethic back, the sooner we will be competitive again and our economy will slowly go back to normal. However, we can't keep attitudes that we are better than the rest, and just keep spending money. It won't work. That's my two cents worth.
Posted by: Steven | Apr 13, 2021 10:53:35 AM
Germany is also part of this 'world economy' and yet their economy and standard of living is rising all the time. They have a more socialist society than the US/UK/Canada and yet better standards of living all round with even a few billionaires to demonstrate there is no cap on wealth. Why do we expect so little of our politicians and why do we allow such a poorly functioning society here? I know lots of people in the UK who look at German jobs/roads/incomes and wish that the UK had lost WWII if it had meant that they would have a German standard of living. I could talk with my parents about money & I can talk with my elected officials about money, but talk is empty without equal power.
Only by giving your child the full budget and obligations to work with will they fully grasp the parameters. Likewise teaching "saving" without a way to counterbalance it with earning becomes somewhat futile esp in the narrow time frames that children live their lives in. There really is no rush though, allow children their youth before they discover the whole financial system is rigged.
Posted by: Northern Ontario | Apr 14, 2021 1:22:35 PM
25-30 years ago, money decisions were simpler but not necessarily easy. One income family was the norm. Pay Cheques were to pay the Mortgage, much lower municpal taxes because we had very few services (no recycling boxes, no composting bins, less snowplow.....), food on the table, clothing and a few basis necessities. We all knew as kids, adults and parents that money was for BASIC LIVING. If anything was left over, you could plan a weekend trip or even a 1-week trip somewhere in your province. Flying to a warm destination, purchasing ATVs, Seadoos, numerous electronic devices or multiple TVs for each room was not part of a discussion unless you were filthy rich.
Our biggest expenditure is certainly healthcare. Technology has allowed us to take numerous tests that helps us detect diseases that we couldn't in the past. For that matter, we can now detect disease at an early stage which helps us conquer the sickness and live longer. This technology and drugs cost a lot of money. If a doctor said he/she can prescribe a drug that is $200 with an effective rate of 99% or a drug that is $75 with an effective rate of 94%, which one would you take if it was paid by your employer or the government? The answer is a given so the money has to come from somewhere.
We need to keep our healthcare and demand that we accept lesser services and adapt accordingly. This is a typical topicthat should be taught in school once you become a teenager to understand what families are dealing with. Kids hearing it from a curriculum will better understand what their parents have been trying to teach them. They are the ones that will be making future decisions.
Posted by: SP | Apr 14, 2021 8:25:15 PM
Re: Northern Ontario. 25-30 years ago was the 1981-1986 period. Interest rates in the Low 20% / high teens (for mortgages) range, most of both gender parents worked. One income family hasn't been the norm for 40+ years (Pre Trudeau days). Money isn't a Taboo in my family but my parents haven't taught me a lot WRT savings. My dad's approach was to use 1/2 of his inheritance to buy 4 investment properties in the early 80's when house prices collapsed and he just sold the last one this year Even he acknowledges that economic times are cyclical and what worked for him won't work for me (free university, good jobs & cheap houses in his case don't apply these days). My Mom's one economic lesson is perhaps the most valuable "Don't get divorced".