Teaching Kids about Money Management, But Most Aren’t Having Regular Discussions
Parents Believe Their Children Should Learn Money Management at an Earlier Age Than They Were Taught as Kids
Nine in ten (89%) parents of children aged 5 to 17, with household income between $15K and $75K, believe that they are a very important resource when it comes to teaching children about basic money management, but most are not having regularly, weekly discussions with their children on the subject, according to a new Ipsos poll conducted on behalf of BMO Harris Bank.
This is particularly troubling considering nine in ten (90%) agree (51% strongly/39% somewhat) that they are concerned about the younger generation’s ability to manage money, and two in three (67%) agree (30% strongly/37% somewhat) that they’re concerned with their child’s ability to manage money.
Despite most (89%) believing that parents are a very important resource for children when it comes to the topic of money management – placing them higher than schools (57%), banks (43%) and various other resources – just one in three (36%) say they speak with their kids on a weekly basis about basic money management skills.
Moreover, two in ten (16%) say they only talk about this subject once or twice a year, while one in ten (12%) never broach the subject with their kids at all. However, most (83%) agree (33% strongly/50% somewhat) that they would like to talk with their child/children more about basic money management.
A national survey, the study also explored in greater detail the states of Illinois, Wisconsin, Indiana, Arizona, Florida, Minnesota, Kansas and Missouri. The data revealed that those in Wisconsin were much more likely (45%) than the national average (36%) to talk about basic money management on a weekly basis, while those in Illinois (28%) were least likely to do so. Those living in Arizona (17%) were most likely to have never had a discussion about basic money management with their children, compared to the average (12%).
Focusing specifically on financial topics, the most frequently-discussed areas include saving money and shopping choices, with 39% of parents saying they talk about these things on a weekly basis, followed closely by allowance (36%) and budgeting (27%). But fewer are talking about things like saving for college (12%), summer jobs (10%), credit card debt (8%), investing (7%) or understanding bank statements (6%).
With such a large gap between perceived importance and action, American parents say there are a number of challenges facing parents today in terms of teaching their children about basic money management. Four in ten (37%) say it’s difficult to find information for children, while a similar proportion (34%) says it’s difficult to talk about it with children – with those in Kansas (47%) being most likely to say so, in Arizona being least likely (23%).
One quarter (23%) say that it’s difficult to find the time to have these discussions with their children, with those in Indiana being twice as likely (30%) as those in Minnesota (15%) to cite this as a barrier.
Moreover, one in three (34%) agree that they’re not sure how to teach their child/children about basic money management, and a similar proportion (36%) agrees that it is difficult to find the time to teach their child/children about basic money management.
Most parents believe that a discussion about basic money management should start at a relatively young age – at an age younger than they were when their parents taught them. The average age American parents believe children should start participating in these discussions is 10 years old, compared to an average age of 12 years old when they first had the discussion with their parents.
In fact, one in three (35%) believe that the discussion should start no later than the age 8, with 5% even suggesting it can start when the child is less than 5 years old. Among those who have discussed money management with their children, the average parent began discussing these issues with their children at the age of 9, with four in ten (37%) saying they started at age 8 or younger. Contrast this with parents’ experience when they were young, as only 8% say they began having these discussions by the age of 8.
These are some of the findings of an Ipsos poll conducted September 7th to 17th, 2011. The survey is based on a national sample of 2,714 Americans with children between the ages of 5 and 17 living at home and with household income between $15,000 and $75,000.
Respondents were from Ipsos' US online panel and interviewed online. The results are based on a sample where quota sampling and weighting are employed to balance demographics and ensure that the sample's composition reflects that of the intended population according to Census data.
Quota samples with weighting from the Ipsos online panel provide results that are intended to approximate a probability sample. Results from the survey are reported at the national and state levels. At the national level, a survey with an unweighted probability sample of this size and a 100% response rate would have an estimated margin of error of +/- 3 percentage points 19 times out of 20 of what the results would have been had the entire adult population of Americans with children between the ages of 5 and 17 living at home been polled.
Results at the state level are considered accurate to within +/- 6 – 7 percentage points 19 times out of 20, depending on the state. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.
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New York, NY – 3 October 2011
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