Parents Botching Money Lessons
Many Underestimate Role In Kids' Financial Educations
The "2001 Parents, Youth & Money Survey" shows that the majority of parents feel confident about their understanding of financial matters, and most think that they do a good job of managing money. The survey was issued by the American Savings Education Council and the Employee Benefit Research Institute -- financial industry think tanks -- and Mathew Greenwald & Associates, a market research and consulting firm that specializes in financial services.
However, many of their actions and behaviors contradict this self-assessment. For instance, 55 percent of parents roll over credit card debt each month, and less than half of all parents -- about 45 percent -- say that they make a budget and stick to it most of the time.
The survey was conducted through 19-minute interviews with 1,000 individuals who have primary responsibility for one or more children between the ages of 6 and 17. It was underwritten by the TIAA-CREF Institute, which supports research and education initiatives for lifelong family financial security.
"Our 1999 Youth & Money Survey found that 94 percent of students turn to their parents for financial education and guidance," said Dallas Salisbury, ASEC chairman and CEO.
"The bottom line is that most parents, on a regular basis, likely have a major impact on the financial attitudes and behavior of their kids ? both positive and negative," Salisbury said.
However, the new survey shows that most parents do not think it is their sole responsibility to educate their kids about finances. Only 38 percent feel that it is their exclusive duty, while a whopping 61 percent feel that it is the responsibility of both the parents and the child's school. One percent feel it is strictly the school's responsibility.
In addition, when asked to specifically describe what they have done to teach their kids about financial matters, 56 percent of parents can name only one example; 31 percent cite two examples; and 8 percent say "nothing" or "don't know."
Ironically, 81 percent of parents who feel they do a "fair or poor job" of managing their money still consider themselves effective in giving their kids financial advice.
"Parents must get educated about money management if they want to pass on effective financial lessons and skills to their children," said Don Blandin, president of ASEC. "Too many students are graduating from high school with no understanding of the basic principles of earning, saving, budgeting, debt and investing."
