BOSTON (CBS) – Rowe Price’s annual Parents, Kids & Money Survey was released in March. And when I receive it I always think we need to bring it to the attention of our listeners. T Rowe Price’s take away from this year’s survey; “Parents are likely to pass down good and bad financial habits to their kids”.
I think we all know that!
The survey found that positive money behaviors and expectations among kids are often associated with the parent’s decision to let their kids decide how to manage their money on their own; when to save and when to spend.
But I do think kids need some guidance and some modeling. If the parents budget their resources, save some, spend on the necessities and spend some on pleasure, the kids will get the big picture here.
The survey found 48% of kids spend their money as soon as they get it. But over half are saving their money. So how do you let your kid manage their money? Teach or show by example how to budget your money.
The kiddo gets $20 for her birthday. Expectations should be some gets saved and the rest can either be spent or saved for something big. You can use piggy banks or mason jars. I used mason jars because my kids could see the money accumulating. Use a savings account for the long-term stuff; the new bike or college savings. With a bank account the money is not within immediate reach which is a plus.
Kids should learn to save for something they really want. This teaches so much on so many levels. How much stuff really costs. Learning to postpone gratification. To wait for something makes it so much sweeter when you get it. And there is the satisfaction that they bought it themselves and may take better care of it.
A word of caution, long term to a kid may only be a few months. Saving for retirement when they are 9 makes no sense to me.
For help teaching your kids start with T. Rowe Price’s MoneyConfidentKids, a website for parents and educators with money games, tips, and information.
They also have a new game, STAR BANKS ADVENTURE, which I needed help with from some 10-year-olds.
You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m., 3:55 p.m., and 7:55 p.m.
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