Starting the money talk with kids

money clip art


T. Rowe Price has released some new surprising findings from their 2014 Parents, Kids and Money Survey of children ages 8 to 14 and their parents. (1,000 parents and 924 kids were surveyed.)

Here are some of the highlights:

Boys vs. Girls 

  • 58% of boys say their parents talk to them about setting financial goals compared to 50% of girls
  • 53% of boys say their parents are saving for their education versus 42% of girls
  • Boys think they are smarter about money – 45% feel very or extremely smart about money compared to 38% of girls
  • Twice as many boys have credit cards – 12% of boys and just 6% of girls have credit cards

Conversations make a difference

  • 81% of kids whose parents frequently talk to them about stocks and bonds say they are saving for college on their own, as opposed to just 25% of kids whose parents do not frequently discuss investment vehicles
  • 58% of kids whose parents frequently talk to them about saving for college save for their own education compared to 23% of kids whose parents don’t frequently discuss college savings.
  • 66% of kids whose parents frequently talk about family finances feel smart about money compared to 37% of kids whose parents don’t frequently discuss family finances.
  • 60% of kids whose parents frequently talk about setting financial goals call themselves “savers” compared to 46% of kids whose parents don’t frequently discuss financial goals.

Below are five tips for starting the money conversation with kids from Judith T. Ward, certified financial planner at T. Rowe Price

Tip 1:  Start with the basics.

Begin the financial conversation with your kids by starting with the basic terms like savings goal, trade-offs, inflation and diversification. By starting with the basic vocabulary to build a foundation, you can integrate these terms in conversations and start to build upon them.

Tip 2:  Look for teachable moments. 

These can happen when you are standing in a store, opening bills that came in the mail or clicking on a website to plan a family vacation. For example, when your grade-school daughter asks for her own credit card so she, too, can get things at the store for “free,” show her the credit card bill that comes once a month and explain how you pay it out of your earnings.

Tip 3: Cover both mechanics and values. 

Kids will catch on to how cash works quickly, and with the right explanation even the world of credit cards and ATM machines will become familiar. However, parents also will want to teach their children values—how to weigh one decision against another when it comes to spending. Some families emphasize saving for the future, investing in education, or making travel plans to new places a priority.

Tip 4: Share the family finances. 

We have a strong cultural taboo against having our kids know our exact household income or burdening them with worries about a parent losing a job. However, it’s important for kids to understand the choices parents make and the limitations families face.

Tip 5: Keep it fun.

If your kids roll their eyes when you begin to lecture—one more time—on financial responsibility, your messages probably won’t stick. Instead, find ways to keep the conversations interesting at any child’s age. One great way is through online games. T. Rowe Price collaborated with Walt Disney Imagineering to create The Great Piggy Bank Adventure, an online game that teaches kids how to make good financial choices. For this and other games and ideas go to

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