Why you should teach your kids about money

http://www.savingforcollege.com/articles/why-you-should-teach-your-kids-about-money-667

Have you started talking to your kids about money? According to T. Rowe Price’s sixth annual Parents, Kids and Money Survey, over two-thirds of parents want to set a good financial example for their kids, yet some are avoiding talking to their kids about money (42%) and others sometimes lie about money (28%). In fact, a whopping 74 percent of parents surveyed have some reluctance to discuss financial topics with their children. But many parents talk about saving for their children’s college education more often than they talk about their own retirement. So why are parents leaving kids in the dark when it comes to financial matters?

Kids who are involved in family finances tend to be more confident about money and more motivated to save. For example, children who have talked about saving for college with their parents are more likely to put away some of their own money. What’s more, studies have shown that having even a very small college savings fund will significantly increase the likelihood that a child will attend college. Yet despite all of this, only 15 percent of parents surveyed by T. Rowe Price have discussed a specific plan to save for college with their kids. Many of these parents feel they are protecting their children from having to worry about financial matters.

And it seems girls tend to need more “protection” than boys. The survey also found that there is a significant gender gap between boys and girls when it comes to teaching kids about finance. 58 percent of boys say their parents are encouraging them to set financial goals, compared to only 50 percent of girls. And when it comes to their college education, 53 percent of boys say that their parents are saving but only 42 percent of girls say their parents are saving. So why are parents focusing so much more on boys when it comes to finances? Are boys more likely to attend college than girls? No, in fact the opposite is true - Pew Research Center analysis of U.S. Census Bureau data showed that in 2012, 71 percent of women enrolled in college immediately after high school, compared to only 61 percent of men.

The reality is that boys and girls alike will benefit from learning about money at an early age. While most parents (87%) surveyed think personal finance could be taught in schools, the most effective way to teach kids financial responsibility is to start at home. According to Parents, Kids and Money, most children have played online, video or board games that have helped them understand basic financial concepts. A great resource for families is T. Rowe Price’s Money Confident Kids website, which features tips and tools, downloadable apps and games kids can play that teach smart saving habits.