Teaching kids right from wrong isn’t the only lesson parents should impart. A new survey suggests that teaching children about money can not only increase their financial confidence, but it can also set the family up for generational wealth.
Personal finance software maker Quicken surveyed more than 2,000 adults to gauge how an early exposure to financial education — or the lack thereof — affected their lives. The findings suggest that those who learned about money early on had a leg up.
About 65% of survey respondents said they had received early money lessons from their parents. Of that group, 41% said they had a high level of confidence in their finances. On the flip side, only 13% of respondents who did not receive money lessons at an early age reported having a high level of confidence in their finances.
But confidence isn’t the only area where an early financial education may pay off — early lessons in money management could also impact your earning potential. Among respondents, 45% of those who learned about money when they were young had a personal annual income of $75,000 or higher, compared to only 14% of those who didn’t learn about money at a young age.
Those who received money lessons early on were also 20% more likely to prioritize teaching their own kids about money at an early age, which can instill healthy personal finance habits and practices in generation after generation. Likewise, those who were not taught about money as children were twice as likely to wait until their kids were over 18 to discuss finances with them.
When it comes to the most effective money instructor in the household, 38% of respondents said they learned the most about finances from their mother, while 37% said they learned the most from their father. However, money lessons from mom appear to be better received, as 29% said their mom made a positive impact on their future financial health, compared to only 18% who said their dad made a positive impact.
Investing was the area of money management where the largest percentage of respondents (31%) said they wished they had learned more as a child. And yet, only 11% of respondents said they are currently teaching their own children how to invest.
Today’s parents seem to be focusing on teaching different money topics than their own parents did. The survey findings show parents today are 60% more likely to teach their kids about charitable giving than their own parents did. They’re also nearly 50% more likely to teach their children about using credit cards, and 85% more likely to teach them about investing.
If you want to ensure that your children are equipped to handle their money well when they grow up, you can’t leave their financial education to chance. Find ways to introduce money management at an early age. Also, consider opening a savings account for your child so she or he can get used to the idea of putting money away for a rainy day and earning interest in the process.