A recent survey of 1,000 parents of children ages 14 to 18, found only 8% think their teenagers are “extremely prepared” to manage their finances in adulthood. That marks a 10-point drop from last year, when 18% reported the same.
Danielle Sherman, CEO and founder of Wired Research, which conducted the survey on behalf of Jazmarc Services, said while she hoped confidence would increase, the decline made sense in the current U.S. economic climate.
“If they’re feeling shaky about maybe their own preparedness, or their own confidence in being able to navigate this climate, it naturally follows that they feel less certain about how well-prepared their own teens might be,” Sherman said.
The survey found that while 82% of parents have talked with their teens about savings, about 7 in 10 said they aren’t confident they’ve taught their kids what else they need to know about money.
About half of survey respondents admitted they hadn’t talked with their teens about sticking to a budget, managing bank accounts, staying out of debt, or building good credit.
A majority also said they have not had meaningful conversations with their teens about selecting insurance, filing tax returns, investing, financial planning, or goal setting.
Still, 98% of parents surveyed said they believe it is their responsibility to teach their kids how to manage finances and 97% think it’s one of the greatest gifts they can give their children.
Sherman recommends parents explain how their budgeting or lack thereof led them to overdraft their bank accounts or go into debt, and how those decisions will affect them next month.
“That needs to be normalized,” Sherman said. “These are not going to be easy conversations to have, but it could very well be the thing that helps your teen not fall into the same financial cycle.”
To learn about HOW to talk to your teen about money, read the full article here.
The important thing to remember is this isn’t a one-time-only conversation. Financially literacy takes time to master. The sooner you start with important discussions and lessons about money, the better prepared your child will be, and you will have set them on a path to financial success!