Parents can do more to teach kids finance: survey

Tue Jul 21, 2009 1:38pm EDT
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NEW YORK (Reuters Life!) - Times may be hard, but parents are not doing enough to teach their kids the value of money these days, according to a new survey.

Sixty percent of 504 parents questioned in the poll feel they are not dispensing enough hard-earned wisdom to their children about the importance of managing money.

And more than half said they could be doing more to help their children reach financial competence by the time they turn 18.

The lack of teaching is in part down to parents themselves not having a grasp of the basics of saving and investing cash. On average, the parents graded themselves a mediocre "B-" in basic finance.

"The survey confirms that parents want to impart sound financial values to their children, but they do not always have the tools or feel knowledgeable enough to teach them," Stuart Ritter, a financial planner with the global investment management organization T. Rowe Price. which commissioned the survey, said in a statement.

Ritter said that giving an allowance, shopping together and getting birthday money should be used as opportunities to impart simple financial lessons. Grocery-aisle finance is a good way of teaching a kid to spend wisely, but most parents do not use these occasions, the survey showed.

It has not always been through lack of effort though.

Nearly half of parents said the financial crisis had been a catalyst to teach their children more about money but more than half said that their children quickly forget the lessons they were told.

Forty-one percent of parents who give their children an allowance said that they always or sometimes come back for more money after it runs out.

But help is it hand, as nearly all of the 504 parents who took part in the online poll conducted by MarketTools, Inc. said that the old-fashioned piggy bank set a good example about the importance of saving for kids growing up in a cash-short world.

(Reporting by Edward McAllister; Editing by Patricia Reaney)

<p>A U.S. dollar bill is displayed in Toronto in this posed photo, March 26, 2008. REUTERS/Mark Blinch</p>