Having the right ideas about personal finance can be important, but there may be some young people who are not getting the tools needed to get the job done from their parents.
Nearly 70 percent of parents noted that they were very occupied with creating a solid financial example for their children, according to a report from T. Rowe Price. However, nearly three-quarters of those polled are uncomfortable talking to their kids about finances due to them not wanting their children to get worried about these issues.
“Parents can use everyday situations to spark conversations about money, whether it’s using coupons at the grocery store or visiting the ATM, and discussing college is no exception,” said Stuart Ritter, senior financial planner at T. Rowe Price. “Eight out of 10 kids surveyed feel it is important for their parents to talk to them about saving for college. By having conversations about college early and often with your kids, they will learn about the cost of college and why it is important for the family to save for college – especially since 77 percent of parents expect their kids to pay for some of their own college education.”
Another 28 percent of those parents surveyed explained that they lack financial skills, and are worried about teaching their children about money for that reason, the report showed. Another 22 percent noted that they still hold some type of credit card debt.
Young people look to friends for financial ideas
While some parents may be hesitant to teach about finances, young people could be looking to their friends to help influence their financial strategies. According to a report completed jointly between the American Institute of CPAs and the Ad Council, nearly 78 percent of those polled examined their friends’ decisions to help make their own personal finance choices.
“As the old saying goes: Be careful about the company you keep,” said Ernie Almonte, chair of the AICPA’s National Financial Literacy Commission. “Many young adults are building financial foundations with the wrong blueprints. They need to make sure they’re modeling the best behavior for their long-term financial stability.”
When it comes to having a financial situation that is stable, approximately seven in 10 noted that paying off all of their bills during the month was the best way to achieve this, the report added.