A new survey by Quicken, a personal finance software company, found that there’s a clear connection between early education and financial success.
People who learned about money as a kid were twice as likely to have a personal income of $75,000 or higher, but a third of the adults surveyed said that no one taught them about money when they were children, and among that group, only 13% report a high level of confidence in their finances as adults. In contrast, among those who did learn about money early on in life, 41% said that they feel highly confident in their finances.
The survey suggests that your own upbringing effects what you teach your kids. People who weren’t taught about finances early were twice as likely to delay talking to their own kids about money until they are 18 or older. But, the survey found that those who are not at all confident in their current financial situation are three times more likely to start teaching their kids about money when they are very young—zero to two years old.
The survey asked people what they wished their parents taught them as kids, and the #1 thing was investing, but only 11% said they were teaching their own kids about investing.
So which parent teaches the most lessons—mom or dad? The study found that it’s about equal but mom wins by a hair (38% vs 37%), and more people say that their mom had a positive impact on their future financial health (29% vs 18%).
88% of the parents who completed the survey said that they had already started financial lessons with their little ones. They also are teaching children to be more charitable by giving 60% more than their own parents did, they’re using credit cards to teach their kids about money almost 50% more, and they’re teaching kids about investing 85% more.
Here are some tips from Quicken for talking to your kids about finances:
- Set an example. Kids notice their parents’ financial habits, and they tend to copy them.
- Use tools. For example, you could use a see-through jar so the kids can see their funds grow and shrink with each deposit and withdrawal.
- Set clear boundaries by making your kids cover some of their own expenses like purchasing new toys or going to the movies with friends.
- Talk early. A study by the University of Cambridge found that money habits are formed by the time children are seven years old.
- Talk often. Continue to have an open conversation about money.