Kids’ money habits are formed before they get to high school, and their parents are often their most influential teachers.
A survey from T. Rowe Price – the Parents, Kids & Money Survey – analyzes parent attitudes and behaviors that were associated with kids’ financial habits. The survey includes a sample size of 1,014 parents and 1,014 kids ages 8 to 14.
According to the survey, positive money behaviors and expectations among kids are often associated with parents’ decision to let their kids decide how to save and spend their money on their own, as well as modeling good financial habits.
“Kids who have the freedom to manage their own money seem to have better money behaviors and are more truthful with their parents about how their money was spent,” Roger Young, a senior financial planner at T. Rowe Price and father of three, said in a statement. “I know firsthand the temptation of helicopter parenting, but there is evidence of a downside to this approach when it comes to money.”
According to the survey, 44% of the parents surveyed let kids decide how to save and spend their money on their own. Parents who let their children have control of their own money are less likely to have kids who spend their money as soon as they get it or who expect their parents to buy them what they want.
According to the survey, more than three-quarters of the kids who manage their own money say that they have money conversations with their parents.
“Giving them real life money experiences brings finances out of the conceptual and puts it into practice,” Young said in a statement.
Conversely, troubling financial habits among kids were more frequently seen when parents have a troubling history with money.