Social Media Sparks Teens’ Interest in Finances, Investing

Fifty-seven percent of teenagers in a new survey from Wells Fargo & Co. say they learned how to handle finances from their parents, but 47% also took their financial lessons from school, 35% from social media and 34% from websites and online articles.

Only 12% of parents in the same survey acknowledge that their youngsters use social media for financial education.

“There is a bit of a disconnection between parents’ and kids’ perceptions around financial education,” Kathleen Malone, a financial advisor with Wells Fargo Advisors in Charlotte, North Carolina, said in a statement. 

“While 61% of parents polled say they’re talking to their kids about finances, only 43% of teens report they have had these conversations. It’s very important for families to discuss money — and for our next generation to understand how to handle their finances.”

The survey, released Thursday, was conducted online by Versta Research from April 20 to May 3 among 318 teenagers between 13 and 17 and 304 parents of teens in the same age range.

Investment Knowledge 

Nearly all teenagers and parents in the survey agreed that teens who learn about investing will be better off financially later in life. However, 49% of the young people and 32% of parents gave themselves a D or F grade in investment knowledge. 

Fifty-three percent of teen girls rated themselves low in investment knowledge, compared with 42% of boys.

“The good news here is that three out of four teens say they are ready to learn about investing, and nearly nine in ten parents believe their teenaged children are ready for it, too,” Malone said. 

Seven in 10 parents and teenagers agreed that teens handle money well, and more than 80% of both groups believed that parents are good financial role models for their children.

Social Media Effects

Forty-five percent of teenagers in the survey said they became more interested in investing this year because of the GameStop “short squeeze” frenzy in January, which was partly driven by a concerted effort on social media, according to Wells Fargo. More teenage boys than teenage girls reported increased investing interest because of GameStop.

When it comes to cryptocurrency, half of parents said their teen knows more about Bitcoin than they do, and 45% of teens agreed. 

Teenage boys were much likelier than teenage girls to say they know more than their parents about Bitcoin.

“Social media has a profound influence on our younger generations,” Mariana Martinez, family dynamics consultant with Wells Fargo’s Wealth and Investment Management group, said in the statement. “Those generations grew up with social media and often trust many of the platforms more than their parents do. 

“It is vital to establish solid and open communication, create a shared purpose, and educate our children so that they are prepared for financial independence.”

The Money Talk

Sixty-one percent of surveyed parents said they have had conversations with their teenagers about handling finances, but only 32% said they have talked much about investing. Nine in 10 parents said they wish their parents had taught them more about investments when they were growing up. 

Nearly all parents and teenagers thought it important that high schools teach students about the basics of handling finances, including investing.

Beyond talking to their teen about investing, 29% of parents said they have promoted one or more of the following educational activities to help their teen learn more about investing:

• Opened a custodial account and invested on their teen’s behalf: 17%.
• Encouraged their teen to play a simulated stock market game as a learning tool: 13%.
• Gave stocks to their teen so they can follow and learn about the market: 7%.

Despite their parents’ best intentions, some teens may not be paying attention to the efforts. Only 1 in 5 teens said their parents have engaged with them on any of these activities.