When asked who should teach their children about finances, 83 percent of parents responded that they expected themselves to teach their children. 51 percent of parents expect schools to teach their children about financial matters and 41 percent indicated they would like financial advisors to inform their children.
With the vast majority of parents listing themselves as the primary teacher, there are three topics that they find particularly important to impart. They believe teaching children to 1. Live within their means; 2. Begin saving early and regularly; and 3. Take advantage of their employer’s matching 401(k) contribution will give them a good start in their financial lives.
Parents said they would have liked to learn more about the following topics when they were younger: 1. Saving for retirement; 2. 401(k) tips; 3. Advice on debt, credit cards, and budgeting; and 4. General knowledge about the stock market and how investing works.
These statistics came from a Capital Group survey published in July 2018. They suggested it is problematic that parents expect schools to teach their children financial topics as most schools do not offer financial courses or lessons, though this is something many Americans wish was covered in school.
69 percent of parents rated themselves as only “somewhat” successful in teaching their children about the importance of saving, 401(k)s, and investing. For many children, the success of their financial lives depends on the quality of advice they receive from their parents. The rest they may gather through Google searches, if they are fortunate enough to receive a 401(k) training or a financial advisor session from their employer, or through daily life experience a la “trial and error.” However, any of these sources may not be enough to truly build and maintain an effective financial planning or wealth management strategy.
Ranked third of who parents expected their children to receive financial advice from were financial advisors. A fiduciary financial advisor is legally required to act in your best interest, but not all financial advisors are fiduciaries. As the term “fiduciary” becomes more widely known, millennials may be more aware or inclined to utilize the financial services of a fiduciary. They may also reach out to their parents’ fiduciary advisor, provided they have one.
Wherever children get their financial advice from, it is important that they are taught early and given advice that benefits their long-term financial health. If you have any questions about how to get this conversation started or if you have gaps in your own financial education, please contact us at email@example.com or call us at 515-557-1860 to inquire more about our financial planning and investment management services. We are a fiduciary based registered investment advisor in Des Moines, IA serving clients across the U.S.