Manage Money Well: Learn About It

The Money Challenge

Mother and daughter shopping together

Whether we have a lot or a little, money is a big part of our lives. When we have enough of it, it can open up choices for our kids and our families. When we don’t, it can be a huge burden or stress, shutting down options we may otherwise have.

We all develop skills, attitudes, and values about money, and that happens more in our homes than anywhere else. In fact, families have more influence than anything else on young people’s money attitudes, skills, and behaviors.3 One study found that parents’ influence on young adults’ financial knowledge, attitudes, and behaviors was much greater than the combined influence of students’ work experience and financial education in high school.4

But you don’t have to be a financial whiz. Researchers find that parents most influence their kids’ money habits in two ways:

  1. How parents model their financial values and skills; and
  2. How parents give their kids responsibility for money issues.1

Those themes are consistent with relationship strategies of providing support and sharing power. So addressing money in the home doesn’t have to be “one more thing to do.” It can just be something that’s part of our everyday relationships in the family.

The good news is that 69 percent of parents are very or extremely concerned about setting a good financial example for their kids. 6

A Different World

At the same time, it’s important to recognize that many of the money issues our kids face are different from when we were growing up. After all, teens in total spend an estimated $200 billion annually.2 Many of today’s teens . . .

  • Have a full or part-time job during the summer or school year (77 percent).5
  • Have access to a bank account (75 percent).5
  • Have access to a car once they get their drivers license (69 percent).5
  • Have access to an ATM card (53 percent).5
  • Use a credit card, usually one that belongs to a parent (35 percent).5

So we need to talk about what matters to us. We need to develop skills and habits that work for us—and for our kids—in today’s complex financial world.

Research Sources

1. Clarke, M. C., Heaton, M. B., Israelsen, C. L., & Eggertt, D. L. (2005). The acquisition of family financial roles and responsibilities. Family and Consumer Sciences Research Journal, 33(4), 321-340.

2. EPM Communications (2010). Teen spending and influence. New York: Author.

3. Jump$tart Coalition for Personal Financial Literacy (2004). 2004 personal financial survey of high school seniors. Washington, DC: Author.

4. Lusardi, A., Mitchell, O.S., & Curto, V. (2009). Financial literacy among the young: Evidence and implications for consumer policy. Philadelphia, PA: Pension Research Council.

5. Mandell, L. (2009). The financial literacy of young American adults. Washington, DC: Jump$tart Coalition for Personal Financial Literacy.

6. T. Rowe Price (2015, March). 7th annual parents, kids, and money survey.