BLOOMINGTON, Ill.– A new survey of parents has found that while 61% of Americans consider parents a key influence in shaping the way they manage their finances, parents of kids under age 21 lack confidence in a number of personal finance topics, with 46% giving their level of financial literacy a grade of C or lower.
The survey, conducted by COUNTRY Financial, further found not all parents say they feel confident when it comes to managing a 401(k) (53%), planning for retirement (61%) or taking out and paying off student loans (55%). The skill parents felt least confident in was investing in the stock market (33%).
In spite of parents' lack of confidence around certain financial topics, most Americans selected parents (32%) over partner/spouse (16%), Internet sites and blogs (12%), a financial advisor (12%), or school classes (8%) as the resource they turn to the most to learn about managing finances, the survey found.
"Parents have the benefit of having real-life experience that has helped them to sharpen their personal finance skills, but most are not going to be experts in every topic," said Tim Harris, EVP at COUNTRY Financial. "Whether you're a parent or not, it's important to educate yourself in all of the ways finance affects your life, from the day-to-day management of budgets and loans, to planning for the future. Consider consulting with a financial expert who can build your confidence and help to fill in those gaps."
Americans Lack Financial Literacy & Education
In its analysis, COUNTRY Financial said Americans' reliance on their parents for matters of managing personal finances might be a reflection on the lack of financial education available to them in school—a deficit that could also be impacting parents' level of confidence regarding certain financial topics.
In fact, 52% of parents and 52% of Americans overall reported not having received any financial education in K-12 or college, with only 15% of Americans overall reporting feeling "very prepared" to manage their personal finances once they left college and entered adulthood, the company said.
“An astonishing 86% of Americans believe that financial education classes should be mandatory for K-12 schools nationwide,” the survey found.
Vital Topics Not Discussed at Home
The survey also found parents' lack of confidence in certain personal finance skills might impact the conversations they have (or are not having) with their kids. When asked what personal finance topics they had broached with their kids, only 13% of parents said they had talked to their kids about planning for retirement, while 9% had talked to them about managing student loans.
Saving (78%) and budgeting (52%) were far more popular topics of discussion, as the majority of parents (93%) had also reported feeling confident managing a bank or savings account.