How to Talk to Your Kids About Money

NEW YORK (MainStreet) — Ask any parent of a teenager or two how their kids handle money, and you just may get a long-winded diatribe laced with terms such as “irresponsible” and “frustrating.”

What you won’t hear from mom and dad is how infrequently they actually talk to their kids about money and finances – an oversight that may set the stage for poor money management skills that can haunt young Americans the rest of their lives.

The fact is, parents don’t talk to their kids about money on a regular basis, or in some cases, at all.

That’s the conclusion of a study from the American Institute of CPAs, conducted by Harris Interactive that shows three out of every 10 parents “never talk to their kids about money.”

The study notes that discussions between parent and children about personal finance is low on the family communications totem pole. Here is how AICPA ranks parental/child discussions:

• 95% of parent are more likely to talk to their kids about good manners than they are about money.
• 87% are more likely to have discussed good eating habits.
• 84% are more likely to discuss the dangers of drugs and alcohol.
• 82% are more likely to discuss the risks of smoking.

Nobody is saying frank discussions about drugs or good manners aren’t important – they are. But when talks about money are a low priority for parents, that means America’s kids aren’t getting the education they need to make smart financial decisions, the group says.

“Based on our findings, parents seem more concerned about the politeness of their children than their financial fitness,” explains Ernie Almonte, CPA, vice chairman of the institute’s National CPA Financial Literacy Commission. “Dollars and cents should get the same attention as ‘please’ and ‘thank you’ at home. Financial education builds critical skills that help put life goals within reach and strengthen the economy. Parents must make financial lessons a priority in both conversation and action as early as possible.”