Study reveals who influences the financial behavior of children

When it comes to the ability to influence your children’s future financial behavior, there is good news and bad news, according to the results of a recent survey conducted by the National Foundation for Credit Counseling (NFCC).

The good news is the majority of Americans say they learned the most about personal finance from their parents. But, the bad news is, unfortunately, that the majority of Americans say they learned the most about personal finance from their parents.

So how exacty is the fact that 44 percent of Americans learned the most about personal finance from their parents? 

While it’s certainly encouraging to see that parents still play such a key role in the behavior development of children, it can be a bit worrisome when taking into account the admitted poor financial skills of the majority of Americans.

Because parents often find it difficult to adequately teach kids about money, children ultimately learn by example. To make it just a tad more complicated, according to a study by Ameriprise Financial, the way a parent approaches financial matters differs dramatically according to the gender of the parent.

The report found that, while women are more likely to talk about financial matters with their children, fathers are more prone to simply provide financial support. In fact, more fathers than mothers say they would help their child buy a car or pay off credit card debt than say they’d continue contributing to their own retirement savings.

While you may or may not fall into one of these categories, it is still important to be aware of the example you are setting for your children. So in honor of Father’s Day, make a pledge to address this important life skill. After all, raising a financially independent child could be the best gift you ever gave yourself!

The following are a few tips to help your children start off on the right financial foot:

  • Involve them in financial planning. While a young child won’t understand investing at the complex level of an adult, a savings account in his or her name will help them understand the basic benefits of saving money and watching it grow. And if you have a teen, try and explain the more complex terms using analogies your child will can understand.
  • Give your child a chance to be in control. If you give you child an allowance, let him or her be in charge of spending it. This is a great way to teach the relationship between their actions and the positive or negative consequences that follow.
  • Provide extra income opportunities. Help them learn that money is something you earn, not something you are entitled to. This is also a great way to get the child involved in extra family chores.
  • Take your child shopping with you. Explain to them why you make the decisions you make while shopping. By showing them the details you take into consideration, you’ll be teaching them how to be a wise consumer. Plus, doing this will force you to be more aware of the habits that will make you a more responsible shopper.

Ultimately, the wisdom you impart upon your kids now – while you still have influence over them – will help them grow into successful, responsible adults.

Jessica Horton is a former copywriter and community manager at MMI.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

  • The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.

  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.