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Parents, Get Your Financial Life in Order. Then Talk to Your Kids.
By Carole Fleck, April 1, 2013 10:24 AM
A new survey that questions whether parents talk to their school-age kids about money reveals some startling results - namely, that nearly one in five parents expect to lean on their children for financial help in their retirement years.
The Parents, Kids & Money Survey by investment firm T. Rowe Price was designed in part to find out whether parents talk to their elementary- and high school-age kids about saving and spending, and just how in-depth they go in guiding their children toward a secure future. But in conducting the survey, researchers also found that nearly half of the 1,014 parents polled didn't have their own financial affairs in order.
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Stuart Ritter, a senior financial planner at T. Rowe Price, says that's a big problem.
"Kids look to their parents as financial role models, and for that reason parents need to not only have frequent discussions with their kids about money, but also lead by example," Ritter says.
Among the survey's findings:
- 50 percent of parents say they don't save regularly for retirement
- 18 percent of parents believe they'll need financial support in retirement from their kids
- 42 percent of parents say they have no emergency fund for unexpected expenses
- 54 percent of parents have no life insurance
- 74 percent of parents don't have an up-to-date will
Despite their own financial shortcomings, most of the parents polled (73 percent) say they do have regular conversations with their kids about money. But when it came to the question of college affordability, the savings behavior of nearly half the parents polled was at odds with their goals.
For example, two-thirds of parents and kids say saving for college is important for a bright future. But more parents say they save regularly for vacation (46 percent) than for their kids' college education, (41 percent), the poll finds.
One in three parents seemed to be good role models on the issue of credit card debt, the poll found. About one-third of parents say they pay off their balance each month; 44 percent report they carry a balance.
Photo credit: 401k 2013 via flickr.com
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