Age groups that would naturally have more experience with financial independence scored better. Participants aged 25 to 35 scored an average of 74 percent while those ages 51 and older scored 77 percent. Parents want their children to have a good handle on finances before venturing out on their own, but most aren’t sharing the necessary wisdom to make that happen.

T. Rowe Price’s 2017 Parents, Kids and Money survey found 69 percent of parents have some reluctance discussing financial matters with kids. About 35 percent of parents rated the “money talks” either very or extremely uncomfortable – ranking it alongside talks about death and drugs.

Partly, parents may feel too self-conscious about their own financial situation to be comfortable sharing with their children. The T. Rowe Price survey found parents who have declared bankruptcy are 24 percent more reluctant to discuss money with their kids. Parents carrying more than $5,000 in credit card debt are 14 percent more likely to feel uneasy having those financial conversations. 

Tips to teaching children financial literacy:

• Set an example. Children who consistently see their parents pay the bills on time and keep up a budget are more likely to adopt those practices in their own lives. Don’t shy away from sharing financial mistakes either. That knowledge can equip kids to avoid the same mistakes with their money.
• Make savings a tangible concept. Encourage younger kids to collect spare change in a clear jar or container so they can see their savings grow. Each time the kids want a small treat, parents can offer to put the money they would have used to buy the treat into the “savings jar,” instead. Once the jar is full, children can count the money and use the funds to purchase an extra-special treat. They will soon associate a sense of excitement with savings – and understand that delaying gratification can lead to a greater payoff down the road. The same concept can be applied to teens and savings accounts. They can be encouraged to delay gratification to save for something larger.
• Have kids learn with their own money. Younger children who are paid a small allowance for chores will learn the concept of working for money. Kids can then begin to spend their own money and appreciate what these items actually cost. Teenagers should be encouraged to get a job, even if it is a part-time gig on weekends or vacations.
• Get kids familiar with banking. Let kids in on the process of visiting your financial institution – maybe even let them press the buttons on the ATM or help to fill out a deposit slip. They’ll feel included in adult chores and won’t feel intimidated by banking later in their lives. Pre-teens can open their own checking accounts and become familiar with handling checks and debit cards.
• Get help. There are plenty of resources out there for parents feeling mystified about their children’s financial education. Organizations like the JumpStart Coalition publish libraries of financial education resources on their websites. Many credit unions also offer programs geared toward fostering financial literacy in kids and teens. For more, visit the National Credit Union’s Administration’s Financial Literacy Resources website.