Teens are experts at spending money, but far fewer apparently know how to manage it. Blame it on their parents. According to a survey by Charles Schwab & Co., most parents admit they could do a better job teaching their kids about money management. Only a third have taught their teens how to balance a checkbook and even fewer–29 percent–have explained credit card interest and fees.
Most parents rate experience and their own example as the best ways for teens to learn about money. But just 20 percent of those surveyed significantly involve teens in the family’s budgeting and spending decisions and one in four don’t involve teens in these decisions at all. Parents are more likely to teach their kids to do laundry (70 percent) than pay bills (43 percent), the survey found.
“Parents prepare their kids for so many of lifes milestones–hitting puberty, getting a drivers license, choosing a college,” said Carrie Schwab-Pomerantz, Schwab’s chief strategist of consumer education and president of Charles Schwab Foundation. “But they may be missing opportunities to prepare them for important financial milestones.”
Sixty percent of parents identify their teens as “quick spenders.” Nearly all (93 percent) American parents with teens age 13-18 worry their teens might overspend or live beyond their means (67 percent), get in over their head with credit card debt (65 percent), save too little for emergencies (60 percent) and fail to stick to a budget (57 percent).
But fewer than half have taught their kids about budgeting and less than a third have taught them credit card basics. It’s no wonder a full third of the parents surveyed (33 percent) expect they’ll be bailing their kids out of financial mistakes for years to come. And while that may be generous, it may also be impractical: the survey found more than one in four parents is not even saving for retirement.