As someone who has done a great deal of research into what drives financial behavior, I can tell that one of the biggest influences on how we handle money as adults, is how we saw it handled and discussed by our parents and primary caregivers.
In my book The True Cost of Happiness: The Real Story Behind Managing Your Money, financial expert Susan Galvan remarked,
“We simply filter information through the mechanisms we developed as a child. Those deep imprints influence every decision we make, and we use them as a reference point.”
At some point, we all have to take responsibility for our financial behavior. We have to use our childhood messages – good or bad- to move beyond conditioned patterns that don’t serve us. A survey by U.S. Bank, however, finds that as parents and primary caregivers, we need to do better in our children’s formative years.
Half of the college students surveyed said they would give themselves a ‘C’ or below when asked how successful they are in managing their money.
- 44% say they have little to no knowledge of creating and maintaining a budget
- 60% believe using checks and debit cards can help build credit
- 63% think 401 (k) investments are guaranteed
As for where they are ‘getting’ or ‘not getting’ this information, The survey found that 91% of students learned about money from their parents, either directly or by example, and 55% of students identified their parents as the number one influence on their financial habits, as well as their go-to source for financial advice.
“Personal financial knowledge and confidence is critical to the health of our national economy,” said Robyn Gilson, vice president of strategy and insights at U.S. Bank. “It has never been more important for parents to engage in an ongoing dialogue with their children about personal money management and ways to maintain good financial habits. Students need to feel informed, prepared and confident in the decisions they are making today, which can impact them for years to come.”
Parents may also want to consider the link between their child’s financial literacy and their own financial well-being. 47% of the students surveyed believe a co-signer will not be held accountable for paying off the loan if the student doesn’t find a job.
As for how to begin giving your child a strong set of financial values, think about the 5 most important things you want to teach your child about money. Ask yourself what you have to change in your own life to walk the walk and be the role model they need you to be.