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2016 Parents, Kids and Money Survey Results

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T. Rowe Price's 2016 Parents, Kids & Money Survey found that parents’ reluctance to discuss money with their kids has not yet translated to a reluctance to spend it on them. Nearly half of parents (46%) have gone into debt to cover something their kids want and most worry about spoiling their kids (58%). Yet less than half (44%) of parents take advantage of the opportunity to discuss money with their kids most of the time.

“Parents would be better served investing the time to discuss money matters with their kids rather than investing their money in more stuff,” says Stuart Ritter, CFP®, a senior financial planner at T. Rowe Price.

T. Rowe Price encourages parents to invest in their kids’ futures by talking with them about money matters weekly. The survey found that parents who discuss financial topics with their kids at least once a week are nearly twice as likely to have kids who say they are smart about money (68% vs. 36%). To help, T. Rowe Price created MoneyConfidentKids.com, which provides free online games for kids, tips for parents focused on financial concepts such as goal setting, spending versus saving, inflation, asset allocation, and investment diversification, as well as lessons for educators.

Published in: Economy & Finance

2016 Parents, Kids and Money Survey Results

  1. 1. 8TH ANNUAL PARENTS, KIDS & MONEY SURVEY March 2016 Detailed Results
  2. 2. 2 Contents Saving for kids’ education Household Finances…………………………………………………………………..3 Household Debt………………………………………………………………………13 Savings………………………………………………………………………………..24 Emergency Fund……………………………………………………………………..27 Retirement Savings…………………………………………………………………..34 Parental Knowledge, Attitudes, and Behaviors……………………………………39 Financial Discussions………………………………………………………………..47 Teaching Kids About Finances……………………………………………………...59 Allowance……………………………………………………………………………..67 Kids’ Responses……………………………………………………………………...72 Respondent Profile…………………………………………………………………..89 Objective and Methodology ………………………………………………………...94
  3. 3. HOUSEHOLD FINANCES
  4. 4. 4 38% 26% 22% 8% 7% 54% 23% 11% 5% 7% 0% 10% 20% 30% 40% 50% 60% I have sole responsibility I’m primarily responsible, although others are involved I share equally in managing the finances I’m involved, but someone else is primarily responsible I’m not involved at all Men Women Managing Household Finances T. Rowe Price 2016 Parents, Kids & Money Survey N=865 (Married) Q13. HOW INVOLVED ARE YOU IN MANAGING THE HOUSEHOLD FINANCES?  Men are more likely to have sole responsibility, while women are more likely to share equally in managing the household finances = Statistically significant --.05 level
  5. 5. 5 17% 83% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% No Yes Household Budget T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q17. DO YOU HAVE A HOUSEHOLD BUDGET?
  6. 6. 6 3% 18% 79% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Not sure No Yes Budget Surplus T. Rowe Price 2016 Parents, Kids & Money Survey N=905 (Have Household Budget) Q18. IS THERE TYPICALLY MONEY LEFT OVER AFTER PAYING ALL THE MONTHLY EXPENSES?
  7. 7. 7 33% 67% 0% 10% 20% 30% 40% 50% 60% 70% 80% Pull money from a retirement account Go into debt Facing Financial Hardship T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q19. IF FACED WITH FINANCIAL HARDSHIP THAT YOU COULDN’T OTHERWISE COVER, WHICH OF THE FOLLOWING TWO OPTIONS WOULD YOU CHOOSE FIRST?  32% of those who say they would choose to pull money from a retirement account do not currently have any retirement savings  Of the 589 parents who do currently have retirement savings, 42% would opt to pull money from retirement as opposed to going into debt
  8. 8. 8 17% 24% 16% 43% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Strongly agree Somewhat agree Somewhat disagree Strongly disagree Financial Keeping Financial Secrets Q59. HOW MUCH DO YOU AGREE OR DISAGREE WITH THE FOLLOWING STATEMENTS: I KEEP FINANCIAL SECRETS FROM MY SPOUSE/PARTNER? T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) 41% Agree  Men are more likely than women to say they keep financial secrets from their spouse/partner (50% vs. 31%)  Keeping financial secrets decreases by generation (60% for millennials, 39% for Gen Xers, and 16% for baby boomers)
  9. 9. 9 8% 14% 18% 24% 31% 50% 57% 0% 10% 20% 30% 40% 50% 60% None of the above Investment account Credit card Checking account Online/gaming account Piggy bank Savings account T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Kids’ Finances Q55. WHICH OF THE FOLLOWING DO YOUR KIDS HAVE? (CHECK ALL THAT APPLY)  A total of 79% of kids have either a savings account or a piggy bank
  10. 10. 10 24% 17% 28% 31% 0% 5% 10% 15% 20% 25% 30% 35% $300 or more $200 to $299 $100 to $199 Less than $100 Amount Spent on Kid – Birthday Presents T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q68. THINKING ONLY ABOUT YOUR KID WHO WILL BE TAKING THE SURVEY, APPROXIMATELY HOW MUCH DID YOU SPEND IN THE PAST 12 MONTHS ON BIRTHDAY PRESENTS?
  11. 11. 11 23% 18% 26% 33% 0% 5% 10% 15% 20% 25% 30% 35% $300 or more $200 to $299 $100 to $199 Less than $100 Amount Spent on Kid – Birthday Party T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q68. THINKING ONLY ABOUT YOUR KID WHO WILL BE TAKING THE SURVEY, APPROXIMATELY HOW MUCH DID YOU SPEND IN THE PAST 12 MONTHS ON A BIRTHDAY PARTY?
  12. 12. 12 35% 29% 36% 0% 5% 10% 15% 20% 25% 30% 35% 40% $500 or more $200 to $499 Less than $200 Amount Spent on Kid – Extracurricular Activities T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q68. THINKING ONLY ABOUT YOUR KID WHO WILL BE TAKING THE SURVEY, APPROXIMATELY HOW MUCH DID YOU SPEND IN THE PAST 12 MONTHS ON EXTRACURRICULAR ACTIVITIES?
  13. 13. HOUSEHOLD DEBT
  14. 14. 14 16% 2% 9% 12% 14% 20% 23% 40% 48% 56% 0% 10% 20% 30% 40% 50% 60% I don't have any debt Other Payday loan Student loan (from kid's education) Friend/relative debt Student loan (from parent's education) Medical debt Car loan Mortgage Credit card debt Types of Debt T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q14. WHICH OF THE FOLLOWING TYPES OF DEBT DO YOU HAVE? (CHECK ALL THAT APPLY)  61% of parents have more than one type of debt, with a mean number of debt types at 2.25  5% of parents have student loan debt for both parents’ and kids’ education  Married parents are more likely than single parents to have debt (86% vs. 76%) Mean Types of Debt: 2.25
  15. 15. 15 18% 34% 22% 26% 0% 10% 20% 30% 40% Strongly agree Somewhat agree Somewhat disagree Strongly disagree Perception of Credit Card Debt Q59. HOW MUCH DO YOU AGREE OR DISAGREE WITH THE FOLLOWING STATEMENT: EVERYBODY HAS CREDIT CARD DEBT? T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) 52% Agree  Men are more likely than women to say that everybody has credit card debt (57% vs. 46%)
  16. 16. 16 25% 24% 24% 27% 0% 5% 10% 15% 20% 25% 30% 35% 40% $175,000 or more $100,000 to $174,999 $50,000 to $99,999 Less than $50,000 Amount of Debt – Mortgage T. Rowe Price 2016 Parents, Kids & Money Survey N=526 (Have a Mortgage) Q15. WHAT IS THE APPROXIMATE BALANCE (I.E., THE AMOUNT YOU STILL OWE) FOR YOUR MORTGAGE? Mean: $119,222 Median: $92,250
  17. 17. 17 21% 36% 20% 23% 0% 5% 10% 15% 20% 25% 30% 35% 40% $20,000 or more $10,000 to $19,999 $5,000 to $9,999 Less than $5,000 Amount of Debt – Car Loan T. Rowe Price 2016 Parents, Kids & Money Survey N=436 (Have a Car Loan) Q15. WHAT IS THE APPROXIMATE BALANCE (I.E., THE AMOUNT YOU STILL OWE) FOR YOUR CAR LOAN? Mean: $12,254 Median: $10,000
  18. 18. 18 29% 22% 26% 23% 0% 5% 10% 15% 20% 25% 30% 35% 40% $6,000 or more $3,000 to $5,999 $1,000 to $2,999 Less than $1,000 Amount of Debt – Credit Cards T. Rowe Price 2016 Parents, Kids & Money Survey N=611 (Have a Credit Card Debt) Q15. WHAT IS THE APPROXIMATE BALANCE (I.E., THE AMOUNT YOU STILL OWE) FOR YOUR CREDIT CARDS? Mean: $6,105 Median: $3,000
  19. 19. 19 27% 21% 29% 23% 0% 5% 10% 15% 20% 25% 30% 35% 40% $30,000 or more $15,000 to $29,999 $5,000 to $14,999 Less than $5,000 Amount of Debt – Student Loans (Parents) T. Rowe Price 2016 Parents, Kids & Money Survey N=611 (Have Student Loans for Parents’ Education) Q15. WHAT IS THE APPROXIMATE BALANCE (I.E., THE AMOUNT YOU STILL OWE) FOR YOUR STUDENT LOANS (FOR YOU OR SPOUSE’S EDUCATION)? Mean: $27,078 Median: $12,500
  20. 20. 20 32% 22% 18% 27% 0% 5% 10% 15% 20% 25% 30% 35% 40% $10,000 or more $5,000 to $9,999 $1,000 to $4,999 Less than $1,000 Amount of Debt – Student Loans (Kids) T. Rowe Price 2016 Parents, Kids & Money Survey N=134 (Have Student Loans for Kids’ Education) Q15. WHAT IS THE APPROXIMATE BALANCE (I.E., THE AMOUNT YOU STILL OWE) FOR YOUR STUDENT LOANS (FOR YOUR KIDS)? Mean: $10,768 Median: $5,000
  21. 21. 21 40% 29% 31% 0% 10% 20% 30% 40% 50% 60% $2,000 or more $500 to $1,999 Less than $500 Amount of Debt – Friend/Family Loans T. Rowe Price 2016 Parents, Kids & Money Survey N=150 (Have Friend/Family Loans) Q15. WHAT IS THE APPROXIMATE BALANCE (I.E., THE AMOUNT YOU STILL OWE) FOR YOUR FRIEND/FAMILY LOANS? Mean: $3,855 Median: $1,000
  22. 22. 22 33% 39% 28% 0% 10% 20% 30% 40% 50% 60% $5,000 or more $1,000 to $4,999 Less than $1,000 Amount of Debt – Medical Debt T. Rowe Price 2016 Parents, Kids & Money Survey N=254 (Have Medical Debt) Q15. WHAT IS THE APPROXIMATE BALANCE (I.E., THE AMOUNT YOU STILL OWE) FOR YOUR MEDICAL DEBT? Mean: $7,517 Median: $2,000
  23. 23. 23 37% 42% 20% 0% 10% 20% 30% 40% 50% 60% $2,000 or more $500 to $1,999 Less than $500 Amount of Debt – Payday Loan T. Rowe Price 2016 Parents, Kids & Money Survey N=100 (Have Payday Loan) Q15. WHAT IS THE APPROXIMATE BALANCE (I.E., THE AMOUNT YOU STILL OWE) FOR YOUR PAYDAY LOAN? Mean: $2,291 Median: $1,000
  24. 24. SAVINGS
  25. 25. 25 17% 40% 51% 54% 58% 0% 10% 20% 30% 40% 50% 60% 70% None of the above Money saved for other goals An emergency fund to cover unexpected expenses Money saved for retirement Money saved for kids’ college education Savings Accounts T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q20. WHICH OF FOLLOWING DO YOU HAVE? (CHECK ALL THAT APPLY) Total Types of Savings None: 17% One: 20% Two: 25% Three: 19% Four: 19%  Married parents are more likely than single parents to have retirement savings (56% vs. 46%) and college savings (60% vs. 50%)
  26. 26. 26 Savings Accounts – By Parent Gender and Age T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q20. WHICH OF THE FOLLOWING DO YOU HAVE? (CHECK ALL THAT APPLY) Gender Age Men Women Millennial (A) Gen X (B) Baby Boomer (C) Money saved for kids’ college education 69% 48% 70% (B,C) 56% 55% Money saved for retirement 60% 49% 47% 56% (A) 56% Emergency fund 56% 47% 52% 51% 53% Money saved for other goals 50% 32% 48% 39% 35% None of the above 9% 25% 9% 19% (A) 22% (A)
  27. 27. EMERGENCY FUND
  28. 28. 28 15% 8% 19% 6% 9% 20% 13% 10% 0% 5% 10% 15% 20% 25% More than twelve months Seven to twelve months Six months Five months Four months Three months Two months One month or less Size of Emergency Fund T. Rowe Price 2016 Parents, Kids & Money Survey N=558 (Have Emergency Fund) Q23. FOR HOW MANY MONTHS WOULD YOUR EMERGENCY FUND COVER YOUR FAMILY’S EXPENSES?
  29. 29. 29 20% 80% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% No, I do not maintain a separate account for my emergency fund Yes, I maintain a separate account for my emergency fund Separate Emergency Fund Account T. Rowe Price 2016 Parents, Kids & Money Survey N=558 (Have Emergency Fund) Q24. DO YOU MAINTAIN A SEPARATE ACCOUNT FOR YOUR EMERGENCY FUND, OR IS IT KEPT IN AN ACCOUNT WITH OTHER FUNDS?
  30. 30. 30 2% 9% 5% 5% 34% 67% 1% 11% 20% 23% 38% 81% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Not sure Other investment account College saving account Retirement account Checking account Savings account Yes No Emergency Fund Account Types T. Rowe Price 2016 Parents, Kids & Money Survey N=558 (Have Emergency Fund) Q25. IN WHAT TYPE OF ACCOUNT DO YOU KEEP YOUR EMERGENCY FUND? (CHECK ALL THAT APPLY) Maintain a separate account for emergency fund
  31. 31. 31 25% 3% 16% 17% 23% 24% 28% 7% 12% 13% 20% 20% 22% 24% 24% 0% 5% 10% 15% 20% 25% 30% Nothing Other Cover expen. while unemployed To pay taxes Car purchase or repair Health care costs Home repair/renovation Wedding Down payment on a home Childcare/day care Kids' education Vacation Pay off debt Day-to-day expenses Holiday spending Using the Emergency Fund T. Rowe Price 2016 Parents, Kids & Money Survey N=558 (Have Emergency Fund) Q26. WHAT TYPES OF THINGS HAVE YOU USED EMERGENCY FUND MONEY FOR IN THE PAST TWO YEARS? (CHECK ALL THAT APPLY) 55% have used emergency funds for non-emergencies, and 37% have used emergency funds for more than one non-emergency Across categories, millennials are more likely than older generations to tap into their emergency fund Emergencies Non-Emergencies
  32. 32. 32 5% 8% 32% 60% 0% 10% 20% 30% 40% 50% 60% 70% Other I don't think it's necessary I have enough in other accounts to cover emergencies I can't afford to Why No Emergency Fund T. Rowe Price 2016 Parents, Kids & Money Survey N=528 (Don’t Have Emergency Fund) Q27. WHY DON’T YOU HAVE AN EMERGENCY FUND? (CHECK ALL THAT APPLY)  48% of those who say they can’t afford to have an emergency fund have a household budget, and money left over each month after paying expenses
  33. 33. 33 8% 3% 8% 12% 14% 22% 24% 32% 32% 38% 42% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Other Other investment account College saving account Payday loan Home equity loan or line of credit Retirement savings Personal loan Checking account Savings account Family/friends Credit cards Resources Used for Emergencies T. Rowe Price 2016 Parents, Kids & Money Survey N=528 (Don’t Have Emergency Fund) Q28. IN CASE OF EMERGENCY OR HARDSHIP, WHICH OF THE FOLLOWING WOULD YOU RELY ON FOR FUNDS? (CHECK ALL THAT APPLY)  Women are more likely than men to say family/friends (42% vs. 34%), and less likely to say checking account (28% vs. 38%), savings account (24% vs. 41%) and college savings account (5% vs. 12%)
  34. 34. RETIREMENT SAVINGS
  35. 35. 35 1% 22% 25% 26% 26% 29% 32% 41% 64% 0% 10% 20% 30% 40% 50% 60% 70% Other Annuity or life insurance policy Certificate of deposit (CD) Roth IRA Roth 401(k) plan Regular investment account Traditional IRA Regular savings account 401(k) plan Retirement Accounts T. Rowe Price 2016 Parents, Kids & Money Survey N=589 (Have Retirement Savings) Q29. WHAT TYPES OF ACCOUNTS DO YOU HAVE FOR YOUR RETIREMENT SAVINGS? (CHECK ALL THAT APPLY) Total # of Accounts One: 32% Two: 23% Three: 20% Four +: 25% Mean: 2.67  Of those parents who have retirement savings, 88% use an IRA or 401(k) (traditional or Roth), but 33% use only those types of accounts for retirement savings
  36. 36. 36 30% 70% 0% 10% 20% 30% 40% 50% 60% 70% 80% No Yes Mixed Retirement Accounts T. Rowe Price 2016 Parents, Kids & Money Survey N=320 (Have Regular Savings or Investment Accounts for Retirement Savings) Q30. DO THE REGULAR SAVINGS OR INVESTMENT ACCOUNTS YOU USE FOR RETIREMENT SAVINGS ALSO HAVE MONEY THAT IS NOT GOING TO BE USED FOR RETIREMENT?
  37. 37. 37 Using Money From Retirement Accounts T. Rowe Price 2016 Parents, Kids & Money Survey N=575 (Have Retirement Savings and Not Retired) 48% 1% 10% 12% 13% 15% 16% 8% 8% 9% 9% 13% 15% 16% 17% 17% 0% 10% 20% 30% 40% 50% 60% Nothing Other Cover expen. while unemployed To pay taxes Car purchase or repair Home repair/renovation Health care costs Wedding Childcare/day care Down payment on a home Replenish emergency fund Day-to-day expenses Holiday spending Kids' education Vacation Pay off debt Q31. WHAT TYPES OF THINGS HAVE YOU PAID FOR WITH MONEY TAKEN FROM RETIREMENT SAVINGS IN THE PAST TWO YEARS? (CHECK ALL THAT APPLY) 44% have used retirement funds for non-emergencies, and 28% for more than one non-emergency Across categories, millennials are more likely than older generations to tap into their emergency fund Emergencies Non-Emergencies
  38. 38. 38 22% 38% 24% 17% 0% 10% 20% 30% 40% Strongly agree Somewhat agree Somewhat disagree Strongly disagree Anxiety About Saving for Retirement Q59. HOW MUCH DO YOU AGREE OR DISAGREE WITH THE FOLLOWING STATEMENT: CONVERSATIONS ABOUT SAVING FOR RETIREMENT USUALLY FILL ME WITH A LOT OF ANXIETY? T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) 60% Agree
  39. 39. PARENTAL KNOWLEDGE, ATTITUDES, AND BEHAVIORS
  40. 40. 40 48% 72% 72% 73% 0% 10% 20% 30% 40% 50% 60% 70% 80% Investing Managing expenses Budgeting Money Parents’ Financial Knowledge T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q53. OVERALL, HOW KNOWLEDGEABLE ARE YOU ABOUT EACH OF THE FOLLOWING? (FIVE-POINT SCALE – DISPLAYING TOP 2 BOX)  For each topic, men are more likely than women to say they are knowledgeable
  41. 41. 41 33% 46% 52% 57% 58% 0% 20% 40% 60% 80% I have borrowed from my kids’ “piggy bank” without paying them back I have gone into debt to pay for something my kids wanted I sometimes feel ashamed that I’m not providing enough for my kids I spend too much money on my kids for things they don’t really need I worry that I spoil my kids Parental Attitudes and Behaviors Q56 & Q59. HOW MUCH DO YOU AGREE OR DISAGREE WITH THE FOLLOWING STATEMENTS? (DISPLAYING PERCENT THAT AGREE) T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents)  75% of parents who worry that they spoil their kids also say they spend too much on things their kids don’t really need, compared with 32% of parents who don’t worry about spoiling  Men are more likely than women to worry about spoiling their kids (61% vs. 55%), go into debt to pay for something their kids want (53% vs. 40%), and borrow from their kids’ piggy banks (38% vs. 29%)
  42. 42. 42 28% 15% 15% 22% 24% 48% 0% 10% 20% 30% 40% 50% 60% None of the above Told my kids we have more money than we really do Used money my kids have received as gifts to buy something for myself Told my kids we have less money than we really do Told my kids we can’t afford things when we really can Used money as incentive for good grades or good behavior Parental Behaviors T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q49. WHICH OF THE FOLLOWING THINGS HAVE YOU DONE? (CHECK ALL THAT APPLY)  72% of parents have done at least one of the listed behaviors  Millennials are more likely than older generations to misrepresent the household financial status
  43. 43. 43 15% 10% 15% 19% 24% 28% 30% 32% 34% 42% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% None of the above Robo-advisor Books or other materials by celebrity spokespeople Social media Financial news channels Parents Friends Traditional finacial advisor Financial websites or apps Google/my own research Financial Resources T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q54. WHEN IT COMES TO FINANCIAL MATTERS, WHICH OF THE FOLLOWING DO YOU CONSULT? (CHECK ALL THAT APPLY)
  44. 44. 44 2% 4% 19% 75% 0% 20% 40% 60% 80% The cost of bonds becoming more expensive and stocks becoming less expensive The cost of stock becoming more expensive and bonds becoming less expensive The value of currency rising, and the cost of goods and services falling A general increase in the price of goods and services over time Financial Awareness: Inflation T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q60. WHAT IS INFLATION?
  45. 45. 45 6% 8% 35% 51% 0% 10% 20% 30% 40% 50% 60% A way to save for college A way to save for retirement that your employer fully funds A way to save for retirement where you contribute after-tax money A way to save for retirement where you contribute pre-tax money Financial Awareness: Roth IRA T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q60. WHAT IS A ROTH IRA?
  46. 46. 46 Parents’ Knowledge of Saving and Investing T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) 38% 45% 48% 53% 70% 0% 20% 40% 60% 80% Stocks are generally less risky investments than bonds A 50-year-old shouldn’t put any of their retirement money in stocks because stocks can lose money Having an emergency fund to cover one or two months' living expenses is sufficient If I save 6% of my income toward retirement each year, I’ll have enough money to comfortably retire at age 65 What investments you choose (e.g., what stock, bond, or mutual fund) matters more than how much money you invest Q62. PLEASE INDICATE WHETHER EACH OF THE FOLLOWING STATEMENTS IS TRUE OR FALSE (DISPLAYING PERCENT SAYING TRUE)  Men are more likely than women to say saving 6% a year is enough for retirement (58% vs. 47%), an emergency fund lasting one to two months is sufficient (51% vs. 44%), and stocks are less risky than bonds (44% vs. 33%)
  47. 47. FINANCIAL DISCUSSIONS
  48. 48. 48 8% 13% 12% 25% 30% 13% 0% 5% 10% 15% 20% 25% 30% 35% Once a day or more A few times a week Once a week A few times a month Once a month or less Never Frequency of Financial Discussions T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q42. OVERALL, HOW OFTEN DO YOU DISCUSS ANY FINANCIAL TOPICS (E.G., THE IMPORTANCE OF SAVING AND SPENDING WISELY, SETTING FINANCIAL GOALS, BUDGETING, ETC.) WITH YOUR KIDS?  Parents who discuss financial topics with their kids at least once a week are more likely than those that do not to have kids who say they are smart about money (68% vs. 36%)  Men are more likely than women to say more than once a week (36% vs. 29%)  Millennials are more likely than Gen Xers and baby boomers to say more than once a week (43% vs. 32% vs. 21%)
  49. 49. 49 15% 85% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% I set aside specific time to discuss financial topics with my kids We generally just talk for a few minutes as things come up Types of Financial Discussions T. Rowe Price 2016 Parents, Kids & Money Survey N=949 (Have Financial Discussions With Kids) Q43. WHICH OF THE FOLLOWING BEST DESCRIBES HOW YOU DISCUSS FINANCIAL TOPICS WITH YOUR KIDS?
  50. 50. 50 40% 59% 0% 20% 40% 60% 80% My kids are too young to talk to about money and finances I generally only talk to my kids about money when they ask about it Financial Conversations Q59. HOW MUCH DO YOU AGREE OR DISAGREE WITH THE FOLLOWING STATEMENTS? (DISPLAYING PERCENT THAT AGREE) T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents)
  51. 51. 51 15% 14% 23% 20% 29% 0% 5% 10% 15% 20% 25% 30% 35% Extremely reluctant Very reluctant Somewhat reluctant Not very reluctant Not at all reluctant Reluctance to Discuss Financial Matters T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q44. HOW RELUCTANT ARE YOU TO DISCUSS FINANCIAL MATTERS WITH YOUR KIDS?  71% of parents have reluctance to discussing financial matters with their kids
  52. 52. 52 54% 55% 80% 80% 83% 86% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Not talking about money in public Giving to charity Setting financial goals Maintaining a budget How to earn money The importance of saving Importance of Financial Discussions T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q45. HOW IMPORTANT IS IT TO DISCUSS EACH OF THE FOLLOWING WITH YOUR KIDS? (FIVE-POINT SCALE – DISPLAYING TOP 2 BOX)  For each topic, parents who say it’s important to discuss the topic with kids are more likely to have frequent financial discussions in general
  53. 53. 53 18% 16% 16% 20% 21% 19% 17% 20% 20% 18% 17% 22% 18% 22% 23% 10% 13% 25% 18% 19% 17% 13% 15% 14% 29% 23% 24% 39% 35% 20% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Terrorism Family Finances Death Bullying Drugs Sex Extremely Very Somewhat Not Very Not at All T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Uncomfortable Discussions Q46. HOW UNCOMFORTABLE ARE YOU DISCUSSING EACH OF THE FOLLOWING WITH YOUR KIDS?
  54. 54. 54 5% 3% 8% 15% 23% 40% 7% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% More than five times Five times Four times Three times Twice Once Never Teachable Moments T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q47. ABOUT HOW MANY TIMES DURING THE COURSE OF A NORMAL DAY DO YOU HAVE THE OPPORTUNITY TO TALK TO YOUR KIDS ABOUT FINANCIAL TOPICS?
  55. 55. 55 16% 28% 53% 3% 0% 10% 20% 30% 40% 50% 60% Always Most of the time Some of the time Never Taking Advantage of Teachable Moments T. Rowe Price 2016 Parents, Kids & Money Survey N=1,010 (Have Teachable Moments) Q48. HOW OFTEN DO YOU TAKE ADVANTAGE OF THE OPPORTUNITIES THAT OCCUR THROUGHOUT THE DAY TO TALK TO YOUR KIDS ABOUT FINANCIAL TOPICS?
  56. 56. 56 40% 26% 34% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% No difference Girls Boys Kids Asking Questions T. Rowe Price 2016 Parents, Kids & Money Survey N=561 (Have Boys and Girls) Q50. BASED ON YOUR EXPERIENCE, WHO ASKS ABOUT MONEY MORE?
  57. 57. 57 46% 24% 30% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% No difference Girls Boys Talking to Boys and Girls T. Rowe Price 2016 Parents, Kids & Money Survey N=561 (Have Boys and Girls) Q51. DO YOU FIND THAT YOU SPEND MORE TIME TALKING ABOUT MONEY WITH YOUR BOY(S) OR GIRL(S)?
  58. 58. 58 Talking to Boys and Girls T. Rowe Price 2016 Parents, Kids & Money Survey N=300 (Talk More to Boys or Girls) Q52. WHY DO YOU TALK MORE WITH YOUR [BOY(S) OR GIRL(S)]? (CHECK ALL THAT APPLY) 26% 32% 39% 43% 51% 54% 24% 33% 41% 30% 45% 52% 0% 10% 20% 30% 40% 50% 60% They play on financial games or apps more They are more likely to have more money to manage They are older They need more help with money They seem more interested They ask more questions Girls Boys Talk More to: = Statistically significant - .05 level  Parents who talk with boys about finances more than girls are more likely to say boys need help with money
  59. 59. TEACHING KIDS ABOUT FINANCES
  60. 60. 60 7% 30% 42% 67% 68% 0% 10% 20% 30% 40% 50% 60% 70% 80% None of the above Manage their own accounts Decide what charities to donate to Decide what they spend their own money on Decide what to save their money for Allowing Kids to Manage Their Finances T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q58. WHICH OF THE FOLLOWING DO YOU ALLOW YOUR KIDS TO DO ON THEIR OWN? (CHECK ALL THAT APPLY)
  61. 61. 61 44% 19% 20% 41% 0% 10% 20% 30% 40% 50% None of the above Showed financial statements to my kids Talked with my kid(s) about market volatility Talked with my kid(s) about the value of long-term investing Financial Conversations T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q49. WHICH OF THE FOLLOWING THINGS HAVE YOU DONE? (CHECK ALL THAT APPLY)  56% of parents have done at least one of the behaviors listed  For all options, men are more likely than women to respond positively
  62. 62. 62 46% 58% 67% 74% 80% 83% 0% 20% 40% 60% 80% 100% When my kids receive money as a gift, I decide what to do with the money I let my kids make bad financial decisions so they can learn from their mistakes I would be interested in taking a course that teaches financial basics I let my kids manage their own money I would enroll my kids in a course about money and finances for kids I keep a pretty close eye on my kids’ money and what they’re doing with it Letting Kids Manage Their Money Q56 AND Q59. HOW MUCH DO YOU AGREE OR DISAGREE WITH THE FOLLOWING STATEMENTS? (DISPLAYING PERCENT THAT AGREE) T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents)  Men are more likely than women to say they’d be interested in a course about financial basics (74% vs. 60%)
  63. 63. 63 4% 29% 32% 19% 16% 0% 5% 10% 15% 20% 25% 30% 35% Never 15 or older 10 to 14 5 to 9 1 to 4 Age to Start – Bank Account T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q57. HOW OLD DO YOU THINK KIDS SHOULD BE WHEN YOU OPEN A BANK ACCOUNT IN THEIR NAME? Mean: 9.90 Median: 10
  64. 64. 64 22% 33% 30% 8% 6% 0% 5% 10% 15% 20% 25% 30% 35% Never 15 or older 10 to 14 5 to 9 1 to 4 Age to Start – Online Account T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q57. HOW OLD DO YOU THINK KIDS SHOULD BE WHEN YOU OPEN AN ACCOUNT FOR THEM TO MAKE IN-APP PURCHASES? Mean: 9.74 Median: 12
  65. 65. 65 19% 68% 5% 3% 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% Never 15 or older 10 to 14 5 to 9 1 to 4 Age to Start – Credit Card T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q57. HOW OLD DO YOU THINK KIDS SHOULD BE WHEN YOU GIVE THEM A CREDIT CARD? Mean: 13.39 Median: 17
  66. 66. 66 14% 19% 6% 36% 8% 3% 15% 0% 5% 10% 15% 20% 25% 30% 35% 40% Older than 18 18 17 16 15 14 Younger than 14 Age to Start – Employment T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q57. HOW OLD DO YOU THINK KIDS SHOULD BE WHEN YOU MAKE THEM GET A JOB? Mean: 17.28 Median: 16
  67. 67. ALLOWANCE
  68. 68. 68 7% 9% 30% 46% 8% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Never 15 or older 10 to 14 5 to 9 1 to 4 Age to Start – Giving Allowance T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q57. HOW OLD DO YOU THINK KIDS SHOULD BE WHEN YOU: START GIVING THEM AN ALLOWANCE? Mean: 8.01 Median: 8
  69. 69. 69 21% 19% 60% 0% 10% 20% 30% 40% 50% 60% 70% I don’t give allowance I give allowance without any requirements I give allowance, but kids have to earn it Allowance Approach T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q69. WHICH OF THE FOLLOWING BEST DESCRIBES YOUR APPROACH TO ALLOWANCE?  Men are more likely than women to give allowance (84% vs. 74%)  Millennials and baby boomers are more likely than Gen Xers to give allowance (84% vs. 76% vs. 86%)
  70. 70. 70 4% 16% 18% 61% 0% 10% 20% 30% 40% 50% 60% 70% $51 or more $21 to $50 $11 to $20 $10 or less Amount of Allowance T. Rowe Price 2016 Parents, Kids & Money Survey N=855 (Give an Allowance) Q70. REGARDLESS OF HOW OFTEN YOU GIVE ALLOWANCE, ON AVERAGE, HOW MUCH DO YOU GIVE PER WEEK?
  71. 71. 71 8% 16% 8% 21% 18% 14% 15% 0% 5% 10% 15% 20% 25% 11 or older 10 9 8 7 6 5 or younger Age Allowance Begins T. Rowe Price 2016 Parents, Kids & Money Survey N=855 (Give an Allowance) Q72. HOW OLD WERE YOUR KIDS WHEN YOU STARTED GIVING ALLOWANCE?
  72. 72. KIDS’ RESPONSES
  73. 73. 73 18% 29% 43% 9% 2% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Extremely Very Somewhat Not very Not at all Kids’ Knowledge of Money T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q73. OVERALL, HOW SMART ARE YOU ABOUT MONEY?  Eight to nine year olds are more likely than 10 to 12 year olds and 13 to14 year olds to say they are smart about money (54% vs. 44% vs. 44%)
  74. 74. 74 22% 55% 18% 6% 0% 10% 20% 30% 40% 50% 60% Frequently Occasionally Rarely Never Frequency of Financial Conversations T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q74. HOW OFTEN DO YOU TALK WITH YOUR PARENTS ABOUT MONEY AND FINANCES?
  75. 75. 75 18% 21% 22% 26% 40% 44% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% None of the above Friends/other kids Aunts/ uncles/ cousins Brothers and sisters Teachers Grandparents Learning About Money From Others T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q75. WHO ELSE BESIDES YOUR PARENTS TALKS TO YOU OR TEACHES YOU ABOUT MONEY AND FINANCES? (CHECK ALL THAT APPLY)
  76. 76. 76 16% 84% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% My parents set aside specific time to discuss financial topics with me We generally just talk for a few minutes as things come up Discussing Financial Topics T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q76. WHICH OF THE FOLLOWING BEST DESCRIBES HOW YOU DISCUSS FINANCIAL TOPICS WITH YOUR PARENTS?
  77. 77. 77 Kid Agree Statements T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) 35% 38% 44% 51% 89% 0% 20% 40% 60% 80% 100% My parents are uncomfortable talking to me about money My parents fight about money My friends and I talk about money a lot I play a lot of games that have money involved My parents set a good example when it comes to how to save and spend money Q77. HOW MUCH DO YOU AGREE OR DISAGREE WITH THE FOLLOWING STATEMENTS? (DISPLAYING PERCENT THAT AGREE)  Eight to nine year olds are more likely than 10 to12 year olds and 13 to 14 year olds to say they talk to friends about money (52% vs. 39% vs. 45%), their parents fight about money (47% vs. 34% vs. 35%), and their parents are uncomfortable talking with them about money (45% vs. 29% vs. 34%)
  78. 78. 78 1% 19% 11% 69% 0% 10% 20% 30% 40% 50% 60% 70% 80% Not sure No Yes, and I don't have to earn it Yes, but I have to earn it Allowance T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q78. DO YOU GET AN ALLOWANCE?
  79. 79. 79 4% 19% 62% 16% 0% 10% 20% 30% 40% 50% 60% 70% Other Monthly Weekly Daily Frequency of Allowance T. Rowe Price 2016 Parents, Kids & Money Survey N=871 (Receive an Allowance) Q79. HOW OFTEN DO YOU GET AN ALLOWANCE?
  80. 80. 80 7% 17% 17% 60% 0% 10% 20% 30% 40% 50% 60% 70% $51 or more $21 to $50 $11 to $20 $10 or less Amount of Allowance T. Rowe Price 2016 Parents, Kids & Money Survey N=871 (Receive an Allowance) Q80. ON AVERAGE, HOW MUCH ALLOWANCE DO YOU GET PER WEEK?
  81. 81. 81 Money Management T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) 33% 51% 69% 86% 87% 91% 0% 20% 40% 60% 80% 100% My parents have borrowed from my “piggy bank” without paying me back I spend my allowance as soon as I get it My parents encourage me to give money to charity My parents let me manage my own money My parents encourage me to donate clothes or toys to charitable causes (e.g., Goodwill, Salvation Army, Toys for Tots, etc.) It’s important to save money for emergencies Q81. HOW MUCH DO YOU AGREE OR DISAGREE WITH THE FOLLOWING STATEMENTS? (DISPLAYING PERCENT THAT AGREE)
  82. 82. 82 33% 8% 59% 0% 10% 20% 30% 40% 50% 60% 70% I don't know No Yes Knowledge of Parental Saving T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q82. DO YOUR PARENTS PUT MONEY ASIDE FOR SAVINGS EACH MONTH?
  83. 83. 83 53% 47% 0% 10% 20% 30% 40% 50% 60% No Yes Lending Money to Friends T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q85. HAVE YOU EVER LENT MONEY TO YOUR FRIENDS?
  84. 84. 84 15% 85% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% No Yes Getting Paid Back T. Rowe Price 2016 Parents, Kids & Money Survey N=515 (Lent Money to a Friend) Q86. DO THEY USUALLY PAY YOU BACK?
  85. 85. 85 15% 22% 29% 25% 9% 0% 5% 10% 15% 20% 25% 30% 35% All of it More than half of it Half of it Less than half of it None of it Kids’ Savings Habits T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q87. IN GENERAL, HOW MUCH OF THE MONEY YOU GET DO YOU SAVE?
  86. 86. 86 23% 23% 27% 19% 8% 0% 5% 10% 15% 20% 25% 30% Six months or more Three to five months One to two months Two to three weeks One week or less Saving for a Goal T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) Q88. WHAT IS THE LONGEST YOU’VE EVER SAVED FOR SOMETHING YOU WANTED TO BUY?
  87. 87. 87 Kid Agree Statements T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) 41% 43% 57% 62% 78% 0% 20% 40% 60% 80% 100% I’ve lied to my parents about what I’ve spent money on I sometimes feel ashamed that I have less than most of the other kids I expect my parents to buy me what I want I expect my parents to cover the cost for whatever college I want to go to I would consider going to a less expensive college to avoid taking on student loans Q89. HOW MUCH DO YOU AGREE OR DISAGREE WITH THE FOLLOWING STATEMENTS? (DISPLAYING PERCENT THAT AGREE)  Eight to nine year olds are more likely than 10 to 12 year olds and 13 to14 year olds to say they expect parents to buy them what they want (70% vs. 53% vs. 51%) and pay for whatever college they want (74% vs. 60% vs. 56%)
  88. 88. 88 Knowledge based Kids Questions T. Rowe Price 2016 Parents, Kids & Money Survey N=1,086 (Total Respondents) 29% 50% 68% 78% 80% 85% 0% 20% 40% 60% 80% 100% It costs the same amount of money for my parents to buy me holiday presents as it does for them to buy a car A savings account is the only type of account in which your money can grow What investments you choose (e.g., what stock, bond, or mutual fund) matters more than how much money you invest When parents talk about ‘investing’ their money it includes things like buying stocks and bonds My parents should save for college in a savings account It costs more to go to college than it does to buy a car Q95. PLEASE INDICATE WHETHER EACH OF THE FOLLOWING STATEMENTS IS TRUE OR FALSE. (DISPLAYING PERCENT SAYING TRUE)
  89. 89. RESPONDENT PROFILE
  90. 90. 90 49%51% Respondent Profile 26% 25% 25% 24% South Northeast West Midwest Q2. REGIONQ1. AGE Q3. GENDER Men Women Q5. HOUSEHOLD INCOME 76% 11% 9% 4% 1% Married Separated/divorced Single Married (same sex) Widow/widower Q4. MARITAL STATUS 29% 58% 13% < 35 35–50 51 + 30% 38% 32% < $50K $50K–$99,999 $100K + 74% 16% 9% 5% 2% White/Caucasian Hispanic/Latino Black/African American Asian Native American Q6. RACE/ETHNICITY T. Rowe Price Parents, Kids & Money Survey N=1,086 (Parents: Total respondents)
  91. 91. 91 Respondent Profile Q7. EDUCATION LEVEL 64% 14% 9% 4% 4% 3% 2% Employed full time Stay-at-home parent Employed part time Self-employed Unemployed Retired Student Q8. EMPLOYMENT STATUS 2% 11% 21% 12% 33% 21% < HS graduate HS graduate Some college Associate's degree Bachelor's degree Graduate degree 28% 42% 19% 11% 1 2 3 4 + Q9. # KIDS IN HOUSEHOLD 51%49% Q11. KID GENDER BoysGirls Q12. KID AGE 10% 14% 16% 13% 14% 19% 14% 8 9 10 11 12 13 14 T. Rowe Price Parents, Kids & Money Survey N=1,086 (Parents: Total respondents) 80% 15% 5% Biological only Non- biolgical only Mix TYPE OF KIDS
  92. 92. 92 Respondent Profile 25% 53% 17% 4% 1% None One Two Three Four + # BOYS IN HOUSEHOLD# KIDS IN HOUSEHOLD KID GENDER MIX 28% 42% 19% 11% One Two Three Four + 21% 25% 54% Girls only Boys only Boys and girls T. Rowe Price Parents, Kids & Money Survey N=1,086 (Parents: Total respondents) # GIRLS IN HOUSEHOLD 22% 51% 21% 5% 2% None One Two Three Four +
  93. 93. 93 Respondent Profile 75% 22% 3% None One Two + # KIDS 8-14 IN HH# KIDS < 8 IN HH KID AGE MIX 25% 53% 42% 19% 11% None One Two Three Four + 29% 52% 3% 16% 8-14 only 8-14 and younger 8-14 and older 8-14 and both T. Rowe Price Parents, Kids & Money Survey N=1,086 (Parents: Total respondents) # KIDS > 14 IN HH 63% 30% 6% 1% One Two Three Four +
  94. 94. OBJECTIVE AND METHODOLOGY
  95. 95. 95 Objective and Methodology Objective  To understand the basic financial knowledge, attitudes, and behaviors of both parents of children ages 8-14 and their children ages 8-14. Methodology  T. Rowe Price commissioned an online survey of parents of children ages 8-14 and their children ages 8-14.  The survey was fielded from 2/4/16 to 2/11/16, with parent quotas of approximately 50% men and 50% women.  A total of 1,086 parents and 1,086 children ages 8-14 in the U.S. participated; the sampling error for a sample of 1,086 is +/-3% at the 95% confidence interval.  The survey was fielded through MetrixLab, Inc. T. Rowe Price Parents, Kids & Money Survey
  96. 96. THANK YOU. CQPDJEJ5E

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