Its a financial weakness that afflicts both parents and their kids: focusing too much on short-term money matters.
Thats one of the takeaways from T. Rowe Prices 2013 Parents, Kids & Money Survey.
While most parents (73%) have regular conversations with their kids about money, they tend to shy away from conversations about long-term financial goals. Conversations are more likely to revolve around short-term financial needs like back-to-school shopping (62%) than longer-term priorities (39%).
The finding is in keeping with their behavior surrounding their childrens education. While 66% of parents agree that a good education is key to a strong financial future, theyre doing little to save for their childrens college years. In fact, more parents (46%) save regularly for vacation than for college (41%).
Kids look to their parents as financial role models, and for that reason parents need to not only have frequent discussion with their kids about money, but also lead by example, Stuart Ritter, senior financial planner at T. Rowe Price, said in a statement.
Not surprisingly, children display the same short-term focus. Most (63%) save their money for short-term goals, with 25% saying they spend their money right away on things for which they were not saving. Only one in four save their money for long-term goals.
In one of the more light-hearted findings, almost one in four children (24%) believed that the most likely way to save the more than $1 million needed for their retirement was to become famous. Only 21% believed that investing in stocks and bonds was to way to fund their retirement.
The survey polled 1,014 parents and 839 kids ages 8 to 14 from February 21 February 27, 2013.