What You Need to Know
- Parents are committed to imparting more financial knowledge than they got growing up, a new study has found.
- Eighty-three percent of parents said they openly discussed finances with their children, while only 51% had such conversations with their own parents.
- While a gender gap in investing knowledge persists, women today feel strongly about passing financial lessons on to their children.
Parents are providing more financial support for their children in light of the pandemic, and are committed to imparting more financial knowledge than they received growing up, according to a new study from Bank of America.
The independent market research firm Concentrix conducted a panel-sample online survey from Oct. 28 to Nov. 5 among 2,000 affluent respondents across the U.S., including 1,456 current and future parents. Respondents 18 to 24 had investable assets between $50,000 and $1 million; older respondents had investable assets between $100,000 and $1 million.
Thirty-one percent of parents surveyed said they are financially supporting their children more now than they did before the pandemic. Current and future parents are willing to pay major expenses and for life events, such as their college education and wedding, but are less likely to do so for everyday expenses.
Seventy-seven percent of parents said they plan to stop financially supporting their children after they reach certain milestones, including once their children have obtained a good salary, according to 30%, and started a first job, 27%.
Seven in 10 current and future fathers and 66% of mothers said they expect to receive assistance in their later years from their children. The most common things they expect their children to help them with are small acts of service, such as fixing something in the house or helping with taxes, treating them to dinner or drinks and taking them shopping.
Baby boomers and older parents were least likely among survey participants to expect help from their children later in life.
Among those who do anticipate receiving help from their children, most limit expectations to small acts of service rather than covering medical expenses or finding/paying for an adult care center.
Passing Down Financial Knowledge
More than half of both affluent parents and non-parents in the survey said their parents taught them the basics of finance, including how to find bargains, save money, write checks and balance a checkbook, prioritize when low on money, open accounts and set a budget.
Their parents also taught them how to manage credit cards and credit card debt and how to save and invest for retirement.
Parents today want to pass similar financial lessons along to their own children, though at a significantly higher rate, according to the survey.