This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Parents Are Turning Their Kids Into Spenders

NEW YORK ( TheStreet) -- It's not exactly a state secret that kids look to their parents for money, starting with allowances when they're young and sometimes escalating to loans when they're older.

But kids want more from their parents than just cash. They want financial guidance, too, and they count on their parents as mentors on the subject.

T. Rowe Price (TROW) took a long look at the issue of kids and finances with its Parents, Kids and Money Survey.

"Nearly three-fourths (73%) of parents are having regular conversations with their kids about money," the survey says. "Interestingly, kids think the money conversations are taking place less often than parents. Parents also report that their parents (now grandparents) had fewer money conversations with them when they were kids, but 59% of these parents agree that their parents did a good job teaching them about money matters."

But there is a caveat to those figures, and it's fairly big one.

The conversations revolve around what T. Rowe Price calls "short-term" money topics such as back-to-school shopping, rather than focusing on long-term financial topics kids really need to learn, such as how to create a family budget and how to save and invest money.

That's helping turn U.S. kids into spenders, and not savers. The study points out that 63% of children save for short-term goals and are more likely to spend their cash immediately on products they weren't even saving for in the first place.

Those conversations between parents and kids aren't helping America's youth adopt a healthy long-term view on savings and investing. According to T. Rowe Price, only 21% of U.S. kids believe the best way to save $1 million is through investing in stocks and bonds.

If that's not a shocker, try this: The survey says 24% of American kids believe the best way to save $1 million is by becoming famous.

That's not a recipe for success.

What parents need to do, T. Rowe Price says, is to figure out creative ways to teach their kids about money with clarity and common sense.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,131.97 +100.83 0.59%
S&P 500 1,998.98 +14.85 0.75%
NASDAQ 4,552.7590 +33.8570 0.75%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs