2016 Parents, Kids and Money Survey Results

8TH ANNUAL PARENTS, KIDS & MONEY SURVEY

March 2016

Detailed Results

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

HOUSEHOLD FINANCES

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

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

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

33%

67%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Pull money from a retirement account

Go into debt

Facing Financial Hardship


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

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?


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

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


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

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


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

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


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

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


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?

HOUSEHOLD DEBT

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


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

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?


52% Agree

Men are more likely than women to say that everybody has credit card debt (57% vs. 46%)

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: $119,222Median: $92,250

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: $12,254Median: $10,000

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: $6,105Median: $3,000

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: $27,078Median: $12,500

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: $10,768Median: $5,000

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: $3,855Median: $1,000

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: $7,517Median: $2,000

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: $2,291Median: $1,000

SAVINGS

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


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

Savings Accounts – By Parent Gender and Age


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)

EMERGENCY FUND

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

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


Q24. DO YOU MAINTAIN A SEPARATE ACCOUNT FOR YOUR EMERGENCY FUND, OR IS IT KEPT IN AN ACCOUNT WITH OTHER FUNDS?

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


Q25. IN WHAT TYPE OF ACCOUNT DO YOU KEEP YOUR EMERGENCY FUND?(CHECK ALL THAT APPLY)

Maintain a separate accountfor emergency fund

31

25%3%

16%

17%23%

24%28%

7%12%

13%20%20%

22%24%24%

0% 5% 10% 15% 20% 25% 30%

NothingOther

Cover expen. while unemployedTo pay taxes

Car purchase or repairHealth care costs

Home repair/renovation

WeddingDown payment on a home

Childcare/day careKids' education

VacationPay off debt

Day-to-day expensesHoliday spending

Using the 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

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

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%)

RETIREMENT SAVINGS

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

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

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%

NothingOther

Cover expen. while unemployedTo pay taxes

Car purchase or repairHome repair/renovation

Health care costs

WeddingChildcare/day care

Down payment on a homeReplenish emergency fund

Day-to-day expensesHoliday spending

Kids' educationVacation

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

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?


60% Agree

PARENTAL KNOWLEDGE, ATTITUDES, AND BEHAVIORS

40

48%

72%

72%

73%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Investing

Managing expenses

Budgeting

Money

Parents’ Financial Knowledge


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

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)


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

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


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

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


Q54. WHEN IT COMES TO FINANCIAL MATTERS, WHICH OF THE FOLLOWING DO YOU CONSULT?(CHECK ALL THAT APPLY)

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


Q60. WHAT IS INFLATION?

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


Q60. WHAT IS A ROTH IRA?

46

Parents’ Knowledge of Saving and Investing


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 thanhow 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%)

FINANCIAL DISCUSSIONS

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


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

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

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)


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


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

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


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

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


Uncomfortable Discussions

Q46. HOW UNCOMFORTABLE ARE YOU DISCUSSING EACH OF THE FOLLOWING WITH YOUR KIDS?

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


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

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

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

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

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 BoysTalk 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

TEACHING KIDS ABOUT FINANCES

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


Q58. WHICH OF THE FOLLOWING DO YOU ALLOW YOUR KIDS TO DO ON THEIR OWN?(CHECK ALL THAT APPLY)

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


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

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)


Men are more likely than women to say they’d be interested in a course about financial basics (74% vs. 60%)

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


Q57. HOW OLD DO YOU THINK KIDS SHOULD BE WHEN YOU OPEN A BANK ACCOUNT IN THEIR NAME?

Mean: 9.90Median: 10

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


Q57. HOW OLD DO YOU THINK KIDS SHOULD BE WHEN YOU OPEN AN ACCOUNT FOR THEM TO MAKE IN-APP PURCHASES?


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


Q57. HOW OLD DO YOU THINK KIDS SHOULD BE WHEN YOU GIVE THEM A CREDIT CARD?


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


Q57. HOW OLD DO YOU THINK KIDS SHOULD BE WHEN YOU MAKE THEM GET A JOB?


ALLOWANCE

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


Q57. HOW OLD DO YOU THINK KIDS SHOULD BE WHEN YOU: START GIVING THEM AN ALLOWANCE?

Mean: 8.01Median: 8

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


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

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

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?

KIDS’ RESPONSES

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


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

22%

55%

18%

6%

0% 10% 20% 30% 40% 50% 60%

Frequently

Occasionally

Rarely

Never

Frequency of Financial Conversations


Q74. HOW OFTEN DO YOU TALK WITH YOUR PARENTS ABOUT MONEY AND FINANCES?

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


Q75. WHO ELSE BESIDES YOUR PARENTS TALKS TO YOU OR TEACHES YOU ABOUT MONEY AND FINANCES? (CHECK ALL THAT APPLY)

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


Q76. WHICH OF THE FOLLOWING BEST DESCRIBES HOW YOU DISCUSS FINANCIAL TOPICS WITH YOUR PARENTS?

77

Kid Agree Statements


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


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

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


Q78. DO YOU GET AN ALLOWANCE?

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

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

Money Management


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


82

33%

8%

59%

0% 10% 20% 30% 40% 50% 60% 70%

I don't know

No

Yes

Knowledge of Parental Saving


Q82. DO YOUR PARENTS PUT MONEY ASIDE FOR SAVINGS EACH MONTH?

83

53%

47%

0% 10% 20% 30% 40% 50% 60%

No

Yes

Lending Money to Friends


Q85. HAVE YOU EVER LENT MONEY TO YOUR FRIENDS?

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

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


Q87. IN GENERAL, HOW MUCH OF THE MONEY YOU GET DO YOU SAVE?

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


Q88. WHAT IS THE LONGEST YOU’VE EVER SAVED FOR SOMETHING YOU WANTED TO BUY?

87

Kid Agree Statements


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 studentloans


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

Knowledge based Kids Questions


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 doesfor 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 thanhow 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)

RESPONDENT PROFILE

90

49%51%

Respondent Profile

26%

25%

25%

24%

South

Northeast

West

Midwest

Q2. REGIONQ1. AGE Q3. GENDER

MenWomen

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/AfricanAmerican

Asian

Native American

Q6. RACE/ETHNICITY

T. Rowe Price Parents, Kids & Money SurveyN=1,086 (Parents: Total respondents)

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


80%

15%

5%

Biologicalonly

Non-biolgical

only

Mix

TYPE OF KIDS

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


# GIRLS IN HOUSEHOLD

22%

51%

21%

5%

2%

None

One

Two

Three

Four +

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


# KIDS > 14 IN HH

63%

30%

6%

1%

One

Two

Three

Four +

OBJECTIVE AND METHODOLOGY

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

THANK YOU.

CQPDJEJ5E

Economy & Finance

2016 Parents, Kids and Money Survey Results