Majority of parents teach their kids about money,
but fewer than half give them an allowance or open a bank account
CHICAGO, ILLINOIS–(Marketwired – April 23, 2015) – As part of Money Smart Week and Teach Children to Save Day, BMO Harris Bank today released results of its 2015 U.S. Parenting Study on how children are financially educated at home.
According to the report, nearly two thirds (62 percent) of U.S. parents talk to their kids about money, yet only one in five give their youngest child an allowance and only 37 percent have opened a bank account for their child. Of those that do provide an allowance, there is no consensus on when to start.
"Helping your children understand how to spend, save and invest wisely is an important parental responsibility," advises Alex Dousmanis-Curtis, Head, U.S. Retail Banking, BMO Harris Bank. "Children as young as five or six can begin to understand financial concepts. Instilling money management skills at a young age can help youth make informed financial decisions later in life," she added.
Key findings include:
- Parents under age 30 start allowances sooner than others – at an average age of four.
- Of those that give an allowance, one third (32 percent) give five dollars a week, 13 percent give one dollar and 38 percent give 10 dollars or more.
- Affluent parents are the most likely to open a bank account for their youngest child, with 48 percent of the over $100,000-income group having done so. This compares to 37 percent of all parents who have started an account for their youngest.
While a majority of parents speak with the kids about money at least periodically, only slightly more than half (56 percent) have begun to engage their youngest children in financial literacy.
How often parents have conversations about money varies by income level; parents with higher incomes are the least likely to speak to children about money regularly (16 percent), but half (50 percent) still talk about it occasionally. Two thirds (68 percent) of parents turn to others for advice regarding talking to or teaching their children about money. Of those, looking to their own parents for guidance was the lead choice of who to consult (44 percent).
BMO Harris provides the following tips to help parents get started:
- As soon as children start to collect a few coins and understand the value of money, open a savings account for them and explain how interest works.
- Suggest children save at least part of the cash they receive – for birthdays, holidays or jobs – for something they really want, which can make it easier for kids to set aside the money.
- Teach them about the importance of giving back. Explain how donations work, and find one or two organizations that tie into their specific interests.
Visit bmoharris.com/YourFinancialLife for more tips.
The survey results cited in the BMO Harris 2015 Home Buying Report, conducted by Pollara, are compiled from a random sample of 1,501 Americans 18 years of age and over who have at least one child under the age of 10. The survey was conducted between February 3rd and February 5th, 2015. A probability sample of this size would yield results accurate to ± 2.5 percent, 19 times out of 20.
About BMO Harris Bank
BMO Harris Bank provides a broad range of personal banking products and solutions through more than 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. For more information about BMO Harris Bank, go to the company fact sheet. Banking products and services are subject to bank and credit approval, BMO Harris Bank, N.A., Member FDIC. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with approximately 1,600 branches, and CDN $672 billion in assets (as of January 31, 2015).