No slackers here: Teens say they want to learn more about investing
Social media creates investing interest, but parents still are influential.
The internet is beginning to rival parents as the main source of financial education for teens. Although more than half say they learned about handling finances from their parents, they also cite various sources including the following:
- School (47 percent)
- Social media (35 percent)
- Online websites and articles (34 percent)
Parents underestimate how much their kids are learning from social media. Only 12 percent believe their teens use social media for financial education.
“There is a bit of a disconnection between parents’ and kids’ perceptions around financial education,” said Kathleen Malone, financial advisor with Wells Fargo Advisors in Charlotte.
“While 61 percent of parents polled say they’re talking to their kids about finances, only 43 percent of teens report they have had these conversations. It’s very important for families to discuss money — and for our next generation to understand how to handle their finances.”
Wells Fargo recently surveyed both teens and parents about investing. The survey found common ground about the importance of learning about finances and investing. Almost all teens and parents agree that teens who learn about investing will be better off financially later in life.
However, nearly half of the teens and nearly one in three parents give themselves a D or F grade in investment knowledge. Teen girls (53 percent) rated themselves lower in investment knowledge than boys (42 percent).
“The good news here is that three out of four teens say they are ready to learn about investing, and nearly nine in 10 parents believe their teenaged children are ready for it, too,” Malone said. “What’s more, I’m thrilled to see the next generation demonstrate such enthusiasm and desire to hone their investing acumen.”
Online sources are increasingly important.
“Social media has a profound influence on our younger generations,” said Mariana Martinez, family dynamics consultant with Wells Fargo’s Wealth & Investment Management group. “Those generations grew up with social media and often trust many of the platforms more than their parents do. It is vital to establish solid and open communication, create a shared purpose and educate our children so that they are prepared for financial independence.”
However, parents still remain influential. Only one-third say they have talked with their children about investing. Beyond talking to their teen about investing, more than a quarter of parents say they have promoted one or more of the following educational activities to help their teen learn more about investing:
- 17 percent opened a custodial account and invested on their teen’s behalf.
- 13 percent encouraged their teen to play a simulated stock market game that allows them to learn about the market without investing actual money.
- 7 percent gave stocks to their teen so they can follow and learn about the market.
“Financial education is important, and so is a deeper understanding of how Wall Street works,” Malone concluded. “There are many great resources for families to learn and understand together how to manage their money, and this survey shows our kids are ready to learn more about investing.”
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