The average American parent offers their child 114 pieces of unique financial advice per year, according to new research.
However, parents admit their financial advice isn’t always used: Respondents said their child listens only about half (54%) of the time.
A survey of 5,000 American parents — aged 30+ and split evenly by 100 individuals across all 50 states — uncovered this disconnect by asking respondents about the type of financial advice they give their children.
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The research looked at different areas parents feel strong — or not — in their financial knowledge and how they’re seeking to improve the guidance they provide.
On average, respondents said their child asks for financial advice about four times per month. While this may open the door for conversation, parents surveyed also give unsolicited advice about five times a month, adding up to over 100 tips shared per year.
A survey conducted by Talker Research on behalf of the international money app Wise showed that parents’ confidence levels vary in the advice they’re giving to their child.
Of those who are asked for financial advice, 36% said they’re “very” confident, while 34% said they are “somewhat” confident in the suggestions they provide.
Of course, the range of topics parents are asked for advice on impacts their ability to counsel their child.
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Parents were the least confident in their ability to offer advice when it comes to moving and managing money outside the U.S. From a list of 15 different financial areas, parents had the lowest confidence in assisting their child with international finance (4%).
They also lacked confidence in currency conversion (11%) and sending money abroad (14%).
On the other hand, a majority of parents noted higher confidence in helping their child with budgeting their money (55%), managing savings options (52%) and navigating credit cards (41%), as well as understanding debt (32%) and credit scores (32%).
“Parents have to manage countless complex conversations as they prepare a child for adulthood. Finances are certainly top of the list, and with varying levels of confidence depending on the banking topic at hand, international finance is one area where more education is essential,” says Ankita D’Mello, principal product manager at Wise.
“As our lives become increasingly global, whether that’s a child studying abroad or sending money to family and friends in another country, the importance of managing money across borders is only becoming more of a mainstay for parents and their kids.”
Regardless of their confidence levels in different financial topics, 40% of parents surveyed shared concerns their kids will “outgrow” the advice they are equipped to give. It’s why many of those surveyed said they’re interested in learning more about financial topics, including international finance and related areas (19%).
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For parents surveyed who want to learn more about topics related to international finance, it’s because they’re generally interested in it (36%), and they believe it’s important knowledge to have as the world becomes increasingly interconnected (32%). Some want to learn more as either they (30%) or their child (22%) are hoping to travel internationally or because it’s an area of their knowledge they think is lacking (27%).
Whether parents want to learn more about international finance or other topics, one thing is abundantly clear: 72% want to further their financial knowledge to better help their children.
Why this uptick in appetite for financial knowledge? This may be due to the changing nature of how we manage our finances, as nearly three-quarters (74%) of respondents believe it’s become more complicated since they were a child.
When asked why they believe financial management has become more complicated, 48% of these respondents noted the internet makes it easy to search for financial information, but it’s hard to know what to trust.
Ultimately, this hunger for knowledge contributes to a thirst for information, as nearly half of parents surveyed (46%) believe they have more to learn about financial management.
This might be why the vast majority (79%) of parents said they’re open to new tools and resources to help them improve their financial knowledge, and nearly a quarter (22%) actively look for new services to use.
“Parents looking to grow their financial expertise don’t have to go at it alone, especially those who want their kids to listen to them more. Leveraging tools built specifically to solve multifaceted financial problems, like international payments, is a great way to more easily navigate services that are traditionally challenging to understand,” D’Mello says. “With more financial information available now than ever before, it’s essential to work with providers that are established, affordable, convenient and transparent, especially when looking to move money internationally.”
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How confident are parents when helping their children in these areas?
- Budgeting — 55%
- Savings options — 52%
- Credit cards — 41%
- Managing debt — 32%
- Managing credit score — 32%
- Insurance — 29%
- Financing a car — 29%
- Investments — 21%
- Mortgages — 16%
- Retirement planning (Roth vs. traditional IRAs, etc.) — 16%
- High-yield savings accounts — 15%
- Sending money abroad (i.e., sending money to friends or family internationally) — 14%
- Taking out/refinancing loans — 13%
- Currency conversions (i.e., exchanging money when traveling) — 11%
- International finance (i.e., moving or managing money internationally) — 4%
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