Survey: Generation gap divides parents and children over money
It is the 40th anniversary of the summer of love, so perhaps it is fitting, if not cool, that a generation gap over their view of money divides parents from their young-adult children.
It is the 40th anniversary of the summer of love, so perhaps it is fitting, if not cool, that a generation gap over their view of money divides parents from their young-adult children.
For instance, according to a study released today by Wells Fargo & Co. of San Francisco, 95% of parents felt confident that their children would attain their financial goals; only 5% of the young adults — those 18 to 22 — expressed the same level of confidence.
Asked to rank their top three financial priorities for their children, 87% chose “find a job,” 44% chose “pay off student loans,” and 38% chose “pay off debt.” In contrast, 50% of young adults chose “buy a car,” 46% chose “find a job,” and 38% chose “buy a house.”
In addition, 92% of parents considered household budgets effective, but 95% of young adults did not.
A full 73% of parents said they understood how a 401(k) plan worked, compared with just 23% of young adults. Fully 64% of parents said they understood what compound interest was, compared with only 31% of young adults.
Both groups recognized the need to cut back on spending and to manage their money better because of the weak economy, the survey found.
Fully 81% of parents and 71% of young adults said they were paying more attention to how they spent money. In addition, the economy forced 79% of parents and 61% of young adults to trim expenses.
The survey included 1,000 parents of college-age children and 600 young adults who were Wells Fargo customers. The online survey was conducted during April and May.
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