6th. Detailed Results / March 2014

(1)

Detailed Results / March 2013

6th

(2)

Financial Behaviors

3 A7tudes and Percep<ons

21 Parent/Child Discussions

29 Teaching/Learning

41 College

45 Respondent Proﬁle

60 Objec<ve and Methodology

62 Appendix – Full Frequencies

64

2

T. Rowe Price 2014 Parents, Kids & Money Survey

N=1,000 (Parents: Total Respondents); N=924 (Kids: Total Respondents)

(3)

3

(4)

Saving vs. Spending

Ø Parents break almost evenly between savers and spenders.

Ø Married respondents are more likely to describe their spouse/partner as a spender than a saver.

Ø Like their parents, the kids are split evenly between savers and spenders.

Would you consider yourself to be more of a saver or a spender?

4

N=1,000 (Parents: Total Respondents); N=795 (Parents: Married); N=924 (Kids: Total Respondents) Figures in this report may not add up to 100% due to rounding

Q 11, 12, 48

10%

42%

36%

13%

Would you consider your spouse to be more of a saver or a spender?

10%

31%

39%

21%

Deﬁnitely a Saver

More of a Saver

More of a Spender

Deﬁnitely a Spender

13%

36%

34%

16%

(5)

5

Saving vs. Spending – By Gender

N=1,000 (Parents: Total Respondents); N=795 (Parents: Married) Q 11, 12

Would you consider your spouse to be more of a saver or a spender?

10% 38% 43% 10% 17% 33% 40% 10%

Deﬁnitely a spender More of a spender More of a saver Deﬁnitely a saver

Male

Female

Ø Men are significantly more likely than women to say that they are definitely a spender.

Ø In general, both men and women are more likely to say that their spouse is a spender.

Ø Women are significantly more likely than men to say that their spouse is definitely a saver.

22% 36% 29% 14% 20% 41% 32% 6%

Deﬁnitely a spender More of a spender More of a saver Deﬁnitely a saver

(6)

Managing Household Finances and Investments

Ø Just about two-thirds of parents say that they are primarily responsible for both the household

day-to-day finances (68%) and the household investments (61%), and the majority of the remainder share responsibility with their spouse/partner.

6 Who is primarily responsible for managing

the day-to-day finances for the household?

68%

9%

23%

I am

My Spouse/Partner

Shared Responsibility

Other

61%

13%

25%

2%

Who is primarily responsible for managing the household investments?

T. Rowe Price 2014 Parents, Kids & Money Survey N=795 (Parents: Married)

Q 13, 14

(7)

7 0% 26% 8% 66% 0% 20% 10% 70% Other Shared responsibility My spouse/partner I am

Male

Female

Ø Men are significantly more likely than women to say that they are responsible for the household

investments.

Ø Women are significantly more likely than men to say that they share responsibility for both

day-to-day finances and the household investments, and they are more likely to say that their spouse/partner manages investments.

2% 34% 21% 43% 1% 17% 4% 77% Other Shared responsibility My spouse/partner I am

Male

Female

Managing Household Finances and Investments –

By Gender

Who is primarily responsible for managing the day-to-day finances for the household?

Who is primarily responsible for managing the household investments?

Q 13, 14

(8)

1%

30%

32%

37%

2%

35%

29%

35%

Other

Mom and Dad

Dad

Mom

2013 2014

8

Kids’ Perceptions of Financial Roles

Ø When asked who is in charge of the family money, kids’ responses break fairly evenly between

mom, dad and both, but they are most likely to seek out mom first when they have a question about money.

Who in your house is in charge of the family money?

T. Rowe Price 2014 Parents, Kids & Money Survey N=924 (Kids: Total Respondents)

Q 43, 44

1%

2%

39%

58%

1%

2%

38%

59%

Other

Other family member

Dad

Mom

2013 2014 When you have a question about money,

to whom do you go first to get answers?

Child

(9)

6%

38% 22% 22% 12%

I only use a debit/credit card I use a debit/credit card most of the <me and occasionally use cash I use cash and debit/credit equally I use cash most of the <me and occasionally use a debit/credit card I only use cash

9

Paying for Purchases

Ø While parents lean toward the use of debit/credit to pay for everyday purchases (66% use

credit/debit as much as, or more frequently, than cash), kids rely primarily on cash to make purchases.

Ø A total of 94% of kids make purchases.

In general, how do you pay for everyday purchases?

N=1,000 (Parents: Total Respondents); N=924 (Kids: Total Respondents) Q 37, 49

6%

2%

0%

1%

2%

4%

8%

12%

65%

I don't buy things

Not sure

Bitcoins

Truﬄes

iTunes balance

Prepaid card

Debit/credit card

GiZ card

Cash

In general, how do you pay for the things you buy?

(10)

17%

25%

19%

39%

I don't have credit cards

I carry over a balance almost every month

I carry over a small balance one or two months per year

I pay them oﬀ in full each month

10

Approach to Credit Card Balances

Ø One in four parents carry over a credit card balance almost every month.

T. Rowe Price 2014 Parents, Kids & Money Survey N=1,000 (Parents: Total Respondents)

Q 17

In general, which of the following best describes how you approach credit card balances?

Parent

(11)

20% 28% 19% 33% 14% 22% 19% 44%

I don't have credit cards

I carry over a balance almost every month

I carry over a small balance one or two months per year

I pay them oﬀ in full each month

Saver

Spender

11

Approach to Credit Card Balances – By Saver vs.

Spender

Q 17, 11

In general, which of the following best describes how you approach credit card balances?

Parent

Ø Twenty-two percent of parents who say that they are savers carry over a credit card balance

almost every month.

Ø Savers are significantly more likely than spenders to say that they pay off their credit cards in

(12)

28%

37%

40%

44%

45%

46%

Ensure that my investments are diversiﬁed

Contribute to, or maintain, an emergency fund

Save throughout the year for holiday shopping

Contribute to charitable causes

Compare the trade-‐oﬀs between spending and saving

Set savings goals

Save for re<rement

Save for a family vaca<on

12

Financial Behaviors

Ø The saving activity reported most by parents is saving for vacation, on par with saving for

retirement, and well above contributing to an emergency fund.

Ø Just over one-third of parents maintain an emergency fund.

Ø Only about one in four parents ensure that their investments are diversified.

Q 18

Which of the following things do you currently do on a regular basis? (Check all that apply)

Parent

(13)

22% 25% 33% 35% 31% 35% 35% 41% 34% 49% 46% 46% 47% 53% 54% 51%

Ensure that my investments are diversiﬁed

Contribute to, or maintain, an emergency fund

Save throughout the year for holiday shopping

Contribute to charitable causes

Compare the trade-‐oﬀs between spending and saving

Set savings goals

Save for re<rement

Save for a family vaca<on

Saver

Spender

13

Financial Behaviors – By Saver vs. Spender

Ø Respondents who consider themselves savers are significantly more likely than spenders to say

that they regularly do all activities listed.

Q 18, 11

Which of the following things do you currently do on a regular basis? (Check all that apply)

Parent

(14)

Financial Activity Frequency

13% 15% 16% 16% 20% 21% 21% 22% 24% 27% 27% 31% 40% 45% 39% 30% 25% 30% 72% 48% 59% 62% 22% 63% 66% 59% 41% 42% 47% 55% 60% 53% 7% 31% 19% 17% 55% 11% 7% 10% 18% 13%

Print bank statements Buy apps or in-‐app purchases Make mobile deposits Make mobile purchases Go into a bank Use automa<c bill pay Cash a check Write a check Use ﬁnancial soZware or apps Use an ATM Shop online Pay bills online Balance your checkbook Review bank statements online

Once a Week or More

Less Than Once a Week

Never

Ø Over half of parents never use mobile devices to make purchases or deposits.

Ø While the vast majority of parents shop and pay bills online, they also still visit banks and use

ATMs.

Ø The majority of parents do not use financial software or apps.

How often do you do each of the following?

14

Q 38

(15)

Kids’ Financial Behaviors

Ø Six of 10 kids shop online.

Ø A total of 54% of kids purchase mobile apps and make in-app purchases, and 41% use a mobile

device to make general purchases.

Ø Nearly three-quarters of kids rarely or never go into a bank, with 42% saying they never do so.

15

Q 56

Child

8% 8% 9% 7% 10% 13% 19% 25% 21% 31% 13% 14% 20% 30% 20% 66% 59% 46% 42% 39%

Use an ATM

Make mobile purchases

Buy mobile apps and in-‐app

purchases

Go into a bank

Shop online

(16)

11%

8%

9%

11%

46%

47%

52%

None of the above Own account to purchase apps Credit card Investment account Mobile phone Bank account Tablet Computer 16

Kids’ Access to Finance and Technology

Ø Just about half of kids have access to a computer, tablet or mobile phone.

Which of the following do any of your kids who are between 8 and 14 have? (Check all that apply)

11%

9%

10%

45%

46%

49%

55%

None of the above Credit card Investment account Own account to purchase apps Bank account Mobile phone Tablet Computer

Which of the following do you have? (Check all that apply)

(17)

11% 9%

22%

57%

Other My kids pay Some<me I do, some<mes they do I pay (parent)

17

Paying for Kids’ Purchases

Ø Parents and kids are in sync for the most part in their perception of who pays for kids’

purchases, although kids are more likely to say they pay (18% vs. 9%). Who pays for the purchases your kids make with their credit

card, mobile device or computer?

N=806 (Parents: Kids Have CC, Computer or Mobile); N=746 (Kids: Have CC, Computer or Mobile) Q 41, 58 4% 6% 48% 23% 18% Don't know Other My parents pay Some<me I do, some<mes they do I pay (kid)

Who pays for the purchases you make with your credit card, mobile device or computer?

(18)

4%

39%

21%

17%

13%

6%

Not sure

Nothing

$1 -‐ $5

$6 -‐ $10

$11 -‐ $20

More than $20

18

App Spending

Ø Parents and kids are very much in sync about how much money kids spend on apps and in-app

purchases.

How much do your kids spend per month on apps and in-app purchases?

N=806 (Parents: Kids Have CC, Computer or Mobile); N=746 (Kids: Have CC, Computer or Mobile) Q 42, 59

4%

38%

21%

17%

14%

6%

Not sure

Nothing

$1 -‐ $5

$6 -‐ $10

$11 -‐ $20

More than $20

How much do you spend per month on apps and in-app purchases?

(19)

Bribing and Borrowing

30%

48%

I some<mes “borrow” money from my kid’s piggy bank

I some<mes use money to bribe my kids to encourage

good behavior

Ø Nearly half of parents use money to bribe their kids to encourage good behavior.

Ø Three out of 10 parents “borrow” money from their kid’s piggy bank.

How much do you agree or disagree with each of the following statements? (Percent Agreeing)

19

Q 26, 39

(20)

Bribing and Borrowing By Saver/Spender & Belief

That Cash Is Obsolete

Ø Parents who are spenders are significantly more likely than those who are savers to bribe their

kids and borrow from their piggy banks.

Ø Parents who say that they think cash is obsolete are also more likely to bribe and borrow from

their kids.

20

Q 26, 39, 11

Parent

20%

39%

53%

70%

I some<mes “borrow” money

from my kid’s piggy bank

I some<mes use money to bribe

my kids to encourage good

behavior

Yes

No

38%

55%

22%

41%

I some<mes “borrow”

money from my kid’s

piggy bank

I some<mes use money

to bribe my kids to

encourage good

behavior

Saver

Spender

Believe Cash is Obsolete

Parent is Saver or Spender

(21)

21

(22)

Parental Concerns

40% 53% 58% 62% 64% 66% 69% 72%

Inves<ng in the wrong things

Taking on too much debt

Being able to pay bills month to month

Saving for my kids' educa<on

Saving enough to be able to re<re

Saving for emergencies

Se7ng a good ﬁnancial example for my kids

The cost of things going up

Ø Over two-thirds of parents are Very/Extremely concerned with setting a good financial example

for their kids.

Ø While 66% of parents are Very/Extremely concerned with saving for emergencies, only 37%

regularly contribute to, or maintain, an emergency fund (Slide #12).

Ø There is relatively little concern with investing in the wrong things.

How concerned are you with each of the following? (Five-point scale – Summary: Top 2 box)

22

Q 16

(23)

Parent Financial Knowledge

12%

28%

23%

39%

33%

25%

18%

5%

14%

3%

Inves<ng

Managing personal ﬁnances

Extremely

Very

Somewhat

Not Very

Not at All

Ø Parents are clearly more comfortable with their knowledge of managing personal finances (67%

Very/Extremely) than their knowledge of investing (35% Very/Extremely). How knowledgeable are you about each of the following?

23

Q 10

(24)

Parent Financial Knowledge – By How Well They Were

Taught

Ø Parents who feel that their parents did a good job of teaching them about money have

significantly higher opinions of their knowledge of finances and investing. How knowledgeable are you about each of the following?

(Five point scale – Summary top 2 box)

24

Q 10, 26

Parent

21% 59% 44% 73%

Inves<ng

Managing personal ﬁnances

Agree

Disagree

My parents did a good job teaching me about money

(25)

1%

9%

49%

30%

11%

Not at all

Not very

Somewhat

Very

Extremely

25

Knowledge of Money

Ø The majority of kids (59%) feel that they could be smarter about money.

Ø Kids’ perception of their parents’ knowledge about money is higher, mapping fairly closely to

parents’ perception about their own knowledge of personal finances. Overall, how smart are you about money?

Q 47, 50

0%

4%

25%

46%

25%

Not at all

Not very

Somewhat

Very

Extremely

Overall, how smart are your parents about money?

Child

(26)

Parent’s Financial Aptitude

67% 70% 71% 76% 95%

I understand what asset alloca<on means I understand how to invest money I understand what it means to beat infla<on I understand what diversifica<on means I understand the importance of saving to reach financial goals

Ø Parents have little doubt about understanding the importance of saving.

Ø Results here indicate that parents are more knowledgeable about investing topics than they

indicated previously (Slide #23).

26

Q 19

(27)

Perceptions About Currency

28%

43%

73%

74%

Cash is obsolete

My kids would rather have a giZ card or online credit

than cash

Because transac<ons are oZen digital, my kids think of

currency in a much diﬀerent way than I did growing up

My kids understand the value of a dollar

Ø The majority of parents feel that their kids understand the value of a dollar, but also agree that

because of technology, kids today think of currency in a much different than they did growing up.

Ø While kids generally pay for purchases with cash, nearly half would prefer to have gift cards or

online credit.

Ø More than a quarter of parents feel that cash is obsolete.

27

Q 26, 39

(28)

Kids’ Perception of How Much Things Cost

2% 2% 3% 4% 26% 62% 4% 3% 5% 21% 46% 22% 4% 2% 12% 58% 16% 7% 5% 5% 69% 10% 7% 4% 25% 60% 6% 4% 3% 2% 60% 28% 5% 2% 2% 3%

Family dinner out Bicycle Vaca<on Car Four year college educa<on House

1 (Most)

2

3

4

5 6 (Least)

Ø Kids’ perception of how much things cost appears to be on track.

Ø One in four kids believe that a four-year college education costs more than a house.

Please rank each of the following in terms of which costs the most money?

28

Q 62

(29)

29

(30)

Discussions With Spouse/Partner

19%

20%

25%

29%

50%

37%

42%

49%

40%

37%

28% 25% 18% 21% 10% 16% 13% 8% 10% 3%

Investment planning

Re<rement

Long-‐term ﬁnancial goals

Saving for kids' educa<on

Monthly spending/budget

Frequently

Occasionally

Rarely

Never

Ø Discussions with a spouse/partner most often center around budgets and monthly spending.

Ø Roughly three-quarters of couples discuss long-term financial goals at least occasionally, and

just over two-thirds discuss saving for kids’ education occasionally or frequently.

Ø Sixteen percent of couples never discuss investment planning, and 13% never discuss

retirement.

How often do you and your spouse/partner discuss each of the following?

30

Q 15

(31)

67% 71% 72% 72% 74% 78%

Exercise

Healthy diet

Sex

Money and ﬁnances

Bullying

Alcohol and drugs

31

Planning Discussions with Children

Ø The majority of couples have agreed on a plan to discuss all relevant topics with their kids.

Ø About one-third of parents think it’s never too early to start teaching kids about money.

Ø One in four tie educating kids about money to when they start getting an allowance.

For which of the following have you and your spouse/partner agreed on a plan to discuss with your children?

(Check all that apply)

N=795 (Parents: Married); N=1,000 (Parents: Total Respondents) Q 21, 24 6% 9% 13% 14% 25% 32%

When they start to go to school When they know how to count When they show an interest When they start to earn their own money When they start to get an allowance It's never too early to start

When do you think it’s appropriate to start teaching children about financial matters?

(32)

Importance of Parent/Child Discussions

46% 50% 46% 47% 63% 50% 68% 73% 77% 85%

The family ﬁnances

Saving for college

Se7ng ﬁnancial goals

Budge<ng

The importance of saving and spending wisely

Parents

Kids

How important do you think it is to discuss each of the following financial topics with your children/parents?

(Five-point scale – Summary: Top 2 box)

32

Parent and Child

Ø Parents ascribe significantly more importance than kids to all topics other than family finances.

Ø While parents show more variability in importance level, the priority of discussions is similar for

parents and kids, except that kids rate saving for college as a higher priority than parents (second overall, compared to fourth).

(33)

Frequency of Parent/Child Discussions

47% 60% 54% 61% 79% 56% 67% 69% 75% 88%

The family ﬁnances

Saving for college

Se7ng ﬁnancial goals

Budge<ng

The importance of saving and spending wisely

Parents

Kids

How often do you discuss each of the following financial topics with your children/parents?

(Four-point scale – Summary: Top 2 box)

33

Parent & Child

Ø While not as dramatic as the differences in importance, parents generally report having more

frequent discussions than the kids report for all topics.

(34)

Importance vs. Frequency of Discussions – Parents

38% 56% 67% 69% 75% 88% 39% 50% 68% 73% 77% 85%

Investment vehicles such as stocks, bonds, mutual funds, etc. The family ﬁnances Saving for college Se7ng ﬁnancial goals Budge<ng The importance of saving and spending wisely

How Important to Discuss How OZen Do You Discuss How important do you think it is to discuss each of the following financial topics with your children?

How often do you discuss each of the following financial topics with your children? (Four-point scale – Summary: Top 2 box)

34

Q 22, 25

Parent

Ø Parents are very consistent in terms of how important they say topics are and how often they

(35)

Importance vs. Frequency of Discussions – Kids

36% 47% 54% 61% 60% 79% 39% 31% 46% 47% 50% 63%

Financial topics like interest rates, credit, inves<ng, etc. The family ﬁnances Se7ng ﬁnancial goals Budge<ng Saving for college The importance of saving and spending wisely

How Important to Discuss How OZen Do You Discuss How important do you think it is to discuss each of the following financial topics with your parents?

How often do you discuss each of the following financial topics with your parents? (Four-point scale – Summary: Top 2 box)

35

Q 45, 51

Child

Ø From the kids’ point of view, discussions are generally occurring more frequently than necessary,

(36)

Frequency of Parent/Grandparent Discussions

56% 67% 69% 75% 88% 41% 44% 48% 54% 68%

The family ﬁnances

Saving for college

Se7ng ﬁnancial goals

Budge<ng

The importance of saving and spending wisely

Your Parents (Grandparents)

Your Kids

How often did/do you discuss each of the following financial topics with your parents (grandparents)/your children?

(Four point scale – Summary: Top 2 box)

36

Q 20, 25

Parent

Ø Parents discuss financial topics with their kids significantly more often than their parents did

(37)

26% 8% 19% 20% 30% 42%

None of the above It's none of their business I worry they would share sensi<ve family informa<on with others I would rather discuss other more important things with them They're too young to understand I don't want them to worry about ﬁnancial maoers

37

Reluctance to Discuss Financial Topics

Ø A total of 74% of parents have some reluctance to discuss financial topics with their kids.

Are you reluctant to discuss financial topics with your children for any of the following reasons? (Check all that apply.)

Q 23

(38)

Child-Initiated Discussions

11% 13% 19% 29% 37% 34% 31% 36% 45% 49% 33% 28% 23% 16% 10% 23% 28% 22% 10% 4%

Family ﬁnances

Saving for college

Where money comes from

Allowance

How much things cost

Frequently

Occasionally

Rarely

Never

Ø When kids initiate discussions, they are most often about how much things cost or their

allowance.

Ø Nearly three-quarters of kids initiate a discussion about saving for college.

How often do your kids ask about each of the following?

38

Q 27

(39)

Discussing Money With Kids

28%

42%

64%

I some<mes lie to my kids about money

I some<mes avoid talking to my kids about money

I think it’s important to include children in

discussions regarding the family ﬁnances

Ø While just about two-thirds of parents say it’s important to include kids in financial discussions,

nearly half also say that they sometimes avoid talking with kids about money.

Ø Just over one-quarter of parents say that they sometimes lie to their kids about money.

39

Q 26

(40)

15% 24% 31% 28% 40% 35% 35% 62% 20% 30% 33% 35% 41% 42% 44% 69%

A speciﬁc plan to save enough for college How you/your parents paid for college How you’re going to pay for college The diﬀerent types of schools and associated costs How much college is going to cost Applying for scholarships How important it is to save for college Why going to college is important

Parents

Kids

40

Discussing College

Ø In general, parents report having college-related discussions slightly more frequently than kids

report having discussions.

Ø The most frequent discussions concern the importance of going to college, and then the focus

shifts to saving/paying for college.

Which of the following topics have you discussed with your children/parents? (Check all that apply)

N=995 (Parents: Plan to Send Kids to College); N=924 (Kids: Total Respondents) Q 36, 54

(41)

41

(42)

Teaching Kids About Money

78% 83% 84% 86% 87%

When teaching kids about finances, I typically talk about concepts like paychecks, banks, cash, etc. Games are a good way to teach kids about money I feel like I have enough knowledge to teach my kids about financial maoers My spouse/partner and I agree on how we should be teaching our kids about financial maoers I think it’s appropriate for kids to learn about financial maoers in school

Ø Nearly nine out of 10 parents think it’s okay for schools to teach kids about money.

42

Q 26, 39

(43)

Teaching Kids About Money (Continued)

28% 38% 61% 69% 77%

I’m not good with money, so I don’t think I should be the one teaching my kids about financial maoers When teaching my children about finances, I typically use digital and online tools and programs My parents did a good job teaching me about money I teach my kids about the difference between using a debit card and a credit card I use my kids’ allowance as a way to teach them about money

Ø Just over three-quarters of parents agree that an allowance offers a good opportunity to teach

kids about money.

Ø Despite advances in technology and shifting ways of managing money, only 38% of parents use

digital and online tools to teach kids about money.

43

Q 26, 39

(44)

Money Games

Ø Over two-thirds of kids have played games involving money, and the majority say that board

games, video games and online games that involve money help them understand how to save and spend wisely.

Have you ever played a game involving money where you had to save your money or

be careful about how you spend it?

44

68%

32%

Yes

No

N=924 (Kids: Total Respondents); N=630 (Kids: Played Money Game) Q 60, 61

How much do you agree or disagree with each of the following statements?

(Percent Agreeing)

(N=630 who have played a game)

66% 66%

85%

An online game about money maoers has helped me understand how save and spend money wisely A video game about money maoers has helped me understand how to save and spend money wisely A board game about money maoers has helped me understand how to save and spend money wisely

Child

(45)

45

(46)

5%

4%

20%

26%

45%

6%

4%

7%

14%

68%

Yes

No

6%

4%

16%

22%

52%

I deﬁnitely won't go

I probably won't go

I might go

I probably will go

I deﬁnitely will go

46

Kids’ College Intentions

Ø The majority of kids think they are likely to go to college, with only 10% saying they probably/

definitely won’t go.

Ø Kids are significantly more likely to say they will definitely go to college if their parents are currently

saving for their college education.

Do you think you will go to college?

Q 46, 28, 53

Child

6%

5%

24%

26%

38%

5%

4%

8%

18%

65%

Yes

No

Parents Are Saving

for College

Kids Are Saving for College

(47)

47

Kids’ College Intentions

Do you think you will go to college?

Q 46, 52, 51

Child

6% 3% 23% 28% 40% 6% 10% 25% 25% 35% 5% 3% 7% 17% 67%

I deﬁnitely won't go

I probably won't go

I might go

I probably will go

I deﬁnitely will go

Yes

No

Don't Know

Kids Think Parents Are Saving for College

5%

4%

20%

25%

46%

7%

4%

2%

12%

74%

I deﬁnitely won't go

I probably won't go

I might go

I probably will go

I deﬁnitely will go

Yes

No

Kids Frequently Discuss Saving for College With Parents

(48)

Saving for College

Ø Just over half of parents say that they regularly set aside money for college, and those who do are

split almost evenly between those who put aside money when they can and those who have specific goals and a plan to reach them.

Ø While 51% of parents regularly save for college, and a total of 23% overall have developed a plan

to reach college savings goals:

•  62% are very/extremely concerned about saving for their kids education (Slide #22)

•  69% occasionally/frequently discuss saving for college with their spouse/partner (Slide #30)

•  68% say that it’s very/extremely important to discuss saving for college with kids (Slide #32)

•  67% say that they occasionally/frequently discuss saving for college with their kids (Slide #33)

Do you regularly set aside money for college savings?

48

N=1,000 (Parents: Total Respondents); N=506 (Parents: Regularly Save for College) Q 28, 29

51%

49%

No

_Yes

Which of the following best describes your general approach when it comes to saving for college?

46%

54%

I have set speciﬁc goals

and developed a plan to

reach those goals

I try to put money aside

when I can, but I don’t

have a speciﬁc plan

Parent

(49)

Saving for College

Ø Over one-third of kids are not aware if their parents are saving for their college education.

Do your parents regularly save money so that you can go to college?

49

48%

14%

38%

Yes

No

Q 52, 53

Don’t

Know

Do you regularly save

money so that you can go to college?

32%

68%

Yes

No

Child

(50)

1% 3% 6% 8% 9% 11% 16% 18% 21% 70%

My kids are not going to go to college I already have enough saved to pay for college Other family members will pay for college I’ll never be able to save enough, so it’s pointless to try It is more important to save for other things It’s so overwhelming that I don’t know where to start We will rely on student loans I plan to start saving for college later I’m coun<ng on scholarships to pay for college I can’t aﬀord to

50

Reasons for Not Saving for College

Ø By far, the primary reason given by parents for not saving for college is that they can’t afford to.

Why don’t you regularly set aside money for college savings? (Check all that apply.)

T. Rowe Price 2014 Parents, Kids & Money Survey N=494 (Parents: Don’t Save for College)

Q 30

(51)

4% 4% 6% 14% 17% 17% 23% 34% 44% CS213 account* UBO-‐67 account* UGMA or UTMA account IRA (Roth or Tradi<onal) Checking account 401(k) account Investment account 529 account Regular savings account

51

Appropriate Accounts for College Savings

Ø Forty-four percent of parents say that a regular savings account is best for college savings.

*UBO-67 and CS213 are fictitious accounts included to determine general knowledge of college savings options.

What types of accounts do you think are best to use for college savings? (Check all that apply.)

T. Rowe Price 2014 Parents, Kids & Money Survey N=995 (Parents: Plan to Send Kids to College) Q 31

Parent

(52)

0% 2% 0% 5% 20% 7% 4% 14% 29% 4% 3% 6% 14% 17% 14% 24% 35% 45% CS213 account* UBO-‐67 account* UGMA or UTMA account IRA (Roth or Tradi<onal) Checking account 401(k) account Investment account 529 account Regular savings account

Agree

Disagree

52

Appropriate Accounts for College Savings – By

Understanding Importance of Saving

Ø Parents who say that they understand the importance of saving to reach financial goals are

significantly more likely to say regular savings, 529 account, investment account, 401(k) and IRA.

What types of accounts do you think are best to use for college savings? (Check all that apply)

T. Rowe Price 2014 Parents, Kids & Money Survey N=995 (Parents: Plan to Send Kids to College) Q 31, 19

Parent

I understand the importance of saving to reach financial goals

(53)

1% 1% 1% 8% 10% 9% 11% 24% 39% 5% 5% 8% 15% 20% 20% 28% 38% 47% CS213 account* UBO-‐67 account* UGMA or UTMA account IRA (Roth or Tradi<onal) Checking account 401(k) account Investment account 529 account Regular savings account

Agree

Disagree

53

Appropriate Accounts for College Savings – By

Understanding How to Invest

Ø Parents who say that they understand how to invest money are significantly more likely to say

every type of account.

What types of accounts do you think are best to use for college savings? (Check all that apply.)

Parent

(54)

10%

30% 31% 17%

12%

I don’t plan to save anything for college I will only be able to save a frac<on of what college will cost I will be able to save enough to pay for some of the cost of college I will be able to save enough to pay for most of the cost of college I will be able to save enough to pay for the en<re cost of college

54

Expectations About Paying for College

Ø A total of 29% of parents believe that they will be able to save enough to pay for most or all of

their kids’ college education.

Which of the following best describes how you feel about saving for your children’s college education?

(55)

18% 28% 32% 14% 8% 5% 32% 30% 19% 14%

I don’t plan to save anything for college I will only be able to save a frac<on of what college will cost I will be able to save enough to pay for some of the cost of college I will be able to save enough to pay for most of the cost of college I will be able to save enough to pay for the en<re cost of college

Very or Extremely Concerned Somewhat or Less Concerned

55

Expectations About Paying for College – By Concern

About College Savings

Ø Parents who are very/extremely concerned about saving for college are significantly more likely

to say that they will be able to save most or all of the entire cost of college.

Which of the following best describes how you feel about saving for your children’s college education?

(56)

8%

39%

34%

19%

None

Some

Most

All

56

Kids’ Expectations About Paying for College

Ø There is disparity between parents’ and kids’ expectations – while 29% of parents say that they

will save for most/all of their kids’ college education, 53% of kids expect them to pay for most/ all of it.

How much of the cost for your college education do you expect your parents to pay for?

Q 55

(57)

7% 8% 9% 10% 14% 28% 44% 46% 58% 60%

Home equity loan/second mortgage

Take money from re<rement accounts

Credit cards

Other family members

Personal loan or line of credit

Through regular income

Kids will work

Grants

Student loans

Scholarships

57

Covering the Cost of College

Ø  Those parents who don’t think that they will be able to cover the entire cost of college plan to

rely primarily on scholarships, student loans and grants.

Ø  Nearly half of parents expect their kids to work to help pay for college.

Ø  Parents appear reluctant to take on personal debt to pay for their kids college education.

How do you plan to cover the remaining cost for college? (Check all that apply.)

N=881 (Parents: Plan to Send Kids to College, Can’t Cover Entire Cost) Q 33

(58)

6%

3%

9%

3%

17%

6%

14%

17%

18%

4%

91-‐100%

81-‐90%

71-‐80%

61-‐70%

51-‐60%

41-‐50%

31-‐40%

21-‐30%

11-‐20%

1-‐10%

0%

58

Grants and Scholarships

Ø Almost one in four parents believe that more than 50% of their kids’ college education will be

covered by grants and scholarships.

What percent of your children’s college education do you think will be covered by grants and scholarships?

Parent

(59)

28% 48%

77%

I’m so concerned about paying for college that I lose sleep at night It’s more important to save for re<rement than to save for kids’ educa<on I expect my kids to pay for some of their college educa<on

59

Parent

Beliefs About College Savings

T. Rowe Price 2014 Parents, Kids & Money Survey N=995 (Parents: Plan to Send Kids to College) Q35

Ø More than one-quarter of parents are lose sleep worrying about how to pay for college.

(60)

60

(61)

Parent Age

18-29 8% 30-39 37% 40-49 36% 50-59 15% 60 or older 5%

Gender

Male 50% Female 50% 61

Respondent Profile

Marital Status

Single, never married 9%

Married/domestic

partnership/living with

partner 80%

Separated/divorced 9%

Widow/Widower 2%

Prefer not to answer <1%

N=1,000 (Parents: Total Respondents); N=924 (Kids: Total Respondents)

Region

Northeast 20% Midwest 24% South 27% West 29%

Annual Household

Income

Under $30,000 17% $30,000-$64,999 32% $65,000-$105,999 29% $106,000 or more 20%

Prefer not to answer 2%

Kid Age

8-10 35%

11-12 30%

(62)

62

(63)

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 January 29–31, 2014, with parent quotas of at least

50% men and 50% women.

• A total of 1,000 parents and 924 children ages 8-14 in the U.S. participated; the

sampling error for a sample of 1,000 is +/- 3.1% at the 95% confidence interval.

• The survey was fielded through MarketTools, Inc.

T. Rowe Price and MarketTools, Inc., are not affiliated companies.

63

(64)

64

(65)

Parental Concerns

17% 25% 32% 28% 31% 28% 30% 38% 23% 28% 26% 34% 33% 38% 39% 34% 26% 24% 24% 27% 25% 25% 22% 22% 22% 14% 12% 8% 7% 6% 6% 4% 12% 8% 6% 3% 4% 3% 3% 1%

Inves<ng in the wrong things

Taking on too much debt

Being able to pay bills month to month

Saving for my kids' educa<on

Saving enough to be able to re<re

Saving for emergencies

Se7ng a good ﬁnancial example for my kids

The cost of things going up

Extremely

Very

Somewhat

Not Very

Not at All

How concerned are you with each of the following?

65

Q 16

(66)

Parents’ Financial Aptitude

27%

25%

26%

34%

53%

40%

45%

42%

19%

20%

14%

4%

13%

10%

9%

10%

2%

I understand what asset alloca<on means

I understand how to invest money

I understand what it means to beat inﬂa<on

I understand what diversiﬁca<on means

I understand the importance of saving to reach

ﬁnancial goals

Strongly Agree

Somewhat Agree

Somewhat Disagree

Strongly Disagree

66

Q 19

(67)

Parents Discussions With Their Parents

13%

17%

19%

18%

22%

33%

23%

24%

25%

30%

32%

35%

23%

24%

20%

22%

20%

15%

41%

35%

36%

31%

26%

17%

Financial topics like interest rates, credit, inves<ng, etc.

The family ﬁnances

Saving for college

Se7ng ﬁnancial goals

Budge<ng

The importance of saving money

Frequently

Occasionally

Rarely

Never

How often did your parents discuss each of the following topics with you when you were a child between age 8 and 14?

67

Q 20

(68)

Importance of Parent/Child Discussions

17% 22% 33% 33% 38% 47% 22% 28% 35% 40% 39% 38% 34% 33% 24% 22% 19% 13% 16% 11% 5% 3% 2% 1% 10% 6% 3% 2% 2% 1%

Investment vehicles such as stocks, bonds,

mutual funds, etc.

The family ﬁnances

Saving for college

Se7ng ﬁnancial goals

Budge<ng

The importance of saving and spending wisely

Extremely

Very

Somewhat

Not Very

Not at All

How important do you think it is to discuss each of the following financial topics with your children?

68

Q 22

(69)

Frequency of Parent/Child Discussions

11% 15% 25% 23% 28% 43% 27% 41% 42% 46% 47% 45% 26% 27% 20% 21% 16% 8% 36% 17% 13% 10% 8% 4%

Investment vehicles such as stocks, bonds, mutual funds, etc.

The family ﬁnances

Saving for college

Se7ng ﬁnancial goals

Budge<ng

The importance of saving and spending wisely

Frequently

Occasionally

Rarely

Never

How often do you discuss each of the following financial topics with your children?

69

Q 25

(70)

Parent/Child Discussions

19%

31%

32%

34%

37%

45%

46%

52%

50%

24%

13%

11%

10%

12%

9%

5%

3%

I think it’s important to include children in

discussions regarding the family ﬁnances

I use my kids’ allowance as a way to teach them

about money

I feel like I have enough knowledge to teach my kids

about ﬁnancial maoers

My spouse/partner and I agree on how we should be

teaching our kids about ﬁnancial maoers

I think it’s appropriate for kids to learn about

ﬁnancial maoers in school

Strongly Agree

Somewhat Agree

Somewhat Disagree

Strongly Disagree

70

Q 26

(71)

Parent/Child Discussions (Continued)

9%

10%

9%

10%

24%

19%

18%

21%

32%

37%

23%

27%

16%

31%

21%

49%

45%

55%

27%

19%

I some<mes lie to my kids about money

I’m not good with money, so I don’t think that I

should be the one teaching my kids about ﬁnancial

I some<mes “borrow” money from my kid’s piggy

bank

I some<mes avoid talking to my kids about money

My parents did a good job teaching me about money

Strongly Agree

Somewhat Agree

Somewhat Disagree

Strongly Disagree

71

Q 26

(72)

Beliefs About College Savings

10%

16%

28%

18%

32%

49%

28%

34%

14%

44%

19%

9%

I’m so concerned about paying for college that I lose sleep at night It’s more important to save for re<rement than to save for kids’ educa<on I expect my kids to pay for some of their college educa<on

Strongly Agree

Somewhat Agree

Somewhat Disagree

Strongly Disagree

72

(73)

Financial Activity Frequency

2% 4% 4% 4% 3% 4% 4% 4% 7% 4% 4% 5% 11% 11% 5% 6% 6% 6% 7% 6% 8% 8% 8% 11% 11% 12% 14% 15% 6% 5% 6% 6% 10% 11% 9% 10% 9% 12% 12% 14% 15% 19% 7% 8% 9% 11% 24% 19% 22% 30% 10% 24% 30% 37% 13% 19% 14% 7% 8% 6% 19% 15% 20% 14% 6% 20% 13% 18% 21% 18% 18% 15% 8% 13% 29% 25% 6% 18% 6% 22% 20% 4% 7% 5% 47% 55% 60% 53% 7% 19% 31% 17% 55% 7% 11% 10% 18% 13%