How Parents Dig a Money Hole for Kids Without Knowing it

Parents want the most for their children. But when it comes financial know-how, Mom and Dad may be getting in the way. In fact, new research suggests that parents could be the biggest stumbling block facing educators as they try to teach responsible money behavior in the classroom.

“What kids learn about money in class is often negated by the behavior of the parents at home,” says Shannon Schuyler, U.S. corporate responsibility leader at PwC, the business services firm that sponsored the research. “That doesn’t happen in other subjects.”

So Sally might sit through a lesson on the high cost of payday lenders only to have Mom stop at a pawnshop on the way home. Or Joey’s teacher might give him an earful on the dangers of impulse spending, which goes out the window when Dad pulls a sudden u-turn to buy a snowmobile for sale on the side of the road. Or more likely, kids just see their parents’ everyday credit-card culture, or their habit of upgrading mobile devices with every new release.

You get the idea. It doesn’t matter what a teacher says about budgets, saving, and compound returns if a child goes home and sees behavior that not only fails to reinforce the lesson but also may contradict it. For this reason, 68% of K-12 teachers polled said they believe any financial lessons at school must include a take-home component to be shared with parents. The idea is to reach adults through the kids.

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Another problem that teachers cite: Parents don’t place a high priority on money management as an important life skill. Some 62% say financial education is not seen as critical for college and career readiness. “This is just amazing,” Schuyler says. “Student debt keeps many of these kids from having the life they want.” Nearly three in four college graduates have student loans outstanding, averaging about $35,000.

Of course, we can’t put all the blame on parents. Nine in 10 educators believe financial education should be part of the curriculum, yet that's the case at only 12% of schools, the PwC survey found. Only 17 states require any personal finance instruction to graduate from high school, according to the Council for Economic Education’s latest survey of the states.

That borders on immoral, given the changing economic landscape and heightened need for young people to manage debt and start saving early. One excuse: only one in three teachers is comfortable teaching kids about money. So teaching the teachers must be part of the solution—and two-thirds of teachers polled say they would welcome professional development in this area.

Still, no matter how well schooled a student may be in late fees and interest rates, the most valuable lessons are those that come at home and focus on behavior—making smart choices about consumption, separating wants from needs, and keeping long-range goals in mind.

Young people today are entering a financial world unlike anything many of their parents fully appreciate. New employee benefits choices are emerging, like student loan assistance and interim pay based on hours logged. Apps, robo-advisers, bitcoin and blockchain technology are upending the financial infrastructure. In the end, what we teach kids now about checking accounts and debit cards may be obsolete before they have utility. But smart decisions about money—the kind teachers fear kids are not being exposed to at home—never go out of style.