Your Parents Think You Stink at Managing Your Money «
No matter how old you are, you can always count on mom and dad to let you know when you’re doing something wrong. A recent study from Fidelity tapped into that sentiment, asking parents how they think their adult children are doing at handling their finances.
As you might expect, parents didn’t hold back with their criticism:
•42 percent of parents said that their adult children have too much credit card debt.
•38 percent cited their kids’ failure to save for retirement early enough.
•36 percent of parents listed not having a big enough emergency fund as a major financial error of their offspring.
Perhaps surprisingly, adult children were less likely to find fault in their parents’ financial behavior.
Almost half of those surveyed said that their parents hadn’t made any major financial mistakes. Among those who did have criticisms, though, most of the comments centered around retirement planning, with 24 percent saying that their parents waited too long to start saving for their golden years, and 22 percent believing that their parents hadn’t used the best accounts to save, such as IRAs and other tax-favored retirement vehicles.
Who’s Going to Pay for This?
Where parents and adult children disagree most, though, is on sensitive topics like inheritance and health care.
The Fidelity study found that 97 percent of parents and children disagreed about whether children will take care of their parents if they become ill. Moreover, although nearly all parents believe they won’t need financial help in retirement, nearly a quarter of adult children expect to have to help out their parents.
The root of these disagreements likely comes from the different priorities parents and adult children have to address. For adult children, finding the money to save for retirement, pay off mortgages, and finance kids’ college educations were all substantial concerns. But nearly a third of parents of adult children cited no financial issues at all, with many of the rest focusing on their grandchildren’s educations. Only 38 percent said they see saving for retirement as a major concern.
Parents will always have advice to give, but it’s more important for you to feel comfortable with the financial path you’re taking, and to address any mistakes that could reduce your financial security. In that ongoing effort, knowledge is half the battle — even if some of it comes in the form of an “I told you so” from Mom and Dad.