To help parents and their children alike manage their finances better, Wells Fargo is promoting online budgeting and savings tools available on its website, and releasing the findings of a survey of parents on their children that demonstrate a generational knowledge gap.
Ninety-five percent of parents believe their children will attain their financial goals, but only 5% of young adults between the ages of 18 and 22 are as confident.
Parents and their children also differ on what they believe should be the three top financial goals of a young person, with parents saying find a job, pay off student loans and pay off credit cards, and their children saying their ambitions are to buy a car, find a job and buy a home.
Amazingly, 92% of the young people said that a budget is not effective, but 95% of parents insist that it is.
The survey shows theres a huge knowledge gap between the generations when it comes to money management, and theres a need for more education, said Stephanie Smith, a senior vice president in the internet services group at Wells Fargo.
Understandably, however, parents are more knowledgeable about financial terms than their offspring, with 75% of parents correctly defining a credit score (only 41% of children), 73% of parents understanding annual percentage rates (28% of children), 73% of parents understanding a 401(k) (23% of children), 64% of parents understanding compound interest (31% of children).
Forty-one percent of parents are concerned about the stock market, but only 21% of youth are. Yet both age groups say the economy is forcing them to cut back on spending.
Along with the survey results, Wells Fargo is promoting tools and education it makes available on budgeting and saving, including its Hands on Banking series that teams people of all ages about the basics of responsible money management, including how to create a budget, save and invest, borrow responsibly, buy a home and establish a small business.
Wells Fargo also has online tools, including My Spending Report with Budget Watch, My Savings Plan and the Smarter Credit Center.