BALTIMORE, Nov. 12, 2015 /PRNewswire/ -- T. Rowe Price's
2015 Parents, Kids & Money Survey, which sampled 1,000
parents nationally of 8 to 14 year olds in January 2015, revealed that 62% of parents agree
with the statement, "I spent more for my kids over the holidays
than I should have." While most parents use their current income
(56%) and credit cards (47%) to cover holiday spending, a
surprising percentage have also tapped their retirement savings
(7%) and their emergency fund (9%).
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Stuart Ritter, CFP®, a
senior financial planner at T. Rowe Price, says, "It's always
tempting to splurge around the holidays, but parents aren't doing
themselves or their kids any favors by overspending. We're all
inclined to be more generous this time of year, and it's important
to be mindful of the financial trade-offs we're making and stick to
a budget that aligns with our priorities.
"Our long-term goals, such as retirement savings and having an
emergency fund, should always take priority over anything that is
presented with a bow and purchased during a Black Friday sale. Kids
will always have long wish lists, and it's good for them to know
that there isn't enough money in the family budget to cover
everything. Challenging them to prioritize their wants and make
trade-offs is essential to helping them develop critical financial
capabilities."
T. Rowe Price encourages parents to invest in their kids'
futures by talking to them about money matters weekly. To help, the
firm created MoneyConfidentKids.com, which provides free online
games for kids, lessons for educators, and tips for parents,
focused on financial concepts such as goal setting, spending versus
saving, inflation, asset allocation, and investment
diversification.
SURVEY FINDINGS
- Some parents save for the holidays: Over a third of
parents (36%) save for the holidays throughout the year.
- And most overspend on the holidays: 62% of parents agree
with the statement, "I spent more for my kids over the holidays
than I should have."
- Parents who overspend on holiday purchases are more likely
to argue: 50% of the parents who overspent on the holidays
argue about money with their spouse, while only 27% of parents who
did not overspend argue about money with their spouse.
- A minority of parents have used retirement savings and
emergency fund: 7% of parents have tapped their retirement
savings to pay for holiday purchases, and 9% have used their
emergency funds.
- Holiday spending prioritization: Some parents are
prioritizing holiday savings over saving for long-term goals.
- Nearly a third (30%) of parents who do not regularly save for
retirement do save regularly for holiday spending.
- Over a quarter (28%) of parents who do not regularly save for
their kid's college education do save regularly for holiday
spending.
- 62% of parents who feel they set a good financial example for
their kids don't save for holiday spending throughout the
year.
- Moms have better holiday saving habits than dads: Moms
are more likely to save for holiday spending throughout the year,
while dads are more likely to use inappropriate funds when it comes
to paying for holiday spending.
- 40% of moms said that they save for the holiday season
throughout the year compared with 32% of dads.
- 11% of dads said that they used an emergency fund during the
holidays compared with 6% of moms.
- 11% of dads have used retirement savings to pay for the
holidays compared with only 3% of moms.
ABOUT THE SURVEY
The seventh annual T. Rowe Price Parents, Kids & Money
Survey, conducted by MarketTools, Inc., aimed to understand the
basic financial knowledge, attitudes, and behaviors of both parents
of kids ages 8–14 and their kids ages 8–14. The survey was fielded
from January 20, 2015, through
January 27, 2015, with a sample size
of 1,000 parents and 881 kids ages 8–14. The margin of error is +/-
3.1 percentage points. All statistical testing done among subgroups
(e.g., boys versus girls) is conducted at the 95% confidence level.
Reporting includes only findings that are statistically significant
at this level.
ABOUT T. ROWE PRICE
Founded in 1937, Baltimore-based
T. Rowe Price (NASDAQ-GS: TROW) is a global investment management
organization with $725.5 billion in
assets under management as of September 30,
2015. The organization provides a broad array of mutual
funds, subadvisory services, and separate account management for
individual and institutional investors, retirement plans, and
financial intermediaries. The company also offers a variety of
sophisticated investment planning and guidance tools. T. Rowe
Price's disciplined, risk-aware investment approach focuses on
diversification, style consistency, and fundamental research. For
more information, visit troweprice.com or our Twitter, YouTube,
LinkedIn, and Facebook sites.
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SOURCE T. Rowe Price Group, Inc.