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Parents need to teach their children financial literacy
Last reviewed: 01.07.2025
Parents should be role models for their children so that they, in turn, can make independent financial decisions in the future. This is the conclusion reached by scientists from East Carolina University.
The results of the scientists' work were published in the journal "Springer's Journal of Family and Economic Issues".
Money is one of the most important elements of social life. Many factors of our existence revolve around this concept, directly related to financial independence. Growing credit card debts among the younger generation are a concern for researchers, who associate it with financial illiteracy.
Professor Adam Hancock and his colleagues are the first to study parents' behaviour and attitudes towards their children's financial spending.
The researchers analyzed data from 413 students from seven different American universities as part of the Student Financial Literacy Survey. Using an online survey, the researchers analyzed the number of credit card holders, the level of debt young people had, their financial relationships with their parents, their work experience, and their attitudes toward credit.
Overall, almost 2/3 of the students surveyed had credit cards, and almost 1/3 of that number had several. Most young people got a credit card following their parents' example. Girls used credit more often than men and had more than one credit card at their disposal.
Those students who had two or more credit cards were nearly three times more likely to report having debt of more than $500.
"The influence of parents on their children's financial decisions cannot be underestimated. They should help young people navigate the maze of financial transactions, especially when it comes to using credit. This should be done already in adolescence, when the child begins to make independent financial decisions, so that in the future they can effectively and rationally manage their finances thanks to their experience and knowledge," says Professor Hancock.