A new survey from U.S. Bank reveals a stark concern among parents about their children’s financial independence. Nearly one in four parents and more than half of Gen X parents worry their children will remain financially dependent on them well into adulthood. This concern comes amid a broader trend of parents engaging in more in-depth financial discussions with their children than previous generations did.
These conversations cover crucial topics like investing in stocks and bonds and choosing career paths aligned with their financial goals. However, despite these open dialogues, parents still shy away from discussing their personal financial situations with their children, potentially due to fears of judgment or embarrassment. “For many people, discussing money is extremely uncomfortable; this is especially true with families,” said Scott Ford, president of Wealth Management at U.S. Bank.
Most Americans prefer to talk about their political preferences rather than their finances. About 68% are more comfortable discussing their presidential choice than their personal finances. While 79% of parents are confident their children can manage their finances, 37% still worry about their kids needing financial assistance into adulthood.
More than a third of Americans disagree with their partners on financial management. Additionally, 31% say they are unaware of their partner’s financial situation, and 36% of unmarried Americans are embarrassed to discuss their finances openly with their partners.
Parents’ financial worries and discussions
There’s a notable discomfort among Gen Zers and Millennials when discussing finances with their parents compared to older generations. The survey indicates that today’s parents are almost twice as likely to discuss investing in stocks and bonds with their children (44%) compared to their own parents (24%). Moreover, 65% of parents are having conversations with their children about choosing career paths that align with financial goals, compared to only 41% who recall having such discussions with their own parents.
Despite these educational efforts, less than half (44%) of Americans seek financial advice from their parents, with women more likely to do so than men. Additionally, many parents believe their children will be able to manage finances independently but still worry about prolonged dependency. Financial advisors are increasingly becoming key players in facilitating open financial discussions within families.
Over half of the mass affluent respondents reported that their financial advisor has helped them navigate uncomfortable financial conversations. Among younger affluent Americans, 82% acknowledged that their advisors have helped their families discuss money matters more openly. President of Private and Affluent Wealth Management at U.S. Bank, Beth Lawlor, hoped these findings would encourage more families to engage in difficult yet critical financial discussions.
“We hope that these findings spark a dialogue on the importance of families discussing challenging financial topics, ultimately empowering more families to engage in the tough conversations that are critical to building wealth,” says Ford.
The survey sheds light on the evolving dynamics of financial conversations within families across generations. While parents are proactive in educating their children about money, they remain cautious about sharing their financial situations, underlined by prevalent concerns about future financial dependency. Financial advisors are emerging as crucial facilitators, helping families bridge financial communication and planning gaps.
