Kids Learn From Parents’ Money Mistakes

The financial crisis appears to have had a positive impact on teenagers’ financial habits.

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Move over, Millennials. The younger generation— dubbed “generation Z”—might be even better with money than you are.

Young people between the ages of 13 and 22 report that they are already saving money ($300, on average) and are focused on big financial questions, such as how to afford college, according to a new survey from TD Ameritrade. So why are these young people already taking on such weighty financial issues? The answer seems to be that having come of age during the financial crisis, they were exposed early to the importance of learning how to manage money.

TD Ameritrade reports that generation Z has watched their parents struggling to pay back student loans, which in turn taught them how much of a burden those loans can be. Almost six in 10 parents of generation Z reported taking out student loans, and 43 percent continue to pay them back today. At the same time, about half of those parents are also saving for their own children’s future college educations.

Seeing their parents deal with the difficult economy seems to have had a positive overall effect: Three in four young people said they think saving money is important, and four in ten said they have a budget, which they follow closely. Over half of generation Z respondents surveyed said they would save an extra $500, with an additional 11 percent reporting they would put it toward college costs.

Those findings are similar to surveys of generation Y, now 20- and early 30-somethings, who also learned from the financial crisis, while also suffering through it. A survey by the online brokerage firm Scottrade found that the recession inspired 20-somethings to educate themselves about how the economy works as well as to learn more about their own personal financial situations.

In addition, a higher percentage of respondents said they’re doing more research before investing relative to older groups. Scottrade reports that part of the reason generation Y is excelling at managing their money is because they see it as fun, instead of a tedious obligation.

Still, the news isn’t all good. Credit card problems are already cropping up among the 13-to-22 crowd. Among those who have a credit card, over half have carried a balance for over six months, which means racking up interest and more debt, and fewer than one in four routinely pay off their cards each month. Many young people don’t yet have their own savings or checking accounts, which can help them learn how to save and manage accounts.

Not surprisingly, parents played a pivotal role: The better budgeters were more likely to have parents who talked about money with them. Parents, reports TD Ameritrade, “are still the most influential variable when it comes to educating children on basic financial skills.”

Hear, that parents? If you’re going through a financial rough spot, share the struggle with your children. They can learn from it.

Twitter: @alphaconsumer