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ING Direct had a survey done asking people with children about their finances, savings plans and willingness to teach their kids about money matters.
ING Direct Sharebuilder President Dan Greenshields says he was personally surprised by the results of the survey.
“One out of five responded that they had taken money from their kids savings to cover bills or pay off debt. And I’ll be honest with you, one out of three said they were stopping putting away money during these times and that doesn’t surprise me, I mean that’s actually probably a prudent step as long as you know that as soon as you get back on your feet or you get your job back you’re going to restart. But to actually raid those savings — those are kind of — that’s money that’s kind of last resort money, it’s kind of break glass in case of emergency — I mean it has to be a real emergency, not just the fact that you can’t pay your cable TV bill.”
The survey was conducted online back in April. More than 2,000 people responded with 18 percent admitting they’ve dipped into the savings they had set aside for their children.
It’s a decision that Greenshields says illustrates the serious financial problems many have found themselves in.
“I guess that points to the magnitude that people are suffering. You know it’s one of those difficult things to talk about, people don’t like to talk about that they’re having a tough time so you can kind of quietly raid those accounts and continue to live your lifestyle. But I think people have to make tough choices in this environment and that means that you may have to give up some things that you’re accustomed to and recalibrate.”
And in another surprising response, Greenshields says parents admitted to being more prepared to talk to their kids about drugs or sex than about finances.
“In the United States we are really doing a pretty good job about education about drugs and awareness about disease and teenage issues, if you will, coming into age. However, on financial preparedness, a lot of our kids exit high school and they get literally thrown out into society and they’re totally unprepared. And we should start really in the K-6, really in about the 6th grade — 10-12 years old is the perfect time to start educating our kids.”
Greenshields says parents should view dipping into college savings accounts as a last-ditch effort in the most extreme circumstances.
And he says tough economic times are some of the best opportunities to teach your kids about financial wisdom.
Laurie Johnson. KUHF-Houston Public Radio News.
