The bad news: your teenager is glued to TikTok. The good news: she may be learning about fiscal responsibility. Young people are turning to social media to learn about how to manage their finances, according to a Wells Fargo Parent-Teen Study on investing.
The study included 318 teens between the ages of 13 and 17, and 304 parents of teens in that age range. The result: parents underestimate how much their kids are learning from social media. Only 12% of parents believe their teens use social media for financial education.
According to the survey, over half of teens (57%) say they learned about handling finances from their parents. But they are also likely to learn financial lessons from other sources, including school (47%), social media (35%), and online websites and articles (34%).
“There is a bit of a disconnection between parents’ and kids’ perceptions around financial education,” said Kathleen Malone, financial advisor with Wells Fargo Advisors in Charlotte, North Carolina. “While 61% of parents polled say they’re talking to their kids about finances, only 43% of teens report they have had these conversations. It’s very important for families to discuss money — and for our next generation to understand how to handle their finances.”
The survey found common ground between parents and teens in the importance of learning about finances and investing. Almost all teens and parents (93% teens, 92% parents) agree that teens who learn about investing will be better off financially later in life. However, nearly half of the teens (49%) and nearly one in three parents (32%) give themselves a D or F grade in investment knowledge. Teen girls (53%) rated themselves lower in investment knowledge than boys (42%).
“The good news here is that three out of four (75%) teens say they are ready to learn about investing, and nearly nine in ten (87%) parents believe their teenage children are ready for it, too,” said Malone. “What’s more, I’m thrilled to see the next generation demonstrate such enthusiasm and desire to hone their investing acumen.”