Education at Early Age Improves Consumer Confidence in Financial Knowledge

by News Guy on September 23, 2010

Role Model Key to Financial Literacy Success; However, One-in-Five Polled Either Cite Celebrities or No One as a Role Model

CHERRY HILL, N.J., and PORTLAND, Maine – August 2010 – Consumers with strong financial knowledge begin saving earlier and are more confident in their everyday financial tasks, according to the TD Bank Financial Literacy Poll released by TD Bank, America’s Most Convenient Bank®.

Education at an early age is key to achieving financial confidence. Many consumers doubt their financial skills and believe they were not taught enough at a young age and feel that saving money is difficult. TD Bank surveyed 2,160 consumers to better understand the financial literacy and attitudes of consumers in the Northeast, Florida and Mid-Atlantic.

“The poll reveals that it is imperative for parents to act as the primary role model to their children if they want financially successful children,” says Suzanne Poole, executive vice president, retail sales strategy and distribution, TD Bank. “Starting financial literacy lessons early results in adults who are more confident in their money decisions, are more financially literate and are more skilled at saving money.”

Who is Your Financial Role Model?

Although this is not an easy question to answer, more than one-quarter of consumers struggled to identify any financial role models. The poll also revealed the primary sources for financial information and help in managing finances. Forty percent of consumers in the Northeast and 38% in the Washington, D.C. region turn to family members for financial advice; while Warren Buffet and famous financiers often edge ahead of financial advisors.  In fact, only about one-quarter of the consumers surveyed have a financial advisor or financial planner.

Consumers with “good” financial literacy started learning about money slightly earlier than the average consumer, but only one-half of consumers started learning or having conversations about money under the age of 18.  From those who did start learning about savings at a young age, 77% of New Englanders, 80% of Mid-Atlantic residents and 78% of Floridians say they learned from their parents.

Financial firsts are important to financial literacy confidence and education. Although most polled, about 70%, can remember opening their first bank account, only half can remember their first deposit or investment. However, those with “good” financial literacy, about 57%, could recall their first deposit amount.

“TD Bank believes it is important to not only start having financial conversations at a young age, but to also make those first financial experiences memorable,” said Poole. “More than 22 years ago, we created the WOW!Zone, a free, financial literacy program to help children ages 5-18 develop strong financial skills, in school and online. It is a great tool for parents to use to make learning about money fun!”

Responsibility and budgeting are taking a more prominent place at the dinner table today than when parents were younger. Sixty-two percent of parents versus 77% of children today learned about the importance of money. About 75% of parents are teaching their children about financial responsibility as well as saving, budgeting, the value of money, credit cards, etc. While only about 15% of parents were taught about investments and only about 20% learned how to use a credit card.

Poole added, “Today’s children are not learning about money that differently than their parents did.  Parents today are taking primary responsibility in financial education.  Parents should ask themselves if they are the financial role model they need to be. Starting young is not the only key to success. We found that the topics parents talk about and creating memorable financial moments matter, too.”

Other key findings from the survey include:

  • About 94% of those polled with “poor” financial literacy skills wished saving money wasn’t so hard versus 65% with “good” skills.
  • About 40% of consumers in New England, the Mid-Atlantic and Florida with “poor” financial literacy skills are confident in making financial decisions versus 93% with “good” skills.
  • About 81% of those surveyed wished they would have started saving earlier, and about 55% of them were definitely not taught when young.
  • 71% of consumers in the New England, Mid-Atlantic and Florida regions are confident in their understanding of everyday financial tasks such as paying bills on time, followed by balancing their checkbook.

The majority of consumers in the New England, Mid-Atlantic and Florida regions are either extremely confident or very confident in financially preparing their children; consumers responded that responsibility, saving money and budgeting money are the most important topics to teach children today.

Note:  Please contact us for additional data points and specifics from New England, Mid-Atlantic and Florida.

Survey Methodology

The study was conducted among consumers in the New England census division, Middle Atlantic census division, Florida and Washington DC. The total sample size includes 2160: 756 in New England, 1102 in Middle Atlantic and Washington DC (100), 302 in Florida. Sample size of 2160 has a margin of error of +/- 2.1%. Fieldwork competed July 9-19, 2010.

About Angus Reid Public Opinion

Angus Reid Public Opinion is the Public Affairs practice of Vision Critical—a global research company. Vision Critical is a leader in the use of the Internet and rich media technology to collect high-quality, in-depth insights for a wide array of clients.

About TD Bank, America’s Most Convenient Bank®

TD Bank, America’s Most Convenient Bank, is one of the 15 largest commercial banks in the United States with $160 billion in assets, and provides customers with a full range of financial products and services at more than 1,100 convenient locations from Maine to Florida. Effective April 16, 2010, TD Bank has acquired certain assets of Riverside National Bank of Florida, First Federal Bank of North Florida and AmericanFirst Bank, and currently operates under those trade names. TD Bank, N.A., is headquartered in Cherry Hill, N.J., and Portland, Maine. For more information, visit www.tdbank.com.

TD Bank, America’s Most Convenient Bank®, is a member of TD Bank Financial Group (TSX, NYSE: TD) of Toronto, Canada, a top 10 financial services company in North America and one of the few banks in the world rated Aaa by Moody’s.

Like this Article? Sign up for our Newsletter

We respect your email privacy

Leave a Comment

This blog is kept spam free by WP-SpamFree.

Previous post:

Next post: