How To Budget And Save Money | Money Management Tips

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Financial Planning: A Guide to Personal Finance

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The Ultimate FIRE Guide: Unlocking the Secrets of the Modern Financial Independence, Retire Early Movement - Financially Alert

Financial independence, financial freedom, early retirement - all important topics. The FIRE (financial independence, retire early) movement is gaining momentum - here is a great post that is well worth a read


The Ultimate FIRE Guide: Unlocking the Secrets of the Modern Financial Independence, Retire Early Movement - Financially Alert

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All the financial advice you’ll ever need fits on a single index card

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Teaching Kids about Money - 2 More Subjects to Address

5          Consequence of Money Mistakes – Step 3

At some point we have all made mistakes with money, and no matter how much we are told and warned about the consequence, nothing drives the point home better than personal experience. As parents it is remarkably easy, particularly when the mistake is at a point while the children are still at home or wholly dependent on us, to bail them out immediately – and they then see no real consequence.

Move forward a few years when we, as parents, are either unaware, unavailable or unable to bail them out and the mistake could be catastrophic for them. Let them make mistakes when they are younger and work out how to deal with it – it’s a lesson that will stay in place.

It is also worth discussing mistakes we have made, how we dealt with them and what lessons we learned.

6          Delayed Gratification – Step 4

Current western society norms challenge this every hour of every day. With instant and easy credit (even post 2008), we (parents and children) are constantly bombarded with not only why we “need” that product identified by the marketeers in section 3, but how we can actually have it NOW!!!!!

Based on the key point of “need” and “want” outlined in section 3, an item that falls into the “want” category is not actually required right now. Whether the “want” is delayed as the reward for achieving an important goal, target or result and when the money is available, it is an absolute key to our children’s thought processes that they will have to wait for some things, and need create a personal discipline to do just that. Some of the consequences of the “have it NOW!!!!!” culture are discussed in the next section.

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The Best Ways to Invest in Your 30s | Phil Town

Once again taking a look at key components of financial freedom, in this case investing. While the title is about investing in your 30's, there are key points for all ages

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Teaching Kids about Money - 2 Subjects to address

3          The Difference Between Need and Want – Step 1

From a relatively young age, children will use the term “need” when they “want” something (and the inter-changeability continues well into their teens, and is some cases beyond). Distinguishing between the two, and then creating an understanding of the difference is an important starting point. As families we need food, shelter, clothes, basic medicines, at the next level we need income, insurances etc. We don’t need the big TV, latest iPad, designer shirts, branded foods, newest X-box, the top of the range German car or indeed the biggest house, these items (and many others) fall into the want category. An absolute key point to keep in mind here is that every company selling products and services on the planet will be marketing to you and your children that their product is an absolute “need”. They will work on the desire, the “want”, and then create a list of reasons why you ”need” the product or service. The peer pressure created just adds to the pressure to believe that the “want” is a “need”.

Create an understanding of the difference between “need” and “want” within your off-spring’s mind and you will start the process of understanding.

4          Every Purchase has an Opportunity Cost – Step 2

Understanding family finance is finite at some point is an important concept to grasp. Each item that is purchased potentially creates the loss of an alternative purchase (the opportunity cost).

Finding some basic lessons to use to bring this point home will vary depending the age group you are working with. For youngsters, a trip to the supermarket with you and a fixed budget to spend. Ask them to decide between two items, such as which biscuits or cookies to buy. Only one pack of the branded advertised variety fits the budget, but two packs of the own brand fits. Which will it be? Is there a taste difference? What happens if we buy one pack of the own brand? What happens to the money saved? As they understand the concept, it can be related to other far more important areas than biscuits and cookies.

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Passive Income: Make More Money in 2019! | Phil Town

A key component of financial freedom is income streams. Take a listen to Phil Town discussing the topic.

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Teaching Kids about Money - Some Initial Thoughts

As parents we spend a great deal of time, energy, resources and money teaching and training our children across a massive spectrum, from eating, walking, talking, toilet training, riding a bike, getting on with others …… the list appears endless. We then ensure they go to school for up to 13 years to be educated in the basics, maths, English, science, history ……, and then onto University or further training for 3 or more years to gain qualifications to create the best opportunity for a future career – so they can follow in our path, or a better one.

In all of this there is a crucial element missing – FINANCIAL training. Not the formal training to be an accountant or a financial adviser, the training on how to deal with their own money. A very limited number of schools are now adding financial parts to the curriculum, but many are not – and that really doesn’t help those at the schools not participating, or indeed those that are well through, or have finished in the formal education system.

In the absence of teaching at school, how many of us sit down and consciously teach our children about money? Most of us would like to think we do, we may even claim we do – but in reality, how much time and effort do we actually put into this area?

So, if the schools don’t teach them, and we, as parents, don’t teach them, where will our children learn? 

The answer is copying what we do, copying what they see on TV (and just consider what they see on TV with regards to money), listening and copying their friends (who are learning from their parents and the TV – and that’s all out of your control) …… Add to this factor that when something is wanted, latest iPhone, designer clothing, the big trip from school that “everyone else is going on”, do we go into debt to pay for it (i.e. put the cost on the credit card)? Does this provide a good example? From a personal perspective it took a numbers years for my kids to understand that after we paid for something on the credit card, the credit card bill had to then be paid.

Alan & Clare Beeston

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Secret to Retiring Early

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Some Alarming Financial Statistics

Take a look at the statistics below:

·       In a recent National Financial Capabilities study, only 24% of Millennials (ages 23-35) were able to answer the first three financial literacy questions correctly and a mere 8% answered them all correctly.

The following stats all come from the 2016 T. Rowe Price report

•       80% of parents didn’t think schools were doing enough to teach kids about financial matters
• 
  
•       69% of parents are very/extremely concerned about setting a good financial example for their kids
• 
  
•       80% of parents feel that they are setting a good financial example, but then 66% also admit to doing things that wouldn’t qualify as setting a good example
• 
  
•       40% of parents admitted that when it comes to talking to their kids about finances, it’s "do as I say, not as I do."
• 
  
•       49% of parents said they rarely or never discuss family finances with their children
• 
  
•       18% of parents admitted to being very/extremely reluctant to discuss financial matters with their kids
• 
  
•       72% of parents experience at least some reluctance to having such a discussion

If any of the above seems statements feel true for you, then be aware that you are far from alone.

Keep an eye out over the next few days as we take you through some key elements that yo can use

to teach you kids more about money.

         

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Teaching your kids Financial Literacy - Financial Moron

Teaching your kids Financial Literacy - Financial Moron

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Financial Literacy 101

Financial Literacy 101

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How To Quickly Create A Simple Budget For The First Time Ever

How To Quickly Create A Simple Budget For The First Time Ever

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Can YOU Afford to Retire? | 4% Rule Explained | Safe Withdrawal Rate

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15 ways to define and achieve financial freedom | WTOP

15 ways to define and achieve financial freedom | WTOP

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Sesame Street's For Me, For You, For Later: Three Jars

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6 Step Plan to Pay Off Debt and Save Money - Life and a Budget

6 Step Plan to Pay Off Debt and Save Money - Life and a Budget

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Are You Looking for a Way to Build Wealth for a Solid Financial Foundation for Your Family?

Whilst this article has a very US based focus, the principles are worth considering

By Dawn Marie Carlson  |   Submitted On October 03, 2015

You can begin building wealth today by opening an investment program account, create a solid financial foundation, and reach your financial goals for your family in a manageable and affordable way. Your goals might include saving for your children's college education, a first or second home, your senior years, and funding a Roth I.R.A.

Investment programs may offer stocks, bonds, mutual funds, bond funds, and exchange-traded funds (E.T.F.'s) with emphasis on earnings, industry sectors, ratings, dividend yields, performance, risk factors, and growth positions.

These affordable and manageable investment programs allow you to purchase incrementally with a specific dollar investment on a regular weekly, bi-weekly, or monthly cycle. They are ideal for the beginning investor and the seasoned investor. Each program has specific requirements, such as minimum dollar investments, and related fees.

The fees are normally lower in this type of investment trading program. Another benefit is the ability to purchase incremental shares vs. single stock shares with a minimum purchase that is generally higher than a program such as this.

Perhaps your favorite new stock is selling for $59.75 per share and your regular investment amount is $250.00 per month, your purchase would result in 4.184 partial shares minus investment/trading fees charged. Each month with your regular investment, the stock price may change and the number of shares will adjust accordingly.

The best way to build your wealth is through dollar-cost-averaging by purchasing stocks on a regular cycle. The number of stock shares is larger at a lower stock price, while you may have fewer shares at a higher price. Your purchases take advantage of the lower market cycles over time.

With regular stock investments, you can grow wealth quickly and take advantage of dividend gifts throughout the year. You are accumulating more wealth as your portfolio increases in value due to the larger volume of shares owned. Then you receive more dividends on the previous dividends reinvested and added to the stock you already own.

You need to reinvest all of your dividends and leave your investments to grow; it is the only way to have your investments work for you and to build your wealth.

You can diversify your investments with stocks in different industry sectors such as computers/technology, healthcare, industrial, energy, financial, services, capital goods, aerospace, basic materials, services, construction, utilities, transportation, retail/wholesale, consumer, and auto/tires/trucks. You can balance the cyclic risk of under-performing sectors by including diverse sectors in your portfolio.

My small portfolio, which I opened ten years ago, is a self-directed stock investment program and a Roth I.R.A. where I purchased stocks in different industry sectors. I monitor the stocks and their news regularly while I have enjoyed stock splits with a consistent 20-26% annual portfolio growth. If any stock is underperforming over time (it happens), I sell it, research new stocks, and invest in them.

I rebalance my entire portfolio in both investments annually in January. I review each stock on a ten-year, five-year, one-year, and six-month analysis on the program website. I also review the dividend yields, income growth, and company news. I like dividends! All of these factors are important in my stock evaluation whether to maintain or sell a stock.

If you want to build wealth, you need to do your homework and research your stocks, funds, etc. unless you hire a professional to assist you or use the financial advisors within your investment program.

There is an enormous volume of investment information available through investment firms, banks, and financial advisors that will assist you in making informed decisions.

There are a number of investment publications and financial experts on TV, on podcasts, and on websites offering market analysis and advice.

All investments are subject to market fluctuations and the value of your investments may rise or fall based on world, political, business, and market conditions. There are not any guarantees.

The best investment program is one in which you feel comfortable with these factors and you can rest knowing your investment plan is working for you without causing worry and stress. Dependent on your age, investment needs, and financial ability, you can find a wealth-building plan today that maximizes your financial position and meets the financial goals and needs for your family.

Please visit my website and sign up for my Dawn to Dusk Blog at http://www.DawnToDuskEnterprises.com. Visit my Fuzzy and Romeo Adventures page on my website http://dawntoduskenterprises.com/fuzzy-and-romeo-adventures/ and find my new children's book - Fuzzy and Romeo Adventures - The Mysterious Intruder - a dog adventure story. Also available on Amazon.com as a Kindle book. Thank you!

Article Source: http://EzineArticles.com/expert/Dawn_Marie_Carlson/2184863

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Warren Buffett on Teaching Kids Finance

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Financial Planning: Your Wealth Account

By Evelyn Ivy  |   Submitted On February 21, 2015

There is a popular saying that goes like this, "he who fails to plan, plans to fail". Having no financial plan is the worst financial plan you could have as it is the surest way to fail in your finances.

Downfall of no financial plan

The downfall of not having a financial plan are as follows:

Lifestyle creep: Having no financial plan is the surest way to suffer from lifestyle creep. Lifestyle creep is allowing your lifestyle to grow faster than your income. For instance, a sales man convinces you to buy more car than you can afford. When the first bill comes due, you find yourself robbing Peter to pay Paul.

Out of control debt: With an increase in lifestyle also comes a corresponding increase in debt

Paying more than your fair share of taxes: Without planning, you will definitely pay more in taxes than you ought to.

Creating your financial plan: Your wealth account

Your wealth account consists of assets less any liabilities. Assets increase your wealth while debt has the reverse effect.

·         Examples of assets are:

o    Investments

o    Retirement funds

·         Examples of debt/ liabilities are:

o    Mortgage

o    Car loan

o    Business Loans

o    Student loans

o    Credit card debt

To determine the net of what should be in your account you deduct your assets from your debt. The net amount in your wealth account is known as your net worth. Net worth is what you own minus what you owe. With a good financial plan, net worth should grow year over year. Net worth could decline at retirement or after a savings goal has been reached and expended.

Building your wealth account

Human choices are very fickle so gaining focus is a very important part of any wealth building strategy. This is why it is important to write down your goals and save it in a place you can see it often. We need that consistent reminder as to why we do what we do or we will give up easily.

To build your wealth account:

Take an inventory of all assets and debt

Building your wealth account starts by having a detailed list of what you own versus what you owe.

Create a budget

A budget is a way of telling your money where to go rather than your money telling you where to go.

Automate your savings

I have learned over the years that I cannot always trust myself to do the right thing all the time, as a result I have learned to automate the actions I want to consistently see applied in my life. For instance, I arrange for a certain amount of money be taken out from my main account and put into several accounts. I have my wealth savings fund, my vacation fund and my emergency fund. Every month, money gets automatically taken out of my main checking account and transferred to this savings account. The amount I take out is determined by a budget I make at the beginning of the year. So, if I am planning an exotic vacation, I will compute how much I need to have in that fund by the vacation day and figure how to earn the extra money I need.

Minimize your debt

Debt is using today's income to pay for yesterday's expense. When you are in debt, you are caught up in the past. Moving into the future while taking care of the past is like running a marathon with your leg tied to the pole in the starting line. You are not going to get very far.

To minimize debt, I do not buy assets that have a fast diminishing return with debt. For example, a car once it leaves the car lot loses 20% of its value. Why would I want to keep paying for an asset with diminishing returns?

Educate yourself

Educating your mind is one of the best ways to increase your income. You do not have to engage in formal education to get educated. You can read books, take online classes, attend webinars, listen to podcast, etc. Be sure to educate your mind about various investment opportunities.

Invest wisely

The education you received from the step above will go a long way in helping you invest wisely. Use the income from your investments to make more income.

Plan to minimize taxes

You should have a certified public accountant you talk to on a regular basis about tax saving strategies.

After you have done the above, sit back and watch your wealth account grow. Having a cushion in your finances gives you more choices in life. There is also the added benefit of being able to say no to jobs you don't like because you are not pressed for cash.

Teaching freelancers and consultants how to gain financial freedom with their business. For more information, visit http://lifestylecpa.com/

Article Source: http://EzineArticles.com/expert/Evelyn_Ivy/2054771

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THE BIGGEST MISTAKE YOUNG PEOPLE MAKE - ROBERT KIYOSAKI- RICH DAD POOR DAD

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Six tips to teach your child about money matters

Here's a great article from the Observer, first published back in 2014, but still a very worthwhile read

Written by Kara Gammell

Mon 10 Nov 2014 06.59 GMT Last modified on Sat 2 Dec 2017 06.29 GMT

With research showing that children copy their parents’ approach to finances, we look at how to pass on good money skills

 Children’s education about finances can begin as soon as they learn to count. Photograph: Alamy

The parents of a child who has begged for the latest Lego spaceship, or merchandise from Disney’s Frozen film, probably won’t have uttered the words “delayed gratification” in their response. However, such terms could become a valuable tool in teaching children about money.

Most parents excel when it comes to teaching safety and good manners, but with money few know where to start. Money skills can be a blind spot because so many feel financially inept themselves. Yet research suggests parents’ behaviour is the biggest influence.

“As a society in Britain, we don’t talk about money – it’s a sort of massive taboo,” says clinical psychologist Dr Elizabeth Kilbey. “Unlike other parts of parenthood, there is no playground chatter about the topic and, as a result, parents revert to what they know – passing their habits down to children.”

So how do you teach your children to be financially astute and, eventually, independent?

Lesson 1 Start early

Teach them well – and early – says the government-backed Money Advice Service. Its research suggests that adult money habits are set by the age of seven. But financial lessons must be age appropriate to resonate, says Kilbey: “Young children are not miniature adults. Lessons should be tailored for their age, rather than just made simpler.”

Start as soon as they are able to count and make money the topic of regular family discussions. Time these around dates when they are due to receive a cash gift so that you can talk about saving versus spending.

Lesson 2 Want versus need

While your child will naturally ask for the latest games console, making them understand the difference between needs and wants will help them make sensible spending decisions from a very young age.

One way to do this is to put it into a context that your child can understand, says Kilbey. “If they want the latest Star Wars Lego set that costs nearly £300, explain how long it would take an adult to earn that amount of money.”

She suggests creating a specific example to put it into perspective. How many hours would a teacher, for instance, have to work to pay for that item? “This demonstrates delayed gratification which is an important part of learning about money.”

Parents should reinforce through words and actions that it’s important not to spend more money than you have. One good way is to keep the just-for-fun purchases in check by not giving in to every request.

“It is OK to say no,” says Kilbey. “As adults we are often told no, whether it is from employers or the bank, and children need to hear it.”

However, experts warn against saying you can’t afford it. It’s easy to use this default response when your child begs you for the latest toy. But doing so sends the message that you’re not in control of your money, which can be scary – and create future anxieties.

Kilbey suggest that a more appropriate way is to say: “We choose not to spend our money like that.”

Separate money into different piles. Photograph: Alamy

Lesson 3 Know the difference

It is crucial you show your children that money can play a variety of roles in their daily living, whether it is spending today, or saving for tomorrow.

Providing pocket money in lower denominations makes it easier to allocate a proportion of income to different goals.

Labelled jars work to separate money – one for saving, one for spending, and one for donating. Any time they make money by doing chores or receiving birthday gifts, encourage your child to divide the cash equally among their jars. It’s not a huge act, but it does show that it’s OK to spend some, money, as long as you’re giving back to others and saving as well.

Once they’re older, their bank accounts can mirror the split.

Lesson 4 Learn from mistakes

When kids have their own money, it is essential that they make choices and deal with the consequences of their actions. By experiencing negative consequences first hand, they will learn to make smarter financial decisions.

“Let them take responsibility for small amounts,” says Kilbey. “Allow them to make mistakes. It really is the best way to learn.”

Lesson 5 Make it relevant

Enable children to experience using money on a practical level to experience the emotional highs and lows.

“First, they must save it, then spend it, then experience the euphoria that comes from buying the item they wanted, but also what it feels like to lose some money in the process. This will reinforce the idea that it must then be saved again.”

 One way to teach children how to handle money is through routine tasks and household chores. Use the weekly food shop to talk about planning, saving and finding the best value. Let your children hold the list and tick off each item or, if they’re older, give them a few items from the list to find on their own at the best price.”

Using actual cash is important. “It’s only once they have grasped ‘real’ money can you move on to the more difficult concept of virtual or digital money,” Kilbey explains.

When your children are very young, work money concepts into their imaginary games, such as playing pretend store or restaurant. However, Kilbey suggests avoiding play money: “Parents should role play with real money and model the importance of giving it the care and attention it deserves.

“Store it properly at the end of the game, as it will show that it needs to be looked after.”

Lesson 6 Lead by example

Parents have a great deal of influence on their children, and it is not just the positive messages that resonate. Children tend to copy what we do rather than what we say, so limit the amount of shopping trips as a leisure activity, as they might start to think that money is an unlimited resource and that spending is fun.

What’s more, research suggests that a third of parents lie about money. Studies show this will only send the wrong message. They may learn that lying is a good way to cover up financial problems, or that lying about money is acceptable. If your child asks a financial question that you’re not comfortable answering, be honest and say you don’t want to talk about it.

STARTING POINT

If you are a parent who won’t hand over any cash until your offspring have earned it, you are in the majority.

Halifax research has found that around two thirds (65%) of children aged between eight and 15 are doing some form of household chores to earn their pocket money.

So when do you start paying? Dr Elizabeth Kilbey suggests a weekly amount during infant school then spaced out to fortnightly or monthly by the time they are finishing secondary school.

“There has to be some sense of the real world, and pocket money is a good way to do that as it teaches short- and long-term saving and good spending habits,” she says.

The average weekly amount given to children between the ages of eight and 15 is £6.35, according to Halifax.

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6 Money Traps to Avoid in Your 30s | Phil Town

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Parents Show No Reluctance To Overspend On Kids But Are Reluctant To Discuss Money With Them

Article from T. Rowe Price:

Parents, Kids & Money Survey finds that while parents worry about spoiling kids, they often overspend on them and defund family financial essentials, such as retirement savings and emergency funds

Parents are more inclined to discuss money with boys than girls and are more likely to say it's because boys need more help NEWS PROVIDED BY T. Rowe Price Mar 29, 2016, 12:30 ET SHARE THIS ARTICLE BALTIMORE, March 29, 2016 /PRNewswire/ --

T. Rowe Price's 2016 Parents, Kids & Money Survey, which sampled 1,086 parents of 8 to 14 year olds nationally and their kids, found that parents' reluctance to discuss money with their kids has not translated to a reluctance to spend it on them.

Nearly half of parents (46%) have gone into debt to cover something their kids wanted, and many say they spend too much on things their kids do not need (57%). Yet most worry about spoiling their kids (58%), and many kids have come to expect their parents to buy them what they want (57%).

When asked how often they take advantage of teachable moments that occur throughout the day to discuss financial topics, less than half of parents (44%) take advantage of the opportunity to discuss money with their kids most of the time. And while many parents have some reluctance to discuss family finances (71%), they tend to talk to boys more about money than girls. When asked why, one of the top reasons given was that boys need more help with money. Stuart Ritter, CFP®, a senior financial planner at T. Rowe Price and father of three, noted, "It's always fun to throw elaborate birthday parties and see our kids' faces light up when we buy them the most coveted toy in the store, but the cost isn't worth it if we're jeopardizing our families' financial security and causing anxiety. We do ourselves and our kids a disservice by not living within our means and funding long-term goals such as retirement. "Parents are likely to find that investing their time in having money conversations with their kids will have a far greater impact on their kids' lives long after the latest gadget or toy is discarded. We know that many kids are talking about money with their friends often and even lending it to each other. They're learning about money, even if parents aren't discussing it. And it's important that they learn the right money lessons."

T. Rowe Price encourages parents to invest in their kids' futures by talking to them about money matters weekly. The survey found that parents who discuss financial topics with their kids at least once a week are nearly twice as likely to have kids who say they are smart about money (68% vs. 36%). To help, the firm created MoneyConfidentKids.com, which provides free online games for kids; tips for parents that are focused on financial concepts such as goal setting, spending versus saving, inflation, asset allocation, and investment diversification; as well as lessons for educators. MONEY CONVERSATIONS ARE NOT ALWAYS HAPPENING

Most parents have some reluctance to discuss financial matters with their kids: 71% of parents have at least some reluctance to discuss financial matters with their kids, while 29% are very or extremely reluctant. But many kids are not reluctant to discuss money with their friends: 44% of kids agree with the statement, "My friends and I talk about money a lot." Conversations are being translated into actions, as nearly half of kids (47%) have lent money to their friends. Only 15% were not paid back. Nearly as many parents are uncomfortable discussing family finances as they are death: 58% of parents said they have some discomfort discussing family finances with their kids. Only slightly more (59%) said they have some discomfort discussing death with them. And when parents are uncomfortable discussing money, kids know it: 35% of kids say their parents are uncomfortable talking about money with them.

Less than half of parents take advantage of teachable moments most of the time: When asked how often they take advantage of the opportunities that occur throughout the day to talk to their kids about financial topics, only 44% of parents said they do at least most of the time. Using market volatility and account statements as teachable moments: 20% of parents have discussed market volatility with their kids and 19% have shown their financial statements to their kids. Parents talk to their boys more about money...but only because they think their boys need more help: Of the 561 parents who have kids of both genders, 30% indicated that they talk to their boys about money more, while 46% said there was no difference and 24% said they talk to their girls more. When asked why they speak with one child more about money than the other, one of the top reasons given by the parents who talk with boys more is because they need more help with money (43% vs. 30%). Parents keep a close eye on their kids' money: 83% of parents say they keep a pretty close eye on their kids' money and what they're doing with it. In fact, nearly half of parents (46%) decide what to do with their kids' gift money.

Some parents do not share financial information with their significant others: 41% of parents agree with the statement, "I keep financial secrets from my spouse/partner." PARENTS STRETCHING FINANCIALLY FOR KIDS' NONESSENTIALS Nearly half of parents have gone into debt for something their kids wanted: 46% of parents have gone into debt to pay for something their kids wanted. Many parents say they spend too much on things their kids do not need: 57% of parents agree with the statement, "I spend too much money on my kids for things they don't really need." More than half of parents worry that they spoil their kids: 58% of parents agree with the statement, "I worry that I spoil my kids." And kids expect their parents to buy them what they want: 57% of kids agree with the statement, "I expect my parents to buy me what I want." Allowance can be expensive: 79% of kids receive an allowance. Within that group, 20% of kids receive an allowance of more than $20 per week. Kids began receiving an allowance at an average age of eight. Birthdays come with big price tags: 41% of parents spent $200 or more on their child's birthday presents in the past 12 months. The same percentage (41%) spent $200 or more on their child's birthday party in the past 12 months.

Parents are not always using emergency funds for emergencies: 55% of parents have used their emergency funds to cover non-emergencies, including day-to-day expenses (24%), paying off debt (22%), kids' education (20%), and daycare/childcare (13%). Most have insufficient emergency funds: 72% of parents do not have sufficient emergency funds to cover at least three months' worth of living expenses, including 49% who do not even have an emergency fund. T. Rowe Price recommends having an emergency fund large enough to cover at least three to six months of living expenses in the event of an unanticipated need. A surprising percentage have pay day loans: 9% of parents have pay day loans. The average balance of their pay day loan is $2,291 (median: $1,000).

RETIREMENT SAVINGS SUFFERS Parents mistakenly prioritize college savings over retirement savings: When asked which is a higher priority for you and your family, 67% of parents said that saving for their kids' college education was more important than saving for retirement. Many are using retirement savings to fund other non-urgent priorities: 44% of parents have used their retirement savings to fund non-emergencies during the past two years, including paying off debt (17%), vacation (17%), kids' education (16%), and day-to-day expenses (15%). In fact, retirement funds are more likely to be tapped for non-emergencies than emergencies. 37% have tapped retirement savings to cover emergencies, including health care costs (16%), home repair or renovation (15%), car purchase or repair (13%), taxes (12%), and covering expenses while unemployed (10%).

While some parents may have tapped retirement savings for multiple reasons, a small 8% of parents have tapped retirement savings for only emergencies. 48% of parents have not tapped retirement savings during the past two years. Discussing retirement savings makes many parents anxious: 60% of parents agree with the statement, "Conversations about saving for retirement usually fill me with a lot of anxiety." They do not know how much to save for retirement: 53% of parents agree with the statement, "If I save 6% of my income toward retirement, I'll have enough money to comfortably retire at age 65." T. Rowe Price recommends investors save at least 15% of their income toward retirement, including any company match, in order to potentially replace 75% of their preretirement income. Parents would rather go into debt than pull from retirement: 67% of parents would rather go into debt than pull money from a retirement account if faced with a financial hardship that they couldn't otherwise cover. In fact, if faced with a hardship, many would rather use credit cards (42%), ask family or friends for money (38%), or take a personal loan (24%) before tapping retirement savings (22%).

Low knowledge about the benefits of using Roth IRAs: Only 35% of parents correctly identified a Roth IRA as "a way to save for retirement where you contribute after-tax money." T. Rowe Price research suggests that Roths, either an IRA or 401(k), may be a more effective way for most investors to save for retirement compared with a Traditional IRA or 401(k). But parents have notable earning potential: There is a high level of educational attainment among parents, as 66% have a higher education degree, including 12% who have attained an associate's degree, 33% who attained a bachelor's degree, and 21% who attained a graduate degree. Their human capital potential could better poise them for their savings priorities.

ABOUT THE SURVEY The eighth annual T. Rowe Price Parents, Kids & Money Survey, conducted by MetrixLab, Inc., aimed to understand the basic financial knowledge, attitudes, and behaviors of both parents of kids ages eight to 14 and their kids ages 8 to 14. The survey was fielded from February 4, 2016 through February 11, 2016, with a sample size of 1,086 parents and 1,086 kids ages 8 to 14. The margin of error is +/- 3 percentage points. All statistical testing done among subgroups (e.g., boys versus girls) is conducted at the 95% confidence level. Reporting includes only findings that are statistically significant at this level. ABOUT T. ROWE PRICE Founded in 1937, Baltimore-based T. Rowe Price Group, Inc. (troweprice.com) is a global investment management organization with $763.1 billion in assets under management as of December 31, 2015. The organization provides a broad array of mutual funds, subadvisory services, and separate account management for individual and institutional investors, retirement plans, and financial intermediaries. The company also offers a variety of sophisticated investment planning and guidance tools. T. Rowe Price's disciplined, risk-aware investment approach focuses on diversification, style consistency, and fundamental research.

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