A new study from the University of Georgia suggests that families who discuss money more often help their children through difficult times.
Money is a complicated but important subject. It can be especially stressful for young adults to figure out how to prepare for future finances and manage money. This stress could impact their mental health and ability to do well in school.
“Money is a taboo topic in society,” said Kenneth White, an assistant professor teaching in the online Master of Science in Financial Planning program. "But open dialogue and transparency can really help with the financial socialization of children. That’s the best way they can learn.”
White led the study alongside a team of researchers from multiple institutions who examined data collected by the 2014 National Student Financial Wellness Survey, which held responses from more than 14,000 students at 52 colleges and universities across the country. The survey questions explored a variety of topics ranging from family dynamics, debt, and socioeconomic stress.
The study found that students whose families talked openly about money, mainly investing, reported feeling less stress and higher optimism when it comes to money management and their future finances.
“It’s apparent that students who had those conversations had better financial outcomes,” White said.
Financial stress is the anxiety or worry that one will have enough money to pay bills, participate in social activities, and meet their basic needs and wants. It can be debilitating for students who are facing student debt and applying for jobs after graduation.
“Students who are feeling financial stress tend to also have some shock to their academic achievement,” said White. “So alleviating that stress can help with their academic success. That’s why it’s so important that parents talk to their kids about money. Getting those messages at home is the most impactful.”
The study also revealed a link between race and the types of financial conversations students report having with their parents. For White, this finding provides key insights on how families and schools can approach conversations about money.
While conversations between parents and children are very influential, White argues that schools and other organizations have an opportunity to share informed messages about money. Many schools require or recommend students take a financial literacy course, but White believes that standardization is key.
“Schools can be a big influence, but in order to do that, they have to have more teachers and educators comfortable with financial literacy to promote those kinds of conversations,” said White, “Having an educational policy in place where students must take a stand-alone personal finance course in order to graduate from high school would go a long way in encouraging those financial conversations at home.”
For more information, check out this article: https://news.uga.edu/money-talks-matter/