Are You the Worst Money Role Model for Your Kids?

The answer is probably a resounding yes. Does that seem harsh? It may not be harsh enough. Read on for some reality checks, especially for Millennials.

A father and son in matching blue shirts have matching bored expressions as they look at laptops.
(Image credit: Getty Images)

When it comes to money, older generations are the worst role models for their kids and grandkids. Let’s look at why:

How will older adults pay the piper?

Without appearing overly dramatic, we are in a crisis. A real one. “In the past decade, there’s been a steep increase in debt among households headed by someone age 75 and older,” CNBC reports. If you are 65-74 years of age, you have average debt (including credit cards) of about $105,250, according to SmartAsset. In fact, MarketWatch reports, “Seniors have more household debt now than they did during the financial crisis.”

The good news is that older adults are living longer than ever before. Therefore, they have more time to pay off the debt, but the bad news is that many older adults are financially insecure, according to the National Council on Aging (NCOA), living at or below 200% of the federal poverty level ($25,760 per year for a single person in 2021). They may never be able to pay off the debt. NCOA says, “1 in 3 older adults is economically insecure.”

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What is also scary is that 60% of adults, reports, don’t believe their retirement savings are on track, so the baggage of financial problems is going to pass to the next generations.

The legacy we leave

Millennials, are you financially prepared to rescue your parents from financial disaster? Shame on older parents for leaving this burden to their kids. It’s also not just being stupid with money; it’s not teaching your offspring to be financially independent, as well.

As parents, we all know kids watch us and learn from us. When I was president of The First Women’s Bank in 1985, I schlepped my young kids to bookstores to find books to teach them about money. There were none; the topic of teaching kids’ financial literacy did not exist. My young child quipped, “Mommy, why don’t you just write the books?” So Mommy did. I became an entrepreneur and wrote the first money books for kids, parents and schools. But 35 years later, when this topic is mainstream, we are still doing our kids a disservice.

All generations are stupid when it comes to money

PwC in their report Millennials & Financial Literacy: The Struggle with Personal Finance found when analyzing how Millennials fared at personal finance, that they also flunked all of the tests. When quizzed about financial concepts, only 24% had basic financial knowledge. Thirty percent of Millennials are overdrawing their checking accounts, with more than half of them carrying credit card balances. What are they doing about their ignorance? Not much. Only 27% of Millennials are seeking professional financial advice.

But to be fair, Millennials are not just ignorant about money. According to Real Estate Witch, 27% of them can correctly name Taylor Swift’s latest album, but only 20% can name their congressional representatives.

What are we teaching our kids?

Real Estate Witch also noted that nearly half of Americans consider money management the most important life skill to have, yet we are not doing much about changing the narrative.

In EVERFI’s study The State of Financial Literacy 2023, less than a third of high school juniors and seniors reported that they felt prepared or had the skills to manage their money. Forbes found that, shockingly, 87% of teens in the U.S. admit to not understanding finances.

We know that our kids are financially illiterate, and we know that many parents don’t have the tools to teach their kids to not do what they have done. It is a huge problem, yet only 23 states in the U.S. require high school students to take a personal finance course, according to

Keep ignoring your parents

Fortunately, many of our Millennial offspring are not following their parents and have actually cut back on spending. Younger adults are struggling to make ends meet. Their debt is mounting as their student loan burden has returned, and they are probably not going to get any student loan forgiveness as decided by a recent Supreme Court ruling.

The average Millennial makes about $71,566 a year, according to SmartAsset, based on U.S. Census Bureau data. They have a net worth of $18,000, says The College Investor, based on the latest Federal Reserve data. What they do own is debt. Their average debt load is about $115,784, according to Experian. Much of this is student loan debt, the average being $40,614, which means that will stick around for 20 years until they can see the light.

This generation may not be running amok like their parents, but they are not stars at financial literacy either. They do start saving early, at about age 24, the Transamerica Center for Retirement Studies says, but tend to keep their investments in cash as opposed to taking advantage of their age and the miracle of compounding by investing in the stock market. But 60% feel that they are significantly behind when it comes to retirement savings. The average retirement savings of those ages 35 to 44, according to NerdWallet, is only about $132,000, which means that bad financial habits will be, again, passed on.

Now what?

Change the narrative. Invest for and in your child’s future. It is now more important than ever to make sure that we are setting our kids up for financial success from day one.

One way to do that is to start an investment account on your own. Setting up a 529 plan is great, but only 30% of Americans are using them. Sometimes we need a little nudge. One tool that does just that is called EarlyBird. I have been on the board of advisers since its launch in 2021.

EarlyBird knows that it “takes a village” to invest in our kids, both via education and real savings, in order to give them the financial security every parent and grandparent wants for their kids. They start at birth and build that village of friends and family to start their loved ones on the road to financial security by leaving a meaningful legacy of good habits. Video messages can even be shared by adults so that as the kids grow up, they know what real financial security means.

Jordan Wexler, EarlyBird’s CEO, emphasized to me, “It’s never too early to set up the next generation for financial success. Adults in the U.S. have historically not done a great job of that, and we at EarlyBird are confident that our platform can alter the landscape for parents to give the gift of financial freedom to their loved ones.”

Obviously, anyone can figure out how to spend money. It takes the forward-thinking person to save it. And it takes the caring person to set the example for their loved ones. With the proper tools and support, you can be that person.


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Neale Godfrey, Financial Literacy Expert
President & CEO, Children's Financial Network Inc.

Neale Godfrey is a New York Times #1 best-selling author of 27 books, which empower families (and their kids and grandkids) to take charge of their financial lives. Godfrey started her journey with The Chase Manhattan Bank, joining as one of the first female executives, and later became president of The First Women's Bank and founder of The First Children's Bank. Neale pioneered the topic of "kids and money," which took off after her 13 appearances on "The Oprah Winfrey Show."