For many Americans, financial education was limited or absent growing up. Conversations about money were often avoided, leaving people to figure things out on their own as they entered adulthood. In fact, over three-quarters of Americans reported limited readiness to manage their finances when they entered adulthood, including a quarter who did not feel at all prepared. In this study, we explore how new parents plan to change this pattern by examining the financial topics today’s parents plan to discuss with their children compared with the conversations they had growing up.
As estate planning professionals at Helton Law Firm, in partnership with 1Point21 Interactive, we were particularly interested in whether estate planning is becoming part of those conversations. Many people view wills and trusts as something to address much later in life, after accumulating assets or experiencing a major life event. As a result, estate planning often remains a “someday” task, delayed by uncertainty or avoidance.
Our findings suggest that parenthood may shift this mindset. For this study, we surveyed over 1,000 Americans, half of whom are parents, to examine how financial learning at home is evolving, what parents want the next generation to understand about money, and how having children influences when and why people take steps toward creating an estate plan.
Read on to uncover what we found.
Key Takeaways:
- Ninety-two percent of current and prospective parents said that it was extremely or very important for their children to learn financial literacy.
- When asked about what topics current and prospective parents want to discuss as their children grow vs. what their parents discussed with them, estate planning (349% difference) and investing (346% difference) had the largest gaps.
- The average age at which current and prospective parents plan to begin speaking to their children about financial topics is 10 years old.
- Among respondents 30 years old and older, parents were 76% more likely than non-parents to have an estate plan.
- Sixty-nine percent of current and prospective parents reported a likelihood of discussing their inheritance with their children.
- Among Americans who hope to become parents someday, having children was the most common life event that would prompt them to create an estate plan, with over half recognizing it as so.
The Financial Education Gap
All respondents manage their finances independently, meaning they either primarily handle their own finances or share significant financial responsibilities with a spouse, partner, or family member.
The chart below shows how Americans between the ages of 18 and 76 felt about their ability to manage their own finances when entering adulthood.
A quarter of Americans did not feel at all prepared to manage their finances upon entering adulthood. Twenty-eight percent felt moderately prepared and another 28% felt only slightly prepared.
Meanwhile, 18% entered adulthood with strong confidence, including 14% who felt very prepared and 4% who felt extremely prepared. Taken together, this means over three-quarters started with limited financial readiness.
For generations, money talk was taboo in many households. Discussing income, debt, or financial hardship was often frowned upon. Regardless of a household’s economic status, speaking openly about money could be perceived as bragging in times of success or as a personal failure during periods of financial strain. Money matters were also largely assumed to be adult-only discussions.
As one Baby Boomer respondent shared:
“My parents never discussed financial matters with me or my siblings. It might have helped if they had given us some guidance on saving and managing money. The only indications of our family’s finances were what we bought, when we bought it, and the types of vacations we took.“
Today, the conversation is more nuanced. While many parents still want to shield their children from financial stress, they increasingly recognize the value of modeling healthy money habits and offering age-appropriate explanations along the way. Learning about money and speaking openly about financial matters is now often viewed as empowering.
In fact, 92% of parents with children under 18 years old reported it is very important to them that their children learn financial literacy, suggesting an urge to have the conversations that they may have lacked growing up.
Money Talks with Children
In the chart below, we compare the share of current and prospective parents who plan to discuss different financial subjects with their children to the share of adults who had those conversations themselves growing up.
Everyday spending was the most commonly talked about topic when it came to financial matters growing up, as noted by 50% of surveyed adults. This may include discussions around household bills, groceries, the affordability of certain items, and deciding between wants and needs.
Now, 81% of parents plan to have intentional discussions about this topic with their children. Budgeting (75%), using credit cards responsibly (68%), and saving for emergencies (67%) were other priorities for parents to discuss.
For all financial topics but “everyday spending”, the share of respondents who expressed parental intent was at least twice as high as the share of respondents who reported childhood exposure. Conversations about wills, trusts, and naming beneficiaries saw the largest increase between what respondents experienced growing up and what parents say they plan to discuss with their own children.
Only 6% of respondents reported discussing these topics growing up, compared with 28% who plan to discuss them with their children. This represents a 349% increase, the largest percentage change among all topics.
Investing had the second-highest percentage increase. Only 11% of respondents reported discussing investing growing up, compared with 48% who plan to discuss it with their children, representing a 346% increase.
In this generation, investing is much more accessible than it was decades ago, with the lower and middle classes increasingly participating. The barriers to entry are disappearing with technology enabling commission-free trading and fractional shares through smartphone-based platforms, as well as the widespread sharing of investing knowledge.
On average, parents reported first discussing financial topics with their children at age 9, while new and prospective parents said they plan to begin these conversations around age 10. However, research suggests that children begin forming core financial habits by age seven.
This gap indicates that foundational money behaviors and beliefs may already be taking place prior to parents’ plan. Early conversations can look like introducing basic concepts of saving and spending, giving children small amounts of money to make choices with, or involving them in everyday financial decisions like grocery shopping. Exemplifying healthy financial habits is also ideal.
Discussing Inheritance with Children
Financial discussions don’t end once children are old enough to handle everyday spending. As kids grow, these conversations often shift to more complex topics, such as managing credit, investing, and planning for the future. One of the most significant topics parents may eventually address is inheritance and estate planning.
The chart below breaks down parents’ likelihood to discuss what their children will inherit from them in the future.
68% of parents expressed at least some likelihood of discussing these matters with their children. While some may prefer to keep financial details private, others may use these conversations to avoid future conflict, explain technical aspects of estate planning, or communicate the sentimental value behind certain assets or wishes.
Parenthood and Estate Planning
The chart below compares the share of Americans with an estate plan by parental status.
Children are a major reason many people create a will. While 31% of surveyed Americans reported having an estate plan, such as a will, trust, or both, parents were 2.6 times more likely to have one than non-parents. Forty-six percent of parents reported having an estate plan, compared with just 18% of non-parents.
While age may account for some of this difference, even among respondents 30 years old and older — the average age of first-time mothers in the U.S. as of 2023 — non-parents were still less likely than parents to have an estate plan. Among non-parents 30 or older, only 26% had an estate plan, compared with 46% of parents in the same age group.
Among parents who have an estate plan, such as a will or trust, 44% said they created it around the time of a child’s birth. Another 8% put an estate plan in place before having children, while 48% said its creation did not align with any child’s birth.
Among Americans who hope to become parents someday, having children was the most common life event that would prompt them to create an estate plan. Among adults who do not plan to have children, the top triggers for creating a will were evenly split between reaching a certain age and experiencing a serious medical diagnosis. For current parents, reaching a certain age was the most commonly cited reason.
Why Estate Planning Matters at Every Stage of Life
Creating an estate plan is a smart decision, whether you’re married or single, have children or other dependents, or have none at all. An estate plan helps protect your assets and ensures your wishes are carried out after death. Just as importantly, it can spare loved ones from lengthy legal battles and family conflict. Without one, state laws determine how assets are distributed, which may not reflect your intentions.
An estate plan can cover far more than just asset distribution. For example, it allows you to designate a trusted person to make healthcare decisions if you become incapacitated. Pet owners can name a caregiver and set aside funds for their animals’ care, rather than leaving those decisions to the courts. Those with assets such as a home, investments, or digital accounts, including cryptocurrency and social media, can name beneficiaries to avoid probate delays and unnecessary taxes. This ensures property passes directly to partners, charities, or friends instead of distant relatives under state intestacy laws.
Methodology
We surveyed 1004 Americans. Twenty-five percent of respondents were Baby Boomers, 26% were Gen X, 29% were Millennials, and 21% were Gen Z. Fifty-three percent were women, 46% were men, and 1% were non-binary. Fifty percent of respondents were parents, 17% wanted children in the future, and the remaining had no desire to become parents.
Fair Use Statement
If you know a parent who may find this study relatable, please feel free to share it. We just ask that any online attribution include a link back to this page so readers can reference the full findings.