Breaking the cycle: more than 50 per cent of Canadian parents feel their parents' lack of financial transparency influenced their own money management shortfalls
Mydoh survey finds that practical and fun applications of money management – 'active learning' – could be key to raising more financially adept youth and helping to reduce financial anxiety
TORONTO, Oct. 12, 2022 /CNW/ - A Leger survey conducted on behalf of Mydoh, a youth money management app powered by RBC, reveals over half of Canadian parents (54 per cent) who responded to the survey feel like their parents weren't proactive enough in teaching them about money and budgeting. Consequently, many of the parents (65 per cent) responded that their relationship with money was impacted by their parents' relationship with finances. Overall, this indicates that financial know-how (or lack thereof) and its anxieties can be inherited.
"Money carries a lot of stress for Canadians - women and people of colour particularly - and from the survey, we're seeing that stressors can be passed down through the generations; sometimes unintentionally," said Sammer Haq, Head of Data and Analytics at Mydoh, and Founder and Executive Director at BridgeTO Youth. "However, we have an obligation to the next generation to end the cycle of anxiety and shame that accompanies personal finance, and help kids apply those skills in their own lives."
The Canadian Sentiment
Despite Canada ranking globally amongst the top 10 countries for financial literacy amongst youth, the general sentiment for most Canadians towards their own money management skills is shame, regret, and self-doubt; with 62 per cent of parents surveyed feeling that their mental health has been impacted by their financial situation or decisions - a sentiment disproportionately higher among women (65 per cent).
While 90 per cent of Canadian parents surveyed (with children 6-18) rank basic money management as the main skill they hope their kids will learn – followed by basic soft skills (79 per cent), cooking (57 per cent), housekeeping (40 per cent), and sports/exercise skills (26 per cent) – they are not entirely optimistic about their kids' relationship with finances. Additionally, they do not anticipate being completely free of financial commitment to their kids in adulthood.
"A child's formative years are extremely important, and what we are seeing is that financial habits – both money decisions and anxieties around money – are inherited from their parents, creating an unsustainable generational cycle," continues Haq.
Generational Influences
When it comes to making decisions about their finances and financial well-being, 68 per cent of the parents surveyed reported they wish their parents taught them more about managing finances. In addition, another 46 per cent felt they needed to unlearn unhealthy financial habits – like not having a budget, not saving a set amount each month or going into debt– suggesting the magnitude of generational influences on financial habits. The data also shows that when it came to unlearning unhealthy financial habits, parents who identified as a person of colour felt this generational divide significantly more than their counterparts.
The vast majority of parents surveyed believe that money should be an open dialogue between the whole family (70 per cent), and allowance-based activities, like chores, teach kids important lessons about money (88 per cent). This suggests that today's parents are aware that dialogue alone won't suffice – providing the opportunity to practice real-world money skills is key to raising more confident and financially savvy kids.
"If we are truly going to improve the financial wellbeing of the next generation, parents must be more open to including their kids in money talks and prioritizing the practical application of their money skills," says Angelique de Montbrun, Chief Marketing Officer at Mydoh and mother of three. "By being honest about their own experiences (and limitations), money can become less abstract and daunting to kids and teens."
Proactive (financial) parenting and planning
The data revealed that almost half of those surveyed (49 per cent) find their kids are more curious and motivated to learn about money than they were at that age. Further, 88 per cent of parents believe that an activity-based allowance system (i.e. payment for chores), teaches kids important lessons about money (the value of working for what you earn, learning how to manage income etc.). While kids being paid for household chores isn't new, having a digital tool to simplify the process is key, as many parents acknowledge the advantages of proactively integrating active learning into their kids' routines.
"Whether it's active learning through an app like Mydoh, or having candid discussions in a grocery store, the goal for parents needs to be breaking the cycle. They can do this by proactively planning, as a family, to build these healthy habits together," continues de Montbrun.
A benefit of active learning with gamification is that it can shift the brain from 'work' mode to a more relaxed and receptive state. Rather than feeling overwhelmed or coerced, learning is fun and engaging through a rewards-based system that reinforces good financial choices.
"Canadian parents are breaking some of these generational taboos – particularly around talking about money, but actually being transparent about their financial habits, and understanding of their financial well-being. Mydoh wants to further support that by giving families the practical tools and resources that will further help develop the skills they need – like healthy money management habits – to have a financially stress-free adulthood," continues de Montbrun. "We know Canadian parents can do that as a family unit, through financial transparency, practical application and really, having fun with their kids as it relates to learning about money."
Mydoh is an RBCx portfolio company, benefitting from the freedom to pursue daring ideas within RBC's tech innovation arm, while being fully backed by one of the world's largest financial institutions. Since Mydoh's full brand launch in 2021, the company has helped over 80,000 Canadians become more financially literate. Find out more about how Mydoh is helping the next generation of Canadians gain real money skills at mydoh.ca.
Mydoh commissioned Leger to conduct an online survey of 1,500 Canadian parents of kids aged 6-18 across all provinces, except Quebec. It was completed between June 6-17, 2022, using Leger's online panel. No margin of error can be associated with a non-probability sample (i.e. a web panel in this case). For comparative purposes, though, a probability sample of 1500 respondents would have a margin of error of ±2.5%, 19 times out of 20.
Since 2019, Mydoh has been committed to helping parents raise money-smart kids. Mydoh began with the shared belief that money management isn't something you are taught, as much as something you learn through experience – and that experience should start early. Kids learn money basics through play, earn their own money through tasks, and spend it wisely using their Mydoh Smart Card. Parents can see their kids' spending activity and control how involved they want to be. Mydoh has championed these beliefs since its inception and with it, has been able to help over 80,000 families build a more solid financial foundation for the next generation. Mydoh has also been recognized as an inspiring place to work, being recently ranked 11th overall in the Top 50 Inspiring Workplaces in North America for 2022. Learn more at mydoh.ca.
RBCx powers bold ideas, founders, and technology companies. We know building great businesses takes more than just finance, which is why our four pillars – Banking, Capital, Platform, and Ventures – combine to make us the go-to backer of Canadian innovation. We use our deep expertise to support businesses of all sizes and stages, and leverage RBC's extensive experience, networks, and capital to solve tomorrow's big problems.
Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 92,000+ employees who leverage their imaginations and insights to bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada's biggest bank and one of the largest in the world, based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our 17 million clients in Canada, the U.S. and 27 other countries. Learn more at rbc.com.
We are proud to support a broad range of community initiatives through donations, community investments and employee volunteer activities. See how at rbc.com/community-social-impact.
Leger is the largest Canadian-owned full-service market research firm. Leger's online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. Stringent quality assurance measures allow Leger to achieve the high-quality standards set by the company. As a result, its methods of data collection and storage outperform the norms set by WAPOR (The World Association for Public Opinion Research). These measures are applied at every stage of the project: from data collection to processing, through to analysis. Leger aims to answer their clients' needs with honesty, total confidentiality, and integrity.
SOURCE RBC
Victoria Mattacchione, APEX PR for Mydoh, [email protected], 647-825-5344
Partager cet article