The 2021 TD Financial Literacy Month Survey Reveals:
- 33% of Canadian parents surveyed aren't confident they're
setting a healthy financial example for their children.
- 10% of Canadian parents surveyed consider their household to
be in "excellent financial health."
- 45% of Canadian parents surveyed don't have a household
budget.
TORONTO, Oct. 19, 2021 /CNW/ - A recent September 2021 Ipsos survey conducted on behalf
of The Toronto-Dominion Bank (TD) ahead of Financial Literacy Month
in Canada, reveals that one-third
(33%) of Canadian parents surveyed aren't confident they're setting
a healthy financial example for their children. The survey also
reveals that only 29 per cent of Canadian parents surveyed consider
their household to be in "excellent" or "good" financial health" –
which includes the ability to pay bills on time, carry manageable
debt, have short and long-term savings, and a financial plan.
"Parents can be the biggest influence on their child's financial
know-how, yet our survey shows many aren't sure about the kind of
example they set for their kids when it comes to money management,"
says Jennifer Bishop, Head of
Financial Health & Education at TD. "Asking for help when it
comes to managing and talking about money can be an important step
towards improving financial health. Speaking to a financial advisor
can help a parent be better prepared to have the "money talk" with
their children and support the development of healthy financial
habits."
Bad Budgeting Habits
Having and maintaining a budget
is a fundamental behavior to achieving good financial health, yet
the TD survey reveals that nearly half (45%) of Canadian parents
surveyed say they do not set a household budget. Setting a budget
now can help set the stage for responsible financial behaviours in
the future, especially for older teenagers who are looking to leave
the nest and are taking on their own financial obligations like
saving for post-secondary education or making their monthly cell
phone or car payments. That way, before this age group flies the
coop, they will understand the benefits of putting in the effort to
create a detailed budget.
According to the TD study, of the parents surveyed that do have
a household budget, only one-in-four parents (25%) believe they
take a thorough approach to their financial planning - indicating
most households aren't planning for the unexpected.
"If the pandemic has taught us anything, it's how important it
is to have a household budget that includes setting aside funds for
emergencies," says Bishop. "The unpredictability of the pandemic
has shown us that it's important to plan for the unexpected. It is
also a good opportunity to start the money conversation with our
children, as it can foster healthy approaches to budgeting for
parents and financial independence for children."
Wants vs Needs
An allowance is a great tool to help
younger children – for example those under 13 - understand the
concept of money and budgeting. According to the TD
survey, nearly a quarter of parents surveyed give their
children an allowance for completing household chores (21%) or as a
reward for good behaviour (5%).
When it comes to parents with kids aged five and up, 28 per cent
of survey respondents say their child does not know the difference
between a want and need. "Kids will often see something, like candy
at a check-out, and want it immediately," says Bishop. "These are
good moments to teach kids the concept of needs versus wants, and
that money is finite. If we buy the chocolate bar now, we won't
have enough money to buy that toy you really want."
When to have the "money talk"
When it
comes to having the money talk, the TD survey reveals a lack of
consensus on timing. One quarter (25%) of Canadian parents surveyed
don't regularly talk to their children about money, with the
primary reason being that they feel their child is too young. Other
reasons for not talking about how to manage money include not
believing it's an important topic for kids or not something they
need to worry about (12%), because they'll learn about finances in
school (11%), or because it's a taboo topic that shouldn't be
discussed with anyone (4%).
The survey also reveals that conversations about finances
between parents and kids are often reactive. Among surveyed
Canadian parents, the most common catalyst for these conversations
is their child receiving money as a gift (27%), when the child
shows interest or asks questions (20%) and when they start getting
an allowance (19%).
"It's never too early to have fun, creative and open
conversations about money with your kids. From counting coins in a
piggy bank to opening-up a first bank account and looking at the
account activity together, there are many ways to involve kids in
managing their finances," says Bishop. "Financial education is
critical, and when children learn to manage money at a young age,
they are more likely to have a long-lasting responsible and healthy
relationship with money as adults."
Building Financial Confidence
As a long-time advocate
and supporter of financial education, TD has several sources of
information available as follows:
- TD Ready Advice provides information and articles on a
variety of financial topics, from how to keep track of day-to-day
expenses to how to navigate the first-time homebuying process.
- TD advisors are available at our TD branches across the
country to help provide personalized advice and help customers with
their financial goals.
- Learn more about how we are supporting Financial Education in
communities across Canada and
the United States by visiting The
TD Ready Commitment Financial Literacy page.
- TD recently announced a CDN $10
million commitment to the Black Opportunity Fund, where
part of the funds will go to Black-serving community and non-profit
organizations focused on areas of financial security.
About the Study
TD Bank Group commissioned Ipsos to
conduct a national online survey of 1,000 Canadian parents aged 18+
with kids under 18 in the house. This poll was conducted
between September 17 and 22,
2021.
About TD Bank Group
The Toronto-Dominion Bank and its subsidiaries are collectively
known as TD Bank Group ("TD" or the "Bank"). TD is the fifth
largest bank in North America by
assets and serves more than 26 million customers in three key
businesses operating in a number of locations in financial centres
around the globe: Canadian Retail, including TD Canada Trust, TD
Auto Finance Canada, TD Wealth (Canada), TD Direct Investing, and TD
Insurance; U.S. Retail, including TD Bank, America's Most
Convenient Bank®, TD Auto Finance U.S., TD Wealth (U.S.), and an
investment in The Charles Schwab Corporation; and Wholesale
Banking, including TD Securities. TD also ranks among the world's
leading online financial services firms, with more than 15 million
active online and mobile customers. TD had CDN$1.7 trillion in assets on July 31, 2021. The Toronto-Dominion Bank trades
under the symbol "TD" on the Toronto and New York Stock Exchanges.
SOURCE TD Bank Group