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Only 8 Percent of Grandparents Are Likely to Talk with Grandchildren about Money and Saving for College, While 85 Percent of Young Adults Say They Are Open to the Conversation
One of the most important ways grandparents can positively impact their grandchildren's saving and spending habits has nothing to do with writing a check. According to a new
The study, conducted in March and
Grandparents Underestimate Their Influence; Grandchildren Value Their Stories
According to the study, only three in 10 grandparents think they can influence their grandchildren's money habits. Yet 73 percent of young adults indicate their grandparents actually do influence their saving and spending habits, and 59 percent rate their grandparents as very good to excellent savers. With 97 percent of young adults concerned about saving for their future, grandparents can make a difference by sharing how their financial decisions - for better or worse - have affected their lives. In fact, the study shows that the No. 1 topic grandchildren would like to talk about with their grandparents is their memories and past experiences, which presents a great opportunity for grandparents to discuss their financial choices within the context of their personal stories.
"Young adults are surprisingly open to talking with their grandparents about money, regardless of the generation gap," said
Coughlin suggests starting these conversations early in childhood. "When you empower children to understand financial decisions, they develop a lifelong sense of confidence and trust in themselves, helping them become successful adults," added Coughlin.
Young Adults Feel Financially Unprepared for College
With the cost of a four-year degree skyrocketing, young adults are very concerned about saving for higher education. Thirty percent indicate they have nothing saved for college. Of those surveyed, only 29 percent report that their grandparents have helped or are helping with their educational expenses.
Half of Grandparents Underestimate Cost of College; One Quarter Help Foot the Bill
Grandparents are largely unaware of the rising costs of a four-year degree. Twenty percent think a four-year education costs
While 66 percent of grandparents surveyed say they don't feel responsible for helping finance their grandchildren's higher education, 23 percent help pay for college. In a supplemental qualitative study, grandparents shared that their willingness to help depends on the habits and maturity of their grandchildren.
"In our focus groups, we found grandparents are willing to help their grandchildren financially, but they want some assurance that their grandchildren have 'skin in the game,'" said Coughlin. "Grandparents need to know their grandchildren are serious about achieving future success through advanced education by using their own money to help pay for at least part of it."
New Tools Available to Foster Money Conversations
To help grandparents and grandchildren ease into conversations about money and saving,
Grandparents Are Unaware of Affordable Ways to Help
Grandparents surveyed also are unaware of affordable ways they can impact their grandchildren's financial future. Specifically, 67 percent of grandparents say they haven't heard of 529 savings plans.
"In addition to grandparents sharing their own financial experiences, 529 college savings plans are an easy and affordable way for grandparents to help their grandchildren save for college," said
A 529 college savings plan is an investment account that allows any earnings on contributions to grow tax-deferred. Withdrawals, if used to pay for qualified higher education expenses, are federal income tax-free. Some states offer additional tax benefits, such as an income tax deduction or tax credit for state residents on plan contributions.
To learn more about the benefits of 529 college savings plans and for tools to help grandparents initiate conversations with their grandchildren about money and saving for college, visit www.AARPCollegeSavings.com.
For more information about the
TIAA-CREF Survey Methodology
The nationwide dual-approach survey was fielded online among 1,000 grandparents age 50 and older with at least one grandchild age 18 to 24. The survey was fielded by
Respondents for this survey were selected from among those who have volunteered to participate in online surveys and polls. Because the sample is based on those who initially self-selected for participation, no estimates of sampling error can be calculated. All sample surveys and polls may be subject to multiple sources of error, including, but not limited to sampling error, coverage error, error associated with non-response, error associated with question wording and response options.
TIAA-CREF Focus Group Methodology
On behalf of
AARP College Savings Solutions from
 From CollegeBoard Trends in College Pricing report for 2013-2014 academic year https://trends.collegeboard.org/college-pricing/figures-tables/average-published-undergraduate-charges-sector-2013-14
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