Family looking at investing app

Nov 11, 2021

New survey finds many parents of teens are lacking investing confidence, too

Earlier this year, we fielded a national survey that found nearly 90% of teens were interested in investing (hooray, step one!) But, almost half said they haven’t invested because they don’t feel confident. Our go-to confidence booster? Knowledge. 

Yep, three-quarters of teens said they wished they had more education, and that made us wonder… how do their parents feel about investing? We know that families = the foundation of financial knowledge for their kids, so we got to work on a new survey of more than 2,000 respondents in the United States. About half were teens, and the other half were parents of teens. 

The results are in. Parents and teens alike lack knowledge and confidence in investing.  Only 55% of parents said they’re comfortable with their investing knowledge — about the same as the teens. And only 37% of parents said they’re extremely or very confident in teaching their children about investing. 

Read on for more about what we learned, and how we’re enabling families to learn about investing together. 

Impact of education 

Statistic: 88% of parents wish they had more finance education earlier in life

One fact that’s clear as day — most parents wish they had more financial education earlier in life, at 88%. And teens aren’t far behind, with 73% wanting more education sooner. 

We get why an earlier start is best — it’s key to our mission, after all. Investing early is fundamental to building wealth over the long term. The more time your investment has to grow, the more money it has a chance to earn. 

The stock market historically moves upward over time, and with the power of compounding, you’re earning annual returns on your past year’s returns. Still, more than half (58%) of parents and teens are intimidated by investing, regardless of age. And they aren’t talking about it together very often. In fact, half of teens (49%) say they have not talked about investing with their parents at all.

What’s the number one blocker keeping people from investing more? 52% of parents and 60% of teens said it’s because they don’t know enough. We’re on it.

Investing for the long-term

Statistic: 51% of parents who invest hold investments for an average of only 6 months or less.

The best way to build a solid financial future — whether it’s saving for college, a home, retirement or a big unexpected expense at any time — is to prioritize the long-term. Usually, investors who trade for quick profits don’t actually end up making money. 

Many of the survey respondents learned this firsthand. Among those who invest, 78% of teens and 51% of parents said they hold investments for an average of only 6 months or less. And both parents (65%) and teen investors (59%) have lost money on a short-term investment. 

The majority of parents (62%) and half of teens (53%) consider investing similar to gambling. While everyone’s risk tolerance varies, that’s not the way Greenlight wants families to invest. Because we have our eyes on the future.

Planning for the future

Statistic: 52% have little to no savings for their children’s future; only 13% have enough or more than enough saved.

We know how it can go... setting aside money for the future can be a challenge. When you’re raising a family, financial needs often pop up. Money earmarked for your children may need to be used for other, pressing expenses.

Nearly 3 out of 4 parents (71%) worry about supporting their children’s future life events, like college education. Half of teens (47%) are equally worried their parents won't be able to contribute. 

But it’s top of mind for them. Even though only 20% of parents surveyed have an account for their children’s college education, many parents prioritize it nearly as high as their own retirement (68% retirement, 60% children’s future). So, how to bridge the gap?

Start here. Start now

Statistic: Kids are thinking twice before spending their allowance money. First instinct: Save it 63%, Spend it 19%, Invest it 11%, Donate it 6%.

With the right knowledge and skills, everyone can invest. The first step is setting aside the money. For parents, that could be cutting back on spending, reducing bills or eliminating debt. For teens, 63% said their first instinct when receiving allowance money is to save. That’s a great start! Investing that money could help it grow even more.   

Investing with Greenlight can help your kids grow up to be financially-healthy. And BIG NEWS! Coming later this year … parents can invest alongside their kids in the app! In your Parent Dashboard, you’ll find investing research, analyst insights and educational content, like this fundamentals of investing glossary.

Some other things to know about investing with Greenlight...

  • Not sure where to start? We’ll give you ETF recommendations based on your timeline and goals.

  • You don’t need a big chunk of change to invest. You can invest in fractional shares and ETFs for as little as $1.

  • When it’s time to put those investments to work, you can use them however you’d like — without fees or spending restrictions.

Want to get your family learning more now? Play along with our Kahoot! lesson on stock research. We’ll let you know when it’s time to set up your Invest Profile in the app.

Try today. Our treat.

After your one-month trial, plans start at just $4.99/month for the whole family. Includes up to five kids.

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