Survey: You’re more likely to get a raise if you learned about money as a kid
Key takeaways
- Americans who grew up with a strong financial education were 1.5 times more likely to successfully negotiate pay raises during their careers compared to those without early exposure to financial education (66 percent vs. 39 percent)
- Americans who were raised with a strong financial education were more likely to implement healthy financial habits as adults over the last year.
- Financial experts advise parents to initiate money conversations with their children as early as possible to normalize thinking about and discussing financial planning.
For Julia Rothacker, conversations around the dinner table with her family centered around topics that many families don’t typically discuss.
Rothacker, 31, director of business and operations at Public, an investing app, recalls her parents bringing up the importance of budgeting, saving for college and investing from an early age.
“I was taught to balance long-term goals and short-term wants,” Rothacker said. “ When I was a kid asking for a toy at the zoo, I was told ‘No.’ But they made it clear to me why. It was because they wanted to be able to send my sister and me to great colleges. They really believed in education as a financial goal.”
Trading that toy for a lesson about money was part of an early financial education that continues to pay off for Rothacker as an adult. She’s not alone.
Bankrate’s new Financial Habits Survey suggests that the way you’re raised plays a big role in shaping your relationship with money later in life. It found that people who grew up with a strong financial education were more likely than others to successfully negotiate their pay later in life once they started their careers. They were also more likely to implement healthy financial habits as adults.
I really think it’s important to open up that [money] conversation. If you do, kids will be more comfortable with their finances. It leads to confidence.
— Jen Hemphill, an accredited financial counselor and host of the Her Dinero Matters podcast
Exposure to financial education among Americans in their youth
Bankrate calibrated the survey to compare the financial experiences of Americans who were raised with and without an emphasis on learning about money. The survey asked nine questions about Americans’ financial experiences while growing up and then identified respondents as being raised with a “strong financial education” if they answered “often” or “sometimes” to at least five out of the nine questions.
Survey respondents were asked whether they:
- Worked a pay-earning job before the age of 18
- Applied for a part-time job
- Earned an allowance for doing chores
- Managed a personal/joint bank account
- Budgeted for a big expense
- Paid off a debt with their own money
- Learned about personal finance topics in school (e.g. budgeting, savings, etc.)
- Talked to parents about money (including how to manage money, budgeting strategies)
- Invested in the stock market (including learning about it).
Altogether, 46 percent of Americans met this standard of receiving a strong financial education, and 54 percent did not. We also asked respondents about their success rates when negotiating for pay raises and their financial habits over the last year.
Percentages are rounded throughout the article and may not add to 100 percent.
Early financial education linked to successful salary negotiation
The survey, which gathered responses from more than 2,600 U.S. adults, found that respondents who had a variety of financial experiences in their youth, such as a part-time job or a bank account, were 1.5 times more likely than others to have successfully negotiated a raise as an adult worker (66 percent vs. 39 percent).
Of those who have a strong financial education and have successfully negotiated pay raises during their careers, 66 percent said they have successfully negotiated a pay raise at least once every five to 10 years, including 60 percent who have done so at least every few years, 33 percent who have done so at least once a year and 10 percent who have done it more than once a year.
Conversely, Americans who were raised with little to no financial education were much less likely to successfully negotiate a pay raise. Only 39 percent of respondents in that group have successfully negotiated a pay raise during their careers. That includes:
- 3 percent who have done so more than once a year
- 17 percent who have done so at least once a year
- 33 percent who have done so at least once every few years
- 39 percent who have done so at least once every 5-10 years
Forty percent of Americans who had little to no exposure to financial education during their youth said they have never successfully negotiated a pay raise, compared to 22 percent of Americans with a strong financial education.
According to a Fidelity Investments study, nearly 60 percent of Americans accept the first salary figure quoted to them, but 87 percent of those who negotiated got at least some of what they requested. By effectively negotiating your salary, you can ensure you’re getting paid fairly for your skills and set a strong foundation for future earnings.
Americans with a strong financial upbringing are more likely to embrace healthy financial habits.
Money can feel like a taboo in a lot of households, but breaking that silence can have a positive effect on your kids’ financial habits once they’re adults.
Those who were raised with a financial education were also more likely than others to say they have practiced better financial habits over the last year (i.e. since January 2024).
For example, survey respondents who had received a strong financial upbringing were also more likely to say they paid their bills on time (80 percent vs. 76 percent), saved money for the future (57 percent vs. 43 percent) and invested in the stock market (29 percent vs. 18 percent).
Financial experts recommend taking these five steps to establish a monthly budget for the first time:
- Calculate your monthly income
- Track your spending for three months
- Think about your financial priorities
- Design your budget (i.e. input your numbers in a spreadsheet or a budgeting app) and determine your budgeting method (i.e. 50/20/30 rule, zero-based budgeting, etc.)
- Track your spending and refine your budget as needed
Men vs. women
The survey found that men were more likely than women to be categorized as having a strong financial education while growing up, at 50 percent for men vs. 42 percent for women. Men were also more likely to have benefited from it.
Among those respondents who were raised with a financial education, for example, 7 in 10 men (70 percent) said they have successfully negotiated pay raises during their careers, compared with 62 percent of women.
If you’d like to better understand the salary offer, ask what went into calculating the figure and if the number is negotiable. Think about what you deserve based on your skills and experience and be prepared to explain why that is the appropriate amount. During the negotiation, leverage market research and conversations with industry peers to back up your points. Practice what you’re going to say in front of the mirror or with a friend to increase your chances of a successful outcome.
The survey also found that men who were raised with a strong financial education were slightly more likely than women with a similar background to have practiced healthy financial habits over the past year. Here’s how the two groups compare:
“I now appreciate the valuable lesson my parents instilled about the importance of financial responsibility”
Kathleen Meanor, a senior account manager at Bankrate, said she’s grateful that her parents taught her about money and talked openly about finances when she was growing up.
During middle school, Kathleen Meanors’ parents set up a credit card and checking account for her. She began earning money by walking neighbors’ dogs, and she needed a secure place to save that income. When she made her first $100, she gave herself $40 for personal use and deposited the rest in the bank.
“Wells Fargo was where I had my first bank account,” she said. “Initially, I was frustrated because I wanted to spend it all, but I now appreciate the valuable lesson my parents instilled about the importance of financial responsibility.”
In high school, as she started driving and landed her first job, the same principle applied. She would allocate 20 to 30 percent of her paycheck to personal expenses and save the rest. She also learned to balance her budget every month, tracking expenses such as takeout, coffee and gas stations.
“Though these were minor expenses, this practice taught me to monitor my monthly spending habits,” Meanor said.
It also taught her how to save for important financial goals. Over the last few years, Meanor had steadily built up 6 months’ worth of expenses in her emergency savings fund, which she, in turn, was able to tap into last year when she was hit with multiple unforeseen expenses, including vet bills and a new roof for her townhouse in Charlotte, North Carolina. She was able to avoid going into high-interest credit card debt because of her well-stocked emergency fund.
“I have to say ‘no’ to more travel plans this year and be a lot stricter with my spending because of how much I had to spend last year,” she said. “Overall, I do my best to live below my means and save.”
How parents can approach money conversations with their kids
Financial experts Jen Hemphill and Jamie Bosse shared their top tips for how parents can practice and promote financial literacy with their kids regularly.
Take real-life examples and turn them into teachable moments
If you want to teach your kids about money, start by including them in the conversation as much as possible, according to Hemphill and Bosse. Hemphill, an accredited financial counselor and host of the “Her Dinero Matters” podcast, recommends parents take pressure off themselves to sit down and have formal money conversations and instead look for teachable moments in everyday life.
“Make a conversation out of finances, whether you’re out grocery shopping or out shopping with your kids. Take those moments and make them teachable moments. It could be that you’re looking for some socks and teaching them how to comparison shop.”
Hemphill suggests making it feel like a two-way conversation: Teach money concepts to your kids, but also ask them questions. “That’s how you know what they understand and what they don’t,” she said.
Bosse, a financial planner at CGN Advisors in Manhattan, Kansas, said there’s a lot of power in transforming ordinary moments into financial lessons and doing activities with your kids that involve learning about money. She said it’s important to make learning about money fun for kids.
“ You can make it fun,” Bosse said. “You can read a book about money. You can play a game about money. Or maybe do an activity together. You could just use real-life examples.”
Tailor your approach to financial literacy by age
There is no one-size-fits-all approach when teaching financial literacy to your kids. What matters most is that parents are creating space in their households to have healthy dialogues about money as early as possible, and that will look a little different for every family.
Bosse, author of “Money Boss Mom” and “Milton the Money Savvy Pup,” said parents should tailor any money conversations or activities to be age-appropriate. Between ages three and five, she recommends parents teach their kids the basics: money is a tool for buying things, for example, and you can earn money by working.
Conversely, for kids ages 9-12, she recommends parents discuss the importance of saving money and introduce how to use a bank account to keep money safe. As your kids become teenagers, that’s a good time to talk about more complex money topics, such as earning a paycheck, taxes, credit scores and investing for the future.
If you’re looking for downloadable games, worksheets and coloring pages to use with your kids, Bosse has created several that touch on budgeting, saving and more.
Hemphill and Bosse also recommend giving kids the opportunity to gain some experience with earning their own money and managing their own money, whether that’s tied to paid chores or not. The allowance debate is one that has been around for a long time. Bosse and Hemphill said they see both sides: Some parents don’t believe in assigning financial value to essential household duties, while others argue it’s effective.
“ When it comes to an allowance, I think that’s a personal decision for families,” Hemphill said. “Part of that is understanding your kids. For some kids, that allowance may be a motivator. For others, it may not be.”
A tactic that parents could try is a give-save-spend piggy bank. Hemphill said it can be an effective tool – especially for younger ones – to start thinking about budgeting, saving and financial goal-setting. If your child gets money, whether it’s from the tooth fairy or a monthly allowance, discuss with your child the best way to divide their funds. Hemphill recommends teaching kids to have goals attached to their money, instead of just telling them to save.
“Have some sort of guidance, whether it’s saving 10 or 20 percent. I think it’s also important to be really clear about what the savings are for. Or if they’re investing, explain why they’re investing,” Hemphill said.
It’s never too early or late to start discussing money
If there’s one thing Hemphill and Bosse want parents to know, it’s that it’s never too late to start talking about money with your kids. They said many parents are hesitant to talk to their kids about money because they’ve been taught it’s taboo or feel anxiety about money.
They said many parents also think, because they aren’t the perfect example with their money, that they shouldn’t be teaching their kids about it. Hemphill and Bosse advise parents to break that silence as early as possible and change generational thoughts around money. It can also be beneficial for parents to share money mistakes they’ve made in the past and what they learned from those experiences with their kids.
“If your kids are going to college, maybe it would have been better to talk to them about money when they were younger, but the next best time is right now,” Bosse said. “Mistakes and failure can be a really powerful learning tool, too. View mistakes as learning opportunities with your kids.”
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