MONEY mobile banking

How Millennials Will Change the Way You Bank

woman with iphone image of her mouth in front of her mouth
The mobile generation wants to do everything with pictures instead of words, including paying bills and depositing checks. Maciej Toporowicz—Getty Images/Flickr Select

Nearly all young adults carry a smartphone and prize the camera as its key feature — not just for selfies, but as a means to conduct their life without words.

If a picture is worth 1,000 words, soon we may not need words anymore. Nearly nine in 10 young adults are never without their smartphone, and a similar percentage say the camera function is among the most important features, new research shows. This love of the visual has broad implications for all businesses, perhaps most notably banking.

The youngest millennials have almost no memory of cell phones without cameras. They post pictures to avoid writing about events in their lives and snap photos as reminders to perform ordinary tasks. A third of all pictures taken are selfies, according to a report from Mitek Systems and polling firm Zogby Analytics.

This generation wants to do everything with a snapshot—from clicking a picture for online purchases to depositing money or paying a bill by snapping an image of a check or invoice. Four in five millennials say it is important for retailers to have a high quality mobile app; nearly nine in 10 either have or would deposit money in their bank with mobile technology, the report found.

“There is a substantial disconnect between what young people have come to expect and the often horrendous consumer experience they get with mobile,” says Scott Carter, chief marketing officer at Mitek. Banks have been among the slowest to respond, he says. About half of consumers who try to open a bank account online give up because it is so tedious, Carter says.

A bank that adopts more sweeping image technology such as facial recognition or fingerprint identification and uses it to replace passwords and the need to fill in account numbers would be a big winner—and not necessarily just with the younger set. Mobile banking is taking off with all generations. Only 12 million people used mobile banking services in 2009, according to Frost & Sullivan, a research firm. That number was expected to hit 45 million this year.

More than one in eight Americans have deposited a check within the past year using a mobile app, the American Bankers Association found. Of those, 80% use the app at least once a month. Other findings from the Mitek survey of millennials:

  • 34% have deposited a check by taking a picture
  • 54% would pay for goods using their smartphone as a mobile wallet instead of credit cards
  • 45% would pay a bill by taking a picture if the technology were available to them, vs. the 21% who do so now
  • 36% have switched where they do business based on a company’s mobile app
  • 60% believe that in the next five years everything will be done on mobile devices, much of it through images

We will never be a wordless society. But just think about those awful assembly instructions that come with a box of parts at IKEA or Target. If a YouTube video or other image makes it easier, why fight? A lot of people think of banking and personal finance the same way—and for them, a picture really is worth 1,000 words.

MONEY Kids and Money

Why More Parents Are Talking to Toddlers About Money

toddler counting pennies on table
Derek Henthorn—Corbis

The money talk is occurring as young as age 3. Here's how that could change the world.

Talking about money at home has long been a taboo subject. But the Great Recession changed that, and now we’re seeing evidence of more open discourse—and maybe even a payoff.

Nearly two-thirds of parents with children between the ages of 4 and 12 pay their kids an allowance to teach them basic money management lessons, according to a survey from discount website couponcodespro.com. On average, these parents began teaching their kids the value of money at age 3, the survey found.

In a similar study two years ago, the American Institute of Certified Public Accountants found about the same percentage of parents using allowance as a teaching tool. But they did not start as early. In that study, kids typically received allowance by age 8. In another study, fund company T. Rowe Price found that 73% of parents talk to their kids regularly about money—and about one in five stepped up the frequency since the financial crisis.

Talking more openly about money inside the household is one of the recession’s silver linings. Many families experienced such a financial blow that they could not avoid the discussion. But even setting aside the recession, starting earlier and talking more frequently makes a lot of sense. In the online world, kids begin making money decisions earlier than previous generations, and when they come of age they will have far fewer safety nets. They need to begin saving with their first paycheck and never stop.

The most common money conversations between youngsters and parents revolve around saving in a piggy bank (73%), working for pay around the house (66%), budgeting for things the kids want (57%), and finding bargains at the grocery store (29%), according to the couponcodespro.com survey. The survey also found that the average weekly allowance across the age group was $13.50, which is higher than the often-recommended rate of 50¢ to $1 per week per years since birth.

The survey also found that 73% of parents paying an allowance admit to buying their kids treats, a practice that can undermine the value of paying allowance in the first place. “Sweets and clothes I can understand,” says Nick Swan, CEO of couponcodespro.com. “But buying them toys for no reason when they are being given an allowance can backtrack on everything they are trying to teach their children about money.”

Still, money talk may be beginning to make a difference. In a recent survey of Gen Z teens (aged 13 to 17), Better Homes and Gardens Real Estate found that half say they know more about money than their parents did at their age. Two-thirds attribute their knowledge of money matters to discussions in the home, and two in five credit discussions in school. Three in five have already begun saving.

This youngest generation also seems to be managing credit cards more adeptly than their older cousins, the Millennials. These are encouraging trends that, if they persist, will help the economy long term and may just insulate this youngest generation from another crisis.

 

 

 

MONEY First-Time Dad

Why Millennials Should Have Kids—and Soon

Luke Tepper
Yes, he costs a ton, but he's worth it.

There are plenty of financial and lifestyle reasons to not have a child, but there are also costs to delaying or forgoing, notes MONEY reporter and first-time dad Taylor Tepper.

I finally realized that I’m no longer in charge of my own life a few of weeks ago.

It was a Tuesday at 9:45 p.m. I had arrived home from work at 7:30, just as my wife was putting our son to sleep.

I cooked dinner for the two of us. We ate together on our small dining room table and then spent the rest of the night preparing for tomorrow. Mrs. Tepper collected Luke’s toys and straightened up around the house while I programmed the coffee maker and started to load the dishwasher… only to discover that we were out of soap. Sigh.

I jabbed my feet into my slippers. The dishes needed to be washed, so I found myself headed outside in my pajamas.

As I plodded to my neighborhood grocery store, it dawned on me that I wasn’t running this chore because I wanted to, but because our delicate family ecosystem demanded that the dishes get washed at night. Otherwise, the milk bottles and containers wouldn’t be ready by the morning, meaning my wife wouldn’t be able to pump at work and my son wouldn’t be able to eat.

This two-hour spell of cleaning, organizing, and readying felt like the actualization of a Millennial nightmare.

I had handed over the keys to my liberty to an infant. Before Luke was born, I could sleep all morning, grab a pint whenever I wanted or fly around the country to visit friends. I could quit my job, write a novel, start an artisanal pickled beet company or simply toss a Frisbee in the park all day.

Those days are over. Full stop. But the real question is: Would I ever want them back?

The opportunity cost of having kids

Most people of my generation aren’t like me. In fact, just over one-in-four Millennials tied the knot between the ages of 18 to 32, according to Pew Research Center. That’s 10 percentage points lower than Gen Xers at a similar point in their lives in 1997 and more than 20 points below Baby Boomers in 1980.

Further, research by Wharton School of University of Pennsylvania’s Stewart Friedman seems to indicate that the majority of my peers aren’t interested in kids. Friedman’s study looked at the views Generation Xers had toward bearing children as they graduated college in 1992 and Millennials in 2012. Almost eight in 10 Gen Xers said they planned to reproduce, Friedman found, compared to only 42% of Millennials.

Parenthood comes with a price that Millennials may not be eager to pay. According to the most recent numbers from the U.S. Department of Agriculture, it will cost middle-income moms and dads an average $245,340 to raise one child up to age 18—a stunningly large figure for those who are already burdened by student debt and who graduated into a nasty Recession.

It doesn’t help that America is one of two countries without any kind of paid maternity leave and childcare is very expensive.

Another factor that might dissuade Y women: Mothers who alter their career paths to care for their children can lose out on a lot of potential income. Economist Bryan Caplan pegs the opportunity cost as high as $1 million.

And, of course, there are the non-financial opportunity costs of bearing children: less freedom, less time, and less sanity.

The payoff of having kids early

I understand all of this. I’m living it. My wife and I spend the vast amount of our weekends doing the laundry, sweeping, mopping, shopping and organizing. We schlep and push and haul all day long. Not to mention the $1,600 a month we’re giving to someone else to care for our child. We could have put that money toward a dream vacation, a starter home… or alcohol.

But conceiving a family in your 20s comes with certain advantages. For instance when Luke leaves the nest, my wife and I will be in our mid-40’s and just entering our peak earning years. That means while he’s off at college, we can power save to boost our retirement portfolio.

Plus, you’re more likely to have flexibility at work in your 20s, since you probably have a more junior position with less responsibility. The higher up you get on the food chain, the tougher it is to leave early to go to a parent-teacher conference or soccer game (or so my older colleagues tell me).

There’s also the fact that your ability to actually conceive children decreases as you age, per the Mayo Clinic, while the risks of complication—from C-sections to pregnancy loss—increase in your mid-to-late 30’s. And complications typically mean more money for health expenses.

Look, there are many reasons not to have a child. You may simply not want one—and that’s fine.

But to dismiss the idea of raising a child, or raising him now as opposed to ten years in the future, because you haven’t yet traveled the world or written that magnum opus slightly misses the point of it all. When you raise a child, especially with someone you’ve committed your life to, your self-interest becomes tied up in theirs.

To put it another way, what a lot of people don’t think about is that there’s an opportunity cost to deciding not to have a child: You don’t get to experience the sublime joy of yielding your wants and desires for the happiness of the people you love.

Taylor Tepper is a reporter at Money. His column on being a new dad, a millennial, and (pretty) broke appears weekly. More First-Time Dad:

MONEY Kids and Money

The Surprising Thing Gen Z Wants to Do With Its Money

Teen in front of home
Getty Images

More than half of teens would give up social media for a year and do double the homework if it guaranteed they’d be able to buy a house when they're older.

During the Great Recession, home ownership took a beating as the ideal for the American dream. The median home nationally lost a quarter of its value, prompting adults of all ages to adopt other elusive goals—like retiring on time for boomers or working on their own terms for millennials.

Just 65% of Americans own their home, down from 69% pre-bust. And four out of five Americans are rethinking the reasons they’d want to buy a house in the first place. But Generation Z—also known as post-millennials, born after the 1990s Internet bubble— seems to prize home ownership like no generation since their great-grandparents.

An astounding 97% of post-millennials believe they will one day own a home; 82% say it is the most important part of the American dream, according to a survey of teens age 13 to 17 by Better Homes and Gardens Real Estate. More than half would give up social media for a year and do double the homework if it guaranteed they’d be able to buy a house.

This yearning stands in starkest contrast to the aspirations of millennials, older cousins who pretty much created the sharing economy and in large numbers prefer to rent. The housing bust and foreclosure epidemic scarred millennials, probably for life, as some watched parents and neighbors lose everything. In a key part of this generation—heads of households age 25 to 34—renters increased by more than 1 million in the years following the crisis, while the number who own a home fell by 1.4 million.

Post-millennials saw the carnage, too, though at a tender age that left them more confused than traumatized. Where millennials hardened and vowed never to repeat the errors of their parents, post-millennials sought the comfort of family and togetherness, says Sherry Chris, CEO of Better Homes and Gardens. “Many of these Gen Z teens were 7 to 11 years old when the recession hit,” Chris said. “At that age, children equate home with stability.”

The innate quest for stability leads them to prize a family home above things like going to college, getting married, having children, or owning a business, according to the survey. And the dream appears firmly grounded in reality. Chris observed that today’s teens have more information than any previous generation at their age and show early signs of financial awareness. Asked for an estimate of what they might spend on a house, the 97% who aspire to be owners gave an average response of $274,323—strikingly close to the median home value of $273,500.

Half say they know more about money than their parents did at their age. Two-thirds attribute their knowledge of money matters to discussions in the home, and two in five credit discussions in school. Three in five teens have already begun saving, the survey found. Post-millennials, on average, aim to own a home by age 28—three years earlier than the median age of first-time homebuyers reported by the National Association of Realtors.

These are encouraging findings. A home remains most Americans’ single largest asset, and while the housing bust will have lingering effects, home prices nationally tend to rise every year—and have been trending up again the past few years. Not all of the news is good: Only 17% of post-millennials believe stocks are the best long-term investment; half prefer a simple savings account, TD Ameritrade found in a survey that defines the generation as slightly older (up to age 24).

But the TD survey also found that post-millennials have half the post-college credit card debt of millennials. And the Better Homes survey suggests that our youngest generation is at last learning more about money at an early age, which is the goal of a broad public-private financial education movement. A generation of financially adept youth who begin to save and gather assets that will grow for four or five decades is the surest way to avoid another meltdown and solve the retirement savings crisis.

Related:
Why Gen X Feels Lousy About the Recession and Retirement
Our Retirement Savings Crisis—and the Easy Solution

MONEY Kids and Money

The Financial Challenges of Solo Parenting After 40

Single mother in her 40s at grocery store
Slobo—Getty Images

More single women over 40 are choosing to have children, a new study finds. Why taking on that cost on your own can be daunting.

Monica Kipiniak doesn’t think of herself as a statistic. She just thinks of herself as a doting mom.

The 46-year-old attorney from Brooklyn, N.Y. is indeed part of a societal trend: Single women by choice having kids past the age of 40.

“It used to be seen as such a radical thing,” says Kipiniak, mom to a 10-year-old son and a six-year-old daughter. “But now it’s almost commonplace. If somebody’s not married by the age of 40, and they want children, they just go ahead and do it.”

Indeed, the numbers bear out her observations. Birth rates for unmarried women over 40 have been heading up in recent years, according to new data compiled by the National Center for Health Statistics, a division of the Centers for Disease Control.

In fact, in 2012, the rate was a full 29% higher than just five years earlier.

The reason why that figure leaps out: In other age groups, the rate of births to unmarried women has been heading in the exact opposite direction.

“The gist of the report was that nonmarital childbearing has declined recently,” says Sally Curtin, a statistician and the report’s co-author. “For all women under age 35, rates are down.”

A Costly Endeavor

To be sure, ‘unmarried’ can mean a lot of different things. It can mean single and never-married, or divorced, or coupled and co-habiting but not yet hitched.

What is common to many over-40 single parents: the financial challenges involved.

“There’s no question that raising two kids by myself in New York City is a struggle,” says Kipiniak, who had children via anonymous sperm donor. “Often I’m flying by the seat of my pants, waiting at the end of the month for checks to come in.”

After all, according to the U.S. Department of Agriculture, a middle-income family having a child in 2013 will lay out more than $240,000 before the kid turns 18. And that’s not even including college.

Such costs are obviously towering, even for married couples comprised of two earners. For single parents who are raising a child on their own, the challenges can be even more formidable.

Financial planner Carolyn Ozcan of Ithaka Financial Planning in Mattapoisett, Mass. helps many clients in this position and has tabulated some of the costs.

  • In-vitro fertilization, for moms who choose that route: $15,000 per cycle, sometimes requiring multiple cycles, which may or may not be covered by insurance.
  • Adoption: between $10,000 and $40,000.
  • Daycare or nannies, since working singles may not have partners to help cover childcare gaps: between $1,000 and $2,500 per month.

That means many single-mothers-by-choice are facing unique and significant costs right out of the gate. As a result, Ozcan says they need to be hyper-vigilant when it comes to planning and budgeting.

“A woman planning for single motherhood should have a sizable emergency fund,” Ozcan says. “I would recommend a year’s worth of living expenses, including childcare expenses in case of job loss or extended illness.”

Another tip from Ozcan: Secure disability insurance. It tends to be inexpensive if acquired through a workplace plan, and rather pricey for individuals ($200 to $500 per month), but well worth it in the long run.

“The worst nightmare is for the mother to get an illness or injury that prevents her from working,” Ozcan says. “If she could not work for years or ever again, she needs to have to have income protection to provide for herself and her child.”

What’s Behind the Numbers

So what’s behind the baby blitz among over-40 singles? A combination of medical advances and lessened social stigma of having a baby outside of marriage make middle-age childbearing more prevalent than in the past.

It’s also true that those who feel prepared for such a challenge are those who have been able to accumulate some financial resources, and are still in the prime of their careers.

“There is now less stigma overall linked with births outside of marriage,” says Jennifer Manlove, a senior research scientist at the Bethesda, Md.-based research center Child Trends.

“Nonmarital births are becoming increasingly normative,” Manlove says. “And some of the largest increases have been to the most advantaged women – older women, white women, and more educated women.”

Even pop culture has been helping to expand traditional images of motherhood, with boldface names like Sandra Bullock and Charlize Theron raising kids as single moms.

One key difference: Hollywood stars tend to have massive financial resources at their disposal. For regular folks like Monica Kipiniak, to achieve her dream of motherhood, it’s been much more of a financial hill to climb.

“But one of the great things about becoming an older mom is that you’re so grateful for it and love every moment,” Kipiniak says.

More on the cost of raising a child:

MONEY Kids and Money

Ace a Personal Finance Game, Win a College Scholarship

H&R Block is the latest financial firm with a program to teach kids about money. This one can earn students a college scholarship.

As the financial industry has worked to restore its image since the meltdown six years ago, one popular approach has been underwriting financial education programs aimed at teens and young adults. Tax preparer H&R Block unveiled its salvo on Monday, offering $3 million in college scholarships to high school students who ace an online budget game.

Block joins a bunch of national and regional banks from Bank of America to Key and FirstBank that sponsor some kind of financial education program. Credit-card company Visa and accounting giant PwC have made big commitments to youth financial education. The result of this broad push has been a disparate and often questioned effort to teach young people practical money skills while the financial industry nurses a badly damaged reputation.

Block is not a bank or credit company. It never sold anyone an exploding subprime mortgage. Still, when the company began looking around for a signature cause it landed fairly quickly on financial education for youth. “It’s appalling how clueless many teens are about money,” says Block CEO William Cobb.

He makes no apologies that Block’s “budget challenge” is as much about smart marketing as it is about helping teens get smart about money. The challenge concludes on Tax Day, April 15. But Cobb says educating high school kids about student loans and more is also “the right thing to do” and is “at the emotional center” of what the company stands for.

In a recent PISA assessment spanning 18 countries, the first of its kind, American 15-year-olds were found to be just average in terms of money know-how. Numerous other studies have shown that young people have a flunking knowledge of things like compound growth, inflation, taxes, investing and budgets.

Block’s program is built around an online game that simulates real world decisions. It is designed as part of a class with a teacher augmenting lessons that adhere to the Jumpstart Coalition’s standards for youth personal finance instruction and the Council for Economic Education’s standards for financial literacy.

The carrot for high school students is a college scholarship. The first challenge will begin Oct. 3 and last for nine weeks. Five more challenges will run through mid-April next year. Students need about 30 minutes to set up their profile and about 30 minutes per week after that in order to compete.

Students who score well by making smart decisions about insurance, retirement saving, fees, unexpected expenses and more may win as much as $20,000 toward college tuition. There will be 132 such awards along with some prize grants for teachers and classrooms—and one grand prize scholarship of $100,000 going to the top student across all six challenges.

The Block program appears both fun and engaging. Participants will have access to a real-time leader board to see where they stand and, Cobb says, winning isn’t as simple as just choosing the most conservative options. As in life, things are constantly changing. Kids will need to figure which trade-offs make the most sense in this simulated world of money so that, maybe, one day they’ll be good at it in the real world.

Related:
3 Mistakes That Will Cost You a College Scholarship
How to Get Full Credit When You Swap Colleges

MONEY Kids and Money

The Cost of Raising a Second Baby (Who’s Not a Prince)

Britain's Prince William and Kate Duchess of Cambridge and the Prince
John Stillwell—AP

No plush royal cushion to fall back on? Here's what costs the rest should expect when expecting kid number two.

The British monarchy announced via Twitter today that that the Duke and Duchess of Cambridge are expecting their second baby, a little more than a year after Prince George was born.

It’s not unusual, once you’ve gotten the hang of one, to start thinking about number two. After all, the typical American woman has 2.01 children, according to the U.S. government.

But with their posh life at Kensington Palace, Will and Kate will have have had a bit of an easier time making the decision to go for a second than the rest of us, who will face a fairly consequential question: How can I possibly afford this?

The Department of Agriculture estimates the annual cost of a single child under age two at $16,180 for a two-parent, middle-income household. Sharing things like toys and perhaps a bedroom means you get something of a discount on the second one, so parents’ outlays go up about 80% rather than doubling. Not that an extra $12,940 is pocket change for most of us, especially when added up over a lifetime.

A couple with a combined income of more than $107,000 would spend an average of $510,000 to raise a child to his 18th birthday. For a pair, the number is just short of seven figures, at $826,000. And those averages do not include college, which can add another $328,000 to the tab if both kids go to private schools and graduate in four years. Gulp.

There can be additional hidden costs. Mothers with two kids are more likely to step out of the workforce than mothers with one, which results in lost income, lost retirement savings, halted career progress, and difficulty finding a new job when they desire to lean back in. Those who do return to work face what some have called a “motherhood penalty:” A recent study by research group Third Way found that while fatherhood tended to raise men’s earnings, women’s wages declining about 4% per child, controlling for other factors.

Family resources get spread thin in other ways, too. The cliche about the parents fretting over every the eldest’s every milestone while letting number two fend for him- or herself seems to have some truth to it. One recent Brigham Young study found that second children got roughly half an hour less “quality time” each day from parents than first-borns. (Fortunately, baby royal #2 will still get plenty of attention from the world, if not from mom and dad.)

Anxious yet, moms and dads? Let’s come back to the fact that the typical American family has two and makes it work—and hey, the Duggars do it with 19. And if you really want a big family you can find ways to expand your clan within your budget.

“Having a child is an exciting but scary step, and money can be a big part of that worry,” financial planner Matt Becker, father of two and founder of the blog Mom and Dad Money told MONEY for a recent article on how to afford a baby. “I wouldn’t dive in without considering the financial consequences, but I also wouldn’t let them scare you off.”

Related:
How to tell if you can afford a baby

MONEY Kids and Money

3 Ways to Make Sure a Costly College Degree Pays Off

Graduation cap on sidewalk with change in it
Brother, can you spare a better college experience? Paul Hudson—Getty Images

A new study finds a widespread "failure to launch" among millennials fresh out of school. How to make those four years count.

Two years after graduating from college, a significant portion of the class of 2009 was economically and professionally “adrift,” according to a new book by two well-respected educational researchers. And while these young adults had the bad luck to graduate during the Great Recession, how they spent their college years was a large part of the problem too.

Two-thirds of the roughly 1,000 members of the class of 2009 in the study were in the job market in 2011 (about 30% were in graduate school), and almost 40% of that group were unemployed, underemployed, or earning less than $20,000 a year, reports the newly released Aspiring Adults Adrift, by Richard Arum, a New York University sociologist, and Josipa Roksa, associate director of the University of Virginia’s Center for Advanced Study of Teaching and Learning in Higher Education.

Many “are not making the transition to adulthood,” Arum says, noting that two years after graduation, 75% of the group were receiving some sort of financial assistance from their parents, with about a quarter living at home. Many weren’t engaged as citizens—more than two-thirds, for instance, said they didn’t bother reading about current affairs.

Low Expectations

Parents, colleges, and the students themselves share the blame for this “failure to launch,” Arum says, but, he adds, “We think it is very important not to disparage a generation. These students have been taught and internalized misconceptions about what it takes to be successful.”

One example, says Arum: “They have learned through their interactions with educational institutions that it is possible to succeed with minimal effort.” In their study, students who studied alone less than an hour a day still managed to earn an above-average GPA of 3.2.

Another problem, says Roksa, is that many colleges have shifted their emphasis from tough classes to social life and amenities because that is what attracts more students and tuition dollars.

Colleges applicants respond more positively to improved dorms and gyms than descriptions of demanding classes. Plus, add Roksa, schools are increasingly hiring non-tenured professors and keeping them based at least in part on student enrollment and reviews. Research shows that students tend to give better reviews to classes taught by easy graders.

What Goes Wrong at College

The college experience has left these millennials ill-equipped to find good jobs for three reasons, the researchers say.

  • Not enough learning. In their groundbreaking 2010 book Academically Adrift, Arum and Roksa reported that 45% of their study group exhibited no gain in critical thinking in the first two years of college, generally because they took undemanding classes and spent little time studying alone. In this follow-up study, the authors found that the students who failed to develop higher-level thinking skills were twice as likely to have lost a job between 2010 and 2011 than were those who scored well on such tests as seniors.
  • Majors that are not valued by employers. As other studies have concluded, engineers had high employment and earnings rates. Business majors were more likely to land jobs as well. But those who majored in social sciences, humanities, social work, or communications had comparatively high unemployment rates, ranging from 7% to 9%.
  • Undemanding colleges. Students who applied themselves and chose an in-demand major were more likely to prosper no matter what college they attended, say Arum and Roksa. But when all other characteristics were held constant, college choice explained about 24% of the variation in student learning gains. Generally, students who attended more selective colleges did better—perhaps because classes were more demanding. Graduates of less-selective colleges were almost twice as likely to work in low-skill jobs.

How to Do Better

Students are unlikely to make spontaneous changes. Many of the undergraduates studied expressed the belief that social skills would win them good jobs. And many who spent their undergrad years socializing and coasting through easy classes were satisfied with their college experience.

Arum and Roksa note that parents may not realize how much leverage they have to push colleges and students for more academic rigor and a focus on skills valued by the job market. Here’s how to make that effort.

1. Talk turkey. Arum, who has two kids in college, says that parents need to show their children the relationship between discipline, learning, and success later in life from an early age. And keep the message going. “I don’t want to advocate increased helicopter parenting, but we need to orient our children so that they understand that college is a time when one needs to invest in rigorous academic coursework,” he says. “The social aspects of college should complement the academic core.”

2. Demand evidence: When a high school senior is shopping for colleges, remember that a “tour is a marketing exercise by the college,” Roksa says. Ignore the hype and press admissions officers and other officials for evidence of their school’s academic rigor. Ask what percentage of classes require at least 40 pages of reading a week and at least 20 pages of writing a semester, and how much time the average student spends studying alone, all of which this research showed led to greater learning.

Among the evidence she suggests you ask for: student scores on tests of critical thinking such as the Collegiate Learning Assessment, or responses to questions about class assignments on the National Survey of Student Engagement (NSSE). Many schools collect such data but don’t like to release it to parents or the public.

3. Emphasize career planning: More than 40% of the group found full-time jobs through their college’s career services office, or from an internship, volunteer work, or another previous job. Arum and Roksa discovered that the jobs students got through their college career office tended to be better than those secured through personal connections. So parents should push schools to improve their career services, as well as urge their kids to take full advantage of internships, practice interviews, and other services. To find out which colleges launch students into the best-paying jobs, check out Money’s best college rankings, including this list of the 25 schools that add the most value.

Your browser, Internet Explorer 8 or below, is out of date. It has known security flaws and may not display all features of this and other websites.

Learn how to update your browser