Thursday, September 2, 2010

Teens and Money

There was an article in the recent Family & Consumer Sciences Research Journal titled What Do Teens Want to Know About Money? that had some interesting statistics I would like to discuss today.

First – one of the most alarming statistics:

·         Financial test scores are at 48.3%, which is down from 57.3% in 1997

An almost 10% drop in scores which were already at a failing rate is alarming – what are we doing to stem this tide of financial illiteracy?

Fortunately we are trying to do our part.  State Farm generously donated money to the Personal Financial Planning department to send some of our students around to 50 high schools over the next year to present the “Top Ten Teen Financial Tips.”  Our students will share their passion for managing their finances and hopefully a few of the tips will stick with the high school students!

On to some of the other interesting statistics:

What do teens most want to know about money?

·         74% - How financing works for large purchases such as a car or home

·         72% - Investing money

·         68% - Identity theft

·         62% - Saving money

·         58% - Budgeting

·         55% - Checking accounts

·         55% - Credit cards

These are the things they want to learn about money, but how do they want to learn about it?

·         54% - During school

·         40% - Magazines/newsletters

·         32% - Internet

·         19% - Groups outside school

I found it interesting that “at home” wasn’t included as a response on here.  I have a strong belief that parents can have a profound impact on their children’s financial education – perhaps stronger than anyone else.  If you are a parent reading this please consider each of the areas above and think about how you can teach your child these concepts.

If you are a teacher are you teaching your class these items?  Even if you don’t teach personal finance can you pass along some helpful hints for the students in your class – some of the mistakes to avoid and good decisions to make?  I remember in high school I had a Chemistry teacher who would occasionally say “Put away your textbooks and put your desks in a circle.  We are going to learn some life skills today.”  We would then spend the hour learning life lessons – we talked about college, careers, money, relationships and more.  These lessons had a stronger impact than many of the other lessons I was taught.  Perhaps you can occasionally do the same with your class.

Finally – how do teens get their money?

·         49% - Parents

·         31% - Full or part-time job

·         25% - Odd jobs

The fact that almost 50% of teens get some money from parents provides a valuable teaching opportunity.  Are we just handing money over or are we spending time teaching important lessons?  This follows along with the Tip from two weeks ago about Children and Allowances (http://mufinancialtip.blogspot.com/2010/08/children-and-allowance.html) and last week’s Tip about National Money Talk Night (http://mufinancialtip.blogspot.com/2010/08/national-money-talk-night.html).

We would love to get a discussion going among our readers about these items – if you are a student, what do you most want to learn about money, how do you want to learn about it, and where do you get your money?  If you are an educator or parent, what are some of your “best practices” for teaching these things?

You can comment by going to http://mufinancialtip.blogspot.com.  At the end of the article click the Comment link.  (As a side note for Ryan’s 3282 class – if you post a comment answering those 3 questions before class on Wednesday I will give you 2 free points on your quiz.)

For the full article from the Family & Consumer Sciences Research Journal click this link:

http://onlinelibrary.wiley.com/doi/10.1111/j.1552-3934.2010.00032.x/pdf

Ryan H Law, M.S., AFC
239 Stanley Hall
lawr@missouri.edu

20 comments:

Jennifer Tait said...

Isn't it awesome that our young adults are looking to the future since apparently many of their parents did not! I run a school to work program for seniors in our high school and it amazes me how much the young adults in my classroom are looking to the future and do NOT want to get into debt.

I have a wonderful friend who shared a project with me and this year will be my 3rd year to use it. I call it "When I Grow Up!" The students are paired randomly as couples (married and roommates--depending on the number of males and females). NOTE: I always tell them that same sex marriages are not legal in the state of Indiana so they are roommates.

They draw for a career and savings in the bank. Then they begin their married/roommate life purchasing housing or renting an apartment; furnishing their housing choice; purchasing a vehicle or two (if they can afford it); paying for utilities; and making purchasing decisions for insurance, cell phones, land lines, internet service, etc.

This is a five month process (2nd semester for us) and the students love it. Each month they draw for a scenario (income or expense) and then I usually throw them all a curve by giving all of them the same scenario, which might be shopping for life insurance one month.

The students love it and it gives them the opportunity to "practice" these purchases with a safety net.

Rikki Bertagnolli said...

Something I keep meaning to look into, in regards to money, is how to invest it safely in this economy. I would like to know more about CD's IRA's Bonds's and stocks, and how to go about obtaining them. Yes, we do learn what they are in classes, but nobody says where to buy them, who to buy them from, or what the price range is. For example, before I had FinPlan 2183, I was under the impression that stocks were only for rich people, and that they were very expensive, I now know that this is false.
I am paying a great deal of money to learn this in college. I would rather learn this stuff from magazines, media, or some outside source that doesn't cost $287.00 a credit hour.
I work a full time job as a server, which is where my money comes from. I only get money from my parents on Christmas, or my birthday, which I think is how all adults should obtain money from their parents.

Stacy Mester said...

I have learned a lot about money and finances from watching what my parents have done. Both good things that I should do and mistakes that they made that I should avoid. My money for school comes from loans (one in my name, one in my mom's) and money that I get working part-time at the Student Rec Complex. I would like to learn more about mortgages, but I would prefer to learn it outside of school where I don't have to spend a few hundred dollars an hour to learn about it.

Derek said...

Although I have a general idea of how investing money works, I would like to learn more about how it works. I would prefer to learn about the subject in school. I used to receive money from my parents in high school but now I get most of it from student loans and my savings account which I fill up every summer working part time.

Derek Thomas said...

Although I have a general idea of how investing money works, I would like to learn more about how it works. I would prefer to learn about the subject in school. I used to receive money from my parents in high school but now I get most of it from student loans and my savings account which I fill up every summer working part time.

Luke Vogel said...

There are many things that I would like learn about money. I think I already have a pretty good understanding about money; through classes that I have taken and through my family, but there are still a lot of things that I would like to learn more about. The one thing that I would like to learn most about is investing and how to invest. Investing deals with a lot of risk taking and I think it would be nice to learn about what are good things to invest in and vice versa. My grandfather always tells me that as soon as I start making money, I need to put money away in a Roth IRA. I have a good understanding of traditional IRA’s and Roth IRA’s, but that is something else I would like to learn more about.

I think the most ideal place I would like to learn about these things would be school. I learn a lot by my father and grandfather, but since I’m paying to go to school, that seems like the best place.

I get the majority of my money by working all summer and saving it for the school year. This has actually helped me out a lot because I have to budget everything during the school year, so I don’t run out of money. Having a fixed income during the year has taught me how to save. I am very fortunate because my parents do pay for most of my schooling, but for the most part I get my money by working during the summer.

Ryan E said...

My parents raised me teaching me about money and made me understand that when it is gone, it is gone. That was the simplest way of then teaching me how to save my money. They taught me this after i went through my phase of just spending and wasting on things i did not really want. It made me a much more careful spender. What I want to most learn about money is investing. I would like to learn what a good interest rate is in an interest bearing account. I also want to know how it has changed over the years. I receive veterans benefits from my fathers duty in the army where he served in Vietnam. I receive money each month for four years while I'm in college. After my four years are up, even if I do not graduate in four, my benefits will be cut off.

Zach Ring said...

The thing I most want to learn about money is how to invest your money. I want to learn more about some low risks investment opportunities as well as some medium and high risk investment opportunities. I like to learn about this in finance classes at school because I think that's where the information will sink in the most. I get most of my money from working all summer and budgeting my money throughout the school year. I also get some money from my parents for the necessities such as food, rent, etc. I think that is a good way to learn to budget your money.

Zach Ring said...

The thing I most want to learn about money is how to invest your money. I want to learn more about some low risks investment opportunities as well as some medium and high risk investment opportunities. I like to learn about this in finance classes at school because I think that's where the information will sink in the most. I get most of my money from working all summer and budgeting my money throughout the school year. I also get some money from my parents for the necessities such as food, rent, etc. I think that is a good way to learn to budget your money.

Chris Stottle said...

I would like to learn more about credit and the credit building process. I have always heard no credit is just as bad as bad credit. I figure I could learn more from professors at the university. I get most my money from student loans and my part time job.

Ryan said...

As far as what I'd lke to learn about money; I'd like to learn where and how to invest in certain ventures that "make my money work for me." I imagine that there is a class at Mizzou that I have yet to take that can help me learn how to follow tips ands trends in the stock market, or some other investing opportunities. The best way to teach this for a parent would probably be to start early, teaching kids what the market is and how it works. Basic knowledge at an early age goes a long way by the time you get to college or "real life."

Brittany Gholson said...

I want to learn more about inveseting money. A lot of my classes discuss it but I still dont know much about which is the best option for me.

I pay for all my stuff by having a part time job working about 30 hours a week. By paying for everything myself it helps me learn how to budget and not splurge on things I dont really need.

I would prefer to learn this in the classroom but also at home. My parents definitely taught me how to save growing up.

Victoria DuBose said...

What I would like to learn most about money is about credit cards. What are the different types and if you don't have any credit how do you go about trying to start a new line of credit without getting scammed.

I would like to learn about it in class. Which is kind of what I'm doing right now by learning the ins and outs of credit cards.

I receive most of my money from my parents every two weeks. I also get a refund check which I use and during Winter and Summer breaks I go back to work at my fast food job that I had in high school.

Lydia Jones said...

I am a full time student, catching up on my student career. I'm taking 18 credit hours this semester because I recently changed my major from Interior Design to Personal Financial Planning. I have worked at River Region Credit Union for almost 3 years now and found my true passion while working there. I receive my income from my parents, as well as my part time job. If I could support myself without having income from my parents, there's no doubt that I would. If there is one thing that I have learned from my parents, it's that "school comes first" as they always tell me. Hopefully one day I will be able to give my children what my parents have given me.
What I want to learn most about money is how to get a strong grip on telling it where to go. I want to be able to know how to do it so well, that I can easily explain it to others. Everyone uses money, everyone should be able to use money wisely. I am a kinetic learner, so learning the tactics by experience holds with me the best. I would enjoy going through a computer program simulation where sticky situations about money could be explored.

Josh Walker said...

I would like to learn more about investing my money. Not just investing it in the stock market, but trying to invest it in long term investments. All of my income is from working as a bartender. I have mainly been taught by my parents about how to handle my finances. Although since I have been in college, some of my classes have talked about finances as well.

Christopher Matthews said...

I want to know how to manage my money for long term financial sucess.
I would like to learn about it in the classroom.
I get my money from my parents and some of it from a part time job

Secily Devese said...

I would really like to find out how taxes work. How to do taxes and how my tax dollars work for me. Also I would like to learn about government saving and spending. Lastly I would like to learn more about CD's.

I would like to learn about money from school. It is more institutionalized and I would like to share what I learn with my family and friends.

The majority of my money comes from work. I've been working for 5 years. On occasion I receive money from family members.

Dan Boeckmann said...

The main thing I would like to learn about money is investing. I get the gist of everything else, investing just seems a little foreign to me. Which market to invest in, what rates mean what, what website is best, and the returns for short and long term investing. The main way I would like to llearn about these topics is definitely in class. I don't believe I have the focus or motivation to take my own time to review these topics. My primary source of income is from working myself. I live off my savings when I am at school and have been taught to control my spending at a young age so it always tends to work out for me. I am proud to say I will be leaving school with 2 degrees and no loans.

Jill Mueller said...

I would like to know more about Roth IRA's, more about where to obtain stocks and how a CD works. A lot of these things, I have even been asked by adults in my family wanting to know more about them since I am taking Personal Finance classes. Its not just teenagers that do not know about investing but some adults too. Throughout the years, I have learned a lot from my parents about finances and different things that they do, but also some research online if no one can give me a straight answer about something immediately. Right now, I work part time at the Student Rec Center on campus to get money, also if or when I need it, my parents help me out also, but very rarely.

Tim Cowhey said...

I learned most of what I know about money and investments on my own at first. I think that the internet can be a great tool but you never can be 100% sure that what you are reading is legit. I now have a better grasp on things being that I have taken many personal finance classes. I think that high school teachers should focus a little of there time to discuss this topic. Kids really need to know about money prior to entering college. If I had to pin point one topic that I want to learn more on I would have to say investments in general. Also, I work part time to pay rent but still find my self needing parental support to pay the utilities bill from time to time. I think that it is important for college students to have there own source of income but at the same time parental support can be a good thing if it allows the students to focus more of there time towards there education.