Junior Achievement USA together with The Allstate Foundation have released the 2013 edition of the Teen and Personal Finance Poll. The release is timed to coincide with the kickoff of April’s Financial Literacy Month to help children and adults guide the conversation about responsibility and money.
The results of the survey document a shift in how teens and younger kids are thinking about their own future financial independence. For example, a full 25% of those polled said that they did not expect to become financially independent of their parents and guardians until they’re between the ages of 25 and 27. This is a substantial increase over the 12% who believed the same thing in 2011.
The delay in independence contributes to the optimistic assessment of over 20% of the respondents of their future fiscal health compared to their parents. They believed that being able to rely on their parents for longer would allow them eventually to do better than their parents economically.
Still, there were plenty of alarming findings, especially when it comes to financial literacy. Twenty percent of teens said that they didn’t have the skills needed to draw up a realistic budget and stick to it, while 23% didn’t know how to responsibly use consumer credit such as credit cards.
A full 34% didn’t understand the basics of investment.
· More than one-third of teens think their parents do not talk with them enough about money and budgeting
· One goal many teens have is to go to college, yet nearly 30% haven’t discussed paying for higher education with their parents and only 9% admit to saving for college
The lack of communication between parents and kids is alarming considering that parents and guardians continue to be the number one influence on kids when it comes to handling money and financial intelligence.
Parents not working hard enough to set a good example could explain findings such as the 42% of teens who are not interested in learning how to budget and a quarter who think that budgeting is something only adults do.
“It is interesting to see this shift in teens thinking they will remain financially dependent on parents, while building a better future for themselves,” said Jack E. Kosakowski, president and chief executive officer of Junior Achievement USA. “From our findings, we can infer that teens expect to live with their parents longer because 23 percent are unsure about their ability to budget and nearly 20 percent express similar feelings about the use of credit cards. Additionally, 34 percent of teens express a lack of confidence in their ability to invest their money. The good news is that resources are available, but now is the time to implement steps to help today’s teens secure independent financial futures.”