If anything good may be said to have come out of this country’s worst economic crisis since the Great Depression, it may be that teenagers have emerged from it with a greater appreciation for what they have and for their parents’ hard work.
The economic downturn has been an eye-opening reality check for teens and has radically changed their attitudes about money, according to a just-released survey by Charles Schwab & Co., Inc. The 2011 Teens & Money Survey finds that Generation R (as in “recession”) now has an increased awareness of financial hardship.
Over 1,000 teens between the ages of 16-18 were polled during February and March. Sixty-four percent said they are more grateful for what they have and 58 percent said they are less likely to ask for things they want as a result of the recession. Fifty-six percent now have a greater appreciation for their parents’ hard work and more than a third (39 percent) appreciate their families more.
What life lessons have teens taken from the recession?
∙It’s more important to have emergency savings. (73 percent)
∙It’s easy to get carried away and spend too much when times are good. (59 percent)
∙It’s important to understand the consequences of borrowing money. (51 percent)
More than three-quarters (77 percent) now describe themselves as “Super Savers” as opposed to “Big Spenders” (23 percent). On average, teens have saved $966. The top two things for which they are saving are college (76 percent) and for an emergency (46 percent).
Only 4 percent agree with the statement, “You might as well spend as much as you can today because you never know what tomorrow will bring.”
Consumerism is an issue of concern to teens, who believe there is a greater pressure to have the latest gadgets and technologies. Eighty-four percent have their own cell phone, 76 percent have an iPod or MP3 player, 66 percent have their own computer or laptop, and 46 percent have their own TV.
Just over half (52 percent) have a savings account, 42 percent have an ATM/debit card, and 33 percent have a checking account
Teen’s heightened awareness of money in the wake of the recession may be in correlation to parents taking the time to discuss their financial situation with them. Three-quarters of teens surveyed said that their parents or guardians have talked to them about how the recession has impacted them.
However, financial literacy among teens seems to have declined since 2007 before the downturn. Seventy-seven percent believe they are knowledgeable about money management, but fewer today actually know how to write a check (60 percent vs. 67 percent four years ago) or balance a checkbook or check the accuracy of a bank statement (35 percent vs. 51 percent).
Eighteen year-olds were also less knowledgeable today about how credit card interest and fees work (32 percent, a decline from 43 percent in 2007), how to manage a credit card (39 percent from 64 percent) and how to balance a checkbook (43 percent from 60 percent).
Parents continue to be the primary source of personal finance information for teens. The recession is one of those vaunted teachable moments, said Carrie Schwab-Pomerantz, senior vice president of Schwab Community Services in a statement. “As parents, I think we can do a better job of not only communicating conceptual information, but also teaching practical money skills. Sharing how much we ourselves spend on necessities such as groceries, gas and insurance, as well as on extras such as clothing and entertainment, can open kids’ eyes to the real cost of living…These are all topics teens want to learn more about.”