June 6, 2002

Money Management For Teens

A recent survey on teens conducted by Merrill Lynch, findings showed that advice from adults about savings and investing greatly influenced their behavior.

"It may seem that teenagers turn a deaf ear to everything parents say, but when it comes to financial matters, young people are listening to their parents more than one might think," says Debra Pankow, North Dakota State University family economic specialist.

"Budgeting is second nature to some of us, and very difficult for the rest. It is important to teach your teen to save money along with teaching them how to properly spend their money too," says Pankow.

The survey shows that teens spent approximately $122 billion last year. Boys on average spent $82 a week, while girls spent an estimated $78 a week. Teens aged 12 to 15, spent $55 -- half of their own money and half of their parents money. For teens aged 18 and 19, the total spent each week averaged $124, of which $102 was their own money.

The survey indicates that many families are discussing helpful money management topics:

"Parents may know that they need to discuss money with their teens, but they may not know how," says Pankow. There are some guidelines parents can use when helping teens manage their money:

• Have your teen get a bank account, one that you can check on if needed. At first, help your child balance their statements.
• Have your teen save half of everything they make for their future. Either for college, buying a car, or for some other important goal.
• Have your teen keep a record of everything in a folder to track how much they made, how much they will save and how much will they spend. This folder should be accessible to your teen and to the parent for monitoring.
• Encourage your teen to share, whether by donating their money to worthy causes, or by sharing their time as a volunteer.

From a pool of 515 teens that were surveyed, 59 percent said they usually save half of their money, and 24 percent said they saved all of their money. These are encouraging statistics, yet 17 percent reported spending most if not all of their money as soon as they got it according to Pankow.

"Help your teen acquire the practice of saving by engaging them in practical discussions about money management. Saving is a habit teens are likely to carry into their adult years, giving them a head start toward their own financial security."

If you are interested in teen money management, contact your local extension agent or contact Debra Pankow, North Dakota State University Extension family economics specialist , at (701) 231-8593 for more details.

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Source: Debra Pankow, (701) 231-8593, dpankow@ndsuext.nodak.edu
Editor: Richard Mattern, (701) 231-6136, Richhard.Mattern@ndsuext.nodak.edu
Writer: JJ Camarillo, (701) 231-8371, jcamaril@ndsuext.nodak.edu