Junior Achievement USA and The Allstate Foundation’s 2013 Teens and Personal Finance Poll shows that teenagers are more optimistic about their financial futures, with a 20 percent increase in teens believing they will be financially better off than their parents.
However, part of their financial security comes from depending on parents until a later age.
The survey found that 25 percent of teens think they will be age 25-27 before becoming financially independent from their parents, up from 12 percent in 2011. Concurrently, parents expect their children to be in their mid-20s by the time they are financially independent, as the economy, availability of jobs and societal norms now indicate a longer dependence on parents.
As we celebrate Financial Literacy Month in April, it is interesting to see this shift in the number of teens thinking they will remain financially dependent on parents – while building a better future for themselves.
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 resources are available, and now is the time to help today’s teens secure independent financial futures. Because financial literacy is good for everyone – including employers.
Students who have acquired these skills are more likely to be prepared for financial setbacks and emergencies; to be self-supporting; to increase their standard of living through wise spending, saving and careful planning for the future; and to positively affect their local and national economies.
And they make for better employees.
Financially literate employees tend to make good decisions, which allow them to thrive and thus contribute more fully to their workplace and their communities. Those contributions increase their value in the business world and eventually become a positive impact on the global economy.
The need for financial literacy skills in the workplace continues to increase, and the value of those entering the workplace with those skills continues to grow.
ECONOMICS FOR SUCCESS
This is one area where Junior Achievement and The Allstate Foundation have made a difference.
Since 2005, they have partnered to help students take the valuable information learned about personal finance in the classroom and apply it in their lives after graduation. The Junior Achievement JA Economics for Success program, created in partnership with The Allstate Foundation, has helped more than 1.2 million students across the nation set personal goals about money and make wise financial choices.
The program also helps empower students to develop, plan and set goals to help protect them from unexpected financial pitfalls.
The program is just one of many Junior Achievement programs that give students an increased understanding of our economic system – including the current financial crisis – and how to avoid making similar mistakes in the future.
Beyond these programs, there is still at least one other important place for our teenagers to learn about finances and the economy: the home.
According to Don Civgin, president and CEO of Allstate Financial, parents continue to be the No. 1 influence on teens when it comes to money. So helping their teens set financial goals and take steps to meet them should pay off financially for both teens and their parents.
How to pay for college, for example, is the perfect opportunity for parents to discuss finances with their child.
So, even as we are learning that children remain in their parents’ home until later in life, don’t wait until the children turn 25 to impart a little Economics 101.
It just makes sense – and cents.
Judi Simmons is president/CEO of Junior Achievement of Greater Reading and Lehigh Valley. She can be reached at email@example.com. An executive summary of the 2013 Junior Achievement USA/Allstate Foundation poll is available at www.ja.org.