Published: July 2006

Charles Schwab Foundation’s ‘Teens & Money Survey’

A survey examining issues surrounding Teens & Money released this spring by the Charles Schwab Foundation provides insight into the need for young people to learn the fundamental ABCs of money management.

The survey reflects teen (ages 13-18) attitudes about money, banking, credit and family finances.

While the majority of surveyed teens say they are knowledgeable about how to write a check (61 percent) and use a debit card (54 percent), fewer than half (41 percent) know how to balance a checkbook. The majority of teens say they know how to shop for the best deal when making a purchase (66 percent), but fewer than half understand how to budget their money (48 percent).

Teens are already starting to accumulate debt, with nearly a third of those surveyed (31 percent) owing money to either a person or a company. On average, teens owe $230, with older teens 16-18 owing significantly more than younger teens 13-15 ($351 vs. $84). Fourteen percent of teens 13-18 say they already are more than $1,000 in the red, and this percentage rises significantly for teens 16-18 (22 percent).

Nearly half (46 percent) of all teens who owe money admit being concerned about paying it back. Thirty-four percent of survey respondents say they get money from a debit or credit card - either in their own or their parent's name. About two in ten teens (18 percent) say that if given the choice they would rather make purchases with a credit card than cash.

Family matters

Most surveyed teens (61 percent) believe they will be more successful financially than their parents and in fact express concern (56 percent) about their parents' financial well-being. The areas they believe their parents are most concerned about include paying utility bills, saving for college, paying car expenses, and paying the mortgage/rent.

In spite of their concerns, most teens report that their parents or guardians are their preferred and primary money mentors, awarding parents high marks for teaching them about money management (88 percent give their parents/guardians a grade of "A" or "B"). Teachers and schools are the next most frequently cited source of financial education, with 63 percent of teens grading them with an "A" or "B." The news media earns the lowest scores for providing financial education, with the majority of teens (63 percent) giving magazines, newspapers, and TV grades of "D" or "F."

The survey showed that teens want to learn more about how to manage money, with nearly three-quarters (74 percent) agreeing that it should be a required course in school. Nearly all American teens (93 percent) believe it is important to know how to manage money to live within one's means and to stay out of debt (86 percent).

A gender divide

A distinct split exists between boys and girls when it comes to money knowledge and habits. Among the findings:

  • Many more teen girls than boys report being knowledgeable about writing a check (73 percent vs. 49 percent) and how to use a credit card (54 percent vs. 42 percent).
  • Teen girls are much more likely than boys to get money from credit or debit cards (43 percent vs. 26 percent) and are also more likely to be in debt (40 percent vs. 23 percent).
  • Teen girls feel a greater responsibility to contribute to family expenses, with 32 percent saying they contribute vs. 23 percent for boys.
  • Fewer girls than boys are apt to say that learning about saving, spending and investing money is interesting (66 percent vs. 76 percent).

For More Information

Consumer Action's "Talking to Teens About Money," one of our MoneyWi$e series modules.

Charles Schwab Foundation’s Teens & Money survey

Moneywise Kids, a new section of the Schwab web site, includes practical tips on how to educate children, a financial quiz and links to a series of "Ask Carrie" columns by Schwab’s Carrie Pomerantz featuring topics to help parents teach young people to be savvy about money.

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