Sunday, March 30, 2014

New Finding: Teens stressed about money

Teens are stressed about money, according to a recent H&R Block survey.

Why?

1. The cost of college
"...nearly all (97 percent) of survey respondents still plan on attending college, viewing it as a necessary step for future employment. In fact, 86 percent of teens believe it is more important than ever to choose a major that leads to a well-paying job. But, a vast majority of teens – 78 percent – worry about borrowing too much in student loans, fearing crippling debt after leaving college."

Since 1980, the cost of college has skyrocketed nearly 500% when adjusted for inflation. This trend cannot continue; something needs to change.


For now, most students can find an affordable path to earn a college degree. There are tools available to help students make an informed student debt choice. 
2. Teenage households continue to face financial distress
"Median household income, as reported by the U.S. Census Bureau, fell for the fifth straight year in 2012. The current level of $51,017 is far below the $55,500 when the recession began and is the lowest mark, adjusted for inflation, since 1995 – before all but today’s oldest teenagers were even born.

Perhaps not surprisingly, 58 percent of teens now believe they will be less financially sound than their parents."

One of the most important lessons we can teach our students is the value of saving and investing at an early age. Both habits can cushion the blow of eroding wages everyday Americans are facing if they begin to save and invest when they're young.

We can help students by teaching them to take advantage of the power of compound interest, and introduce them to resources that nudge them into the habit of saving when they're younger and it's easier.

3. Taxes are too complicated
"Taxes remain a duty for adulthood, as teens are either disengaged or uninformed – only three of every 100 have filled out an income tax form, while 26 percent feel the forms are too complex."

Most students will qualify for tax refunds. Yet with only 3% of teenagers filing, most will never see any of it. There are plenty of resources available to help students understand how to file and collect their refunds.
4. Teenagers are turning to their parents
"75 percent of teens still say their parents are their most important source of financial information. In fact, 62 percent of teens view their parents as good money management role models."

Unfortunately, research has found that on the aggregate, American parents are not financially literate. Our education system must train our teachers to provide students with a financial education. But in the mean time, there is an ideal resource to help parents teach their own children about money.
5. Teenagers are making adult financial choices now
“Our survey shows 57 percent of teens use their own money on purchases, yet they often lack fundamental money management skills. The good news is, the research clearly illustrates a desire to learn, to grow and to become financially savvy..."

99% of U.S. adults support personal finance teaching in high schools. Yet, only 4 states require a semester long class be devoted entirely to teaching personal finance to graduate. This is a far cry from the CFPB’s recommendations of how personal finance should be taught in our schools. 

Most high school students are making financial choices now. Many shop; have jobs; pay bills; pay taxes, are eligible for refunds if they file; have accounts at financial institutions; make car payments; pay car insurance; and most importantly -- are preparing to make a student debt choice. So as our students shuffle from one class to the next learning lessons for their future, they’re missing out on the lessons that will help them manage the stresses they're facing right now.

No comments:

Post a Comment