A new study by Charles Schwab reveals that the recession has had a deep impact on today’s high school students. They have a greater appreciation of how hard their parents work to earn money and are more likely to talk to their parents about the subject now than they were in the past. They also report feeling more grateful for the material things they already have.
Nevertheless, while teens are learning more about financial matters at home, only 39% of them said that they know how to manage a credit card, and an even smaller number, 32%, say they know how credit card interest and fees work. And sadly, those numbers are down drastically from a similar Schwab survey in 2007 which reported 64 percent of teens felt they knew how to manage a credit card and 43 percent knew how a credit card works.
Parents Take the Lead
Credit-Land.com research has confirmed: parents seem to have learned a lesson from the recession as well. Parents say they are more likely to talk to their teens about money issues and credit management because of the recession. Three out of four teens that participated in the 2011 Teens and Money Survey say that their parents are now discussing finances with them. Over 1100 teens aged 16-18 were surveyed from mid-February to mid-March.
According to a study by Credit Land experts, the recession has created a learning opportunity for teens and a teaching opportunity for both parents and educators. Eighty-two percent of the teens surveyed said their parents have taught them the basics of money management. However, the survey concluded that more teens knew the cost of an iPod than they did the cost of a gallon of milk.
Resources for Help
Credit-Land.com is one resource parents can turn to for help in teaching their kids about money and managing credit.
In teaching money management, experts suggest creating and delivering lessons that focus on one financial topic or tip per week. Parents should also lead by example, showing their kids that money can be allocated in a variety of ways beyond spending, such as regular deposits into a savings account, funding a retirement account or giving donations to charity.
Experts note that parents need to be aware of the messages they send to their children about money and finances through their own actions, although they add that it is important to allow children to make and learn from their own money mistakes.