According to the 2011 Teens & Money
released today by Charles Schwab & Co., Inc., nine out of 10 teens say they were “affected by the recession,” causing major shifts in perspective that include a greater appreciation for what they have and an increased awareness of financial hardship. The survey polled over 1,000 teens between the ages of 16-18 during February-March 2011. Several questions were benchmarked against responses from Schwab’s 2007 Teens & Money Survey.
Nearly two-thirds of teens (64 percent) are more grateful for what they have, and the majority (58 percent) reported they are less likely to ask for things they want as a result of the recession. In addition, a majority (56 percent) now have a greater appreciation for their parents’ hard work, and more than a third (39 percent) appreciate their families more. This could be due in part to parents being increasingly open with their teens about money issues.
teens surveyed responded that their parents or guardians have talked to them about their financial situation during the past year. While teens aren’t overly optimistic about an economic recovery — with most (80 percent) believing the recession isn’t over yet and almost half (45 percent) responding that the recession will continue beyond this year — the majority feel they eventually will do better financially than their parents (59 percent).
“It seems clear that the great recession has changed the mindset of teens. It has given these ‘Recession Generation’ youth a deeper appreciation for what they have and how hard their parents work,” said Carrie Schwab-Pomerantz, senior vice president of
Schwab Community Services
. “This may be the silver lining to the economic downturn since it gives parents and educators an enhanced opportunity to communicate critical lessons about financial decision-making.”
Super Savers vs. Big Spenders and Top Lessons Resonating with Teens Today
While the recession’s long-term effects on teens are yet to be seen
the importance of saving is one of the significant lessons that teens say they learned over the past few years. Seventy-seven percent of American teens today consider themselves “Super Savers,” as opposed to 23 percent who characterize themselves as “Big Spenders.” On average, teens have nearly $1,000 saved, and over three-quarters (76 percent) say their main reason for saving is to pay for college. Fewer than five percent agree that “you might as well spend as much as you can today, because you never know what tomorrow will bring.”
The top lessons teens said they’ve learned from the recession include
- It is important to have enough emergency savings in case times get tough (73 percent)
- It is easy to get carried away and spend too much when times are good (59 percent)
- It is important to understand the consequences of borrowing money (51 percent)
Teens do tend to think about different sums of money in different ways. With an unexpected windfall of $500, for instance, the Super Savers would save and the Big Spenders would spend. (Eighty-two percent of the Big Spenders would spend the money on music and clothes and 69 percent on going out with friends.) However, with a larger windfall of $5,000, both groups would save, with 84 percent of them saving the money for college.