NDSU Extension Service - Ramsey County

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Teens vs. Money Management

Teens vs. Money Management

 

          Sometimes when it comes to financial literacy, teens seem to do and think the exact opposite of the sound financial practices we adults are wishing they would practice.  When asked about basic financial concepts, high school seniors correctly answered only 48 percent of the questions, down from 52 percent in 2006, according to the Jump$tart Coalition's recent survey on financial literacy. College students didn't fare much better, with college seniors scoring a 65 on their survey, administered for the first time in 2008.

            What are some basic money management lessons, today’s teens and young adults need?   For financial success, ensure that your teen/young adult can:

-         Balance a checkbook

            Of the high school seniors surveyed by the Jump$tart Coalition, only 45 percent have a checking account, and one out of four have no bank accounts at all. Once they leave home and set up an account on their own, those without money management skills often make costly mistakes. Some 30 percent of college students admitted to bouncing a check.  At whatever age, youth begin earning income from a job, it's time to open a checking account.  How to write checks, use a register and reconcile their account with their bank statement are skills that last a lifetime.

-          Budget those dollars 

            Over a third of the college students surveyed had paid a credit card bill late, and while some just forgot to pay it, others put off writing a check because they ran out of money.  Many future budget woes could be avoided if budgeting was connected with that very first paycheck.  Budgets that are a reflection of how our money flows, ingoing and outgoing are much easier to follow.  

-          Establish a good credit history

            College loans typically make up only part of the debt load that students carry after graduation.  Because two-thirds of college students surveyed have one or more credit cards and 83 percent got their first one by the end of their freshman year, it's easy to graduate owing thousands more.  Some teenagers think of credit cards as free money and need to be aware that when they charge something, they're taking out a loan that must be repaid. As such, they should only use credit cards to meet their needs, not their wants.           - Consider all the costs

            For many teens, buying a car is their first major investment. But few understand the true cost of ownership, and they often leave expenses such as maintenance, repairs, gas and insurance out of their savings plan. While teens see the value in saving for a car, few factor maintenance costs into their future budget.

 

 

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