Teens Expect to Rely On Parents For Money Up To Age 27—Survey
Saturday, April 06, 2013
The idea of college graduates completely relying on their parents for financial assistance well into adulthood may underscore the hit TV show Girls, but it's far from fiction. According to Junior Achievement USA and The AllState Foundation's Teens and Personal Finance Poll, teenagers are positive that they will eventually be financially better off than their parents yet that financial security will result from depending on their parents well into their adult lives.
The survey's results demonstrated that 25 percent of teens believe they will be at least 25 to 27 years old before they become financially independent of their parents. This number has escalated dramatically from the 12 percent opinion of 2011. It seems clear that a conspicuous amount of teenagers see their parents being thoroughly present in their future budget, and the number continues to grow.
Adolescence and the Economy
While the survey asks the teenagers for their own opinion, it is important to remember the external financial environment surrounding these participants. Certain Rhode Island financial experts believe that there is much more involved in this recent trend of adolescent unwillingness to be financially independent.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTDr. Paul Maloney, a Professor of Finance at Providence College, believes that economic conditions can cause a chain reaction that includes tuition increases and competitive rent increase that can pressure students into staying home subsequent to graduation. "I would certainly say that the current state of the economy is on the forefront for why students may rely on their parents financially," Maloney said. "Jobs are certainly difficult to come by, and I often hear from my students how difficult it is to pay back their student loans right out of college. Living back home with their parents for a while may give them the chance to save some money and pay off those loans."
Finding Your Money Mojo
Another crucial finding of the Junior Achievement USA and AllState Foundation survey is that 34 percent of teens and young adults express a lack of confidence in investing their money and making sound financial decisions. Lee Lewis, the president of Junior Achievement of Rhode Island, believes that students should be exposed to financial literary early on in schooling. "Personal finance is not routinely taught in schools and parents often to do not feel confident enough about the topics of money management and personal finance to educate their children," he said.
"As a result, many teens today have not been taught to use the resources they need in order to proactively manage their money. A third of the teens we surveyed said they think their parents do not talk with them enough about money and budgeting." Yet, despite the lack of preparation throughout schooling and adolescence, Lewis is optimistic because there are plenty of resources to help develop responsible financial practices. "At Junior Achievement, we are committed to preparing students from kindergarten through high school to own their economic success," he said. "We understand that preparing our youth to be financially literate is more complex than teaching them to put their pennies in a piggy bank."
While Junior Achievement is a program that focuses on increasing students' comfort and vision when dealing with finances, it also brings parents and students together to face the confounding world of finance together. "Parents continue to be the number one influence on teens when it comes to money, so helping their teens set financial goals and take steps to meet them should pay off financially for both teens and their parents," Lewis said. "We know talking with kids about finances can seem daunting, but Junior Achievement has tools like $ave, USA Parent Lessons to help parents speak with their kids about money-management issues".
Cash Curriculum?
Financial literary ought to be a concept that students everywhere should be familiar with before they enter the workforce, Maloney said. "Throughout my career in teaching Finance I have been involved with a Legislative Commission that was involved with surveying financial literacy at the high school level," he said. "It was clear that the high school students were not receiving the proper exposure to financial literacy to make a lasting impact."
"The difficulty of incorporating financial literacy into the high school curriculum is that budgeting is often tight and opening up another class is often costly. "Opening a class in a high school curriculum for financial literary is difficult because of limited budgets," Maloney said. "I would say the best option would be to incorporate financial literacy into subjects with practical applications such as mathematics and social sciences so students can apply those lessons into their adult lives".
Where To Go From Here?
Is this generation of teenagers and young adults doomed to confinement in their parents' homes while their financial illiteracy haunts them? Lee Lewis believes that there is hope for this younger generation to budget effectively to live a life dependent of their parents, yet they need to put in work to develop maturity in making sound financial decisions. "Our research shows that teens aren’t in a rush to save," he said. "Three in 10 teens do not use a budget and, of those, four in 10 say they are not interested in doing so."
Lewis said that Junior Achievement has worked and will continue to work with volunteers, business partners, policy makers, educators and educational institutions,"to equip the youth of Rhode Island with the skills needed to survive in a complex and ever-changing global economy."
Maloney believes that young adults' ability to fly the coop begins and ends with the fruitfulness of the job market. "It is very difficult to predict exactly where the trends will go," he said. "Certainly as we see a rebound in the economy, self sufficiency in students will most likely follow. I have heard that 30 is the new 20, so maybe twenties may be a new transitioning phase."
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