Capital One's Annual Back-to-School Shopping Survey Finds Current Economic Environment, School Budget Cuts Will Impact Back-to-School Spending This Year
Survey finds increase in number of parents and teens discussing back-to-school budgeting, yet many teens still report limited practical money management experience
MCLEAN, Va., July 31, 2012 /PRNewswire/ -- As back-to-school shopping season kicks into full swing, a new survey from Capital One Financial Corporation (NYSE: COF) finds that current economic conditions and school budget cuts are having a significant impact on back-to-school shopping plans, and that more parents and teens are planning ahead and talking seriously about back-to-school shopping and budgets.
In Capital One's 12th annual back-to-school shopping survey, 59 percent of parents say the amount of money they plan to spend on back-to-school shopping this year is impacted by current economic concerns, and 42 percent of parents say their spending will be impacted by school budget cuts.
This is causing parents to plan ahead and think smartly about their back-to-school shopping plans. The majority of parents report looking for deals on back to school purchases, with 49 percent planning to do the majority of their back-to-school shopping at discount retailers and 70 percent of parents reporting that they are shopping throughout the summer and starting early to score deals. More often than not, this also means getting their teens involved.
"Parents are feeling the effects of the economy and school budget cuts. As more parents are being asked to contribute basic classroom supplies, families are having to plan ahead and re-think their back-to-school shopping habits," said Shelley Solheim, Director of Financial Education at Capital One. "The silver lining is that parents are talking more with their kids about shopping expectations, priorities and needs versus wants. These are sometimes tough conversations to have—for both parents and teens—but extremely important as many teens are looking to their parents for information on money management topics like budgeting and saving."
Nearly 70 percent of parents and 84 percent of teens say they've discussed needs versus wants for back-to-school items. About half of parents and teens say they've created a back-to-school shopping budget, while 64 percent of parents and 71 percent of teens say they've made a list of back-to-school items together. These conversations are taking place at a much higher rate than in 2011. Last year, less than one-third of parents and teens reported making a shopping list or back-to-school budget.
Both parents and teens identified clothing as their top back-to-school priority, followed closely by traditional supplies, such as notebooks, pens and backpacks.
Teens Lack Practical Money Management Experience
The survey results also suggest that parents are missing opportunities to talk to their teens about money on a regular basis, beyond back-to-school time —only 33 percent of parents say they talk to their kids about money more than once a week.
Although teens report high levels of confidence in their money management skills—76 percent gave themselves an "A" or "B" grade for their current knowledge of financial responsibility—teens have limited practical money management experience. Half (49 percent) of teens haven't worked with their parents to develop a budget for saving or spending their money, even though 61 percent report receiving an allowance. Teens also lack an array of other money management experiences:
- 81 percent of teens report that they don't have a checking account
- Only 33 percent of teens have a summer job
- 9 out of 10 teens say they are not involved in paying household bills or managing the household budget
- 85 percent of teens don't use any online tools to help manage their finances
The good news is that teens have an appetite for financial education, with half (52 percent) of teens saying they want to learn more about how to manage their money. Teens are particularly interested in learning more about basic personal finance topics such as budgeting (80 percent), saving (75 percent), checking accounts (68 percent) and investing (67 percent).
Teaching Teens Personal Finance Skills
Capital One offers the following tips to help parents take advantage of the back-to-school shopping season and other opportunities to talk to their teens about money management skills:
- Make back-to-school shopping a family affair. If you're part of the 21 percent who haven't talked to your kids about back-to-school shopping at all, sit down together and make a list of what your teen already has, what they need and how much you can spend.
- Do your homework. Make back-to-school shopping something you do together and use it as an opportunity to teach your teen how to comparison shop. You can also encourage your teen to look at prices online to see how they fit with their budget before you head to the store.
- Crunch numbers together – establish a budget. Consider having your teen contribute money to purchasing school supplies and other necessities throughout the year. Discuss how much they may contribute and work it into your budget. Once you set a budget, stick to it.
- Help set goals and steps to achieve them. The next time your teen gets a windfall—from a gift, allowance or part-time job—ask them if they have a plan for their money. If not, talk about things they might want to save for and how they can create their own budget.
- Participate in the day-to-day. Teach your kids how to write checks, balance a budget and the importance of paying bills on time the next time you pay monthly bills. This gives teens an idea of how much utilities and other necessities, like auto insurance, will cost them as adults.
For more free tips and tools to talk with your kids about money, visit CapitalOne.com/financial-education.
For parents looking for financial products designed for young adults, ING DIRECT USA offers MONEY, a teen checking account with no fees and no minimum balance required. It provides a debit card where both teens and their parents receive text alerts each time a transaction is made. Capital One's Journey Student Rewards Card helps young adults build credit responsibly by offering an additional 25 percent bonus on the cash earned each month for paying their bills on time. It also offers an interactive online tool that helps them keep track of their credit history.
Braun Research was engaged to conduct 1,024 interviews with 510 parents of teenagers age 11-17 and 514 teenagers age 11 to 17 across the United States. Surveys were conducted by telephone from July 6th through July 9th, 2012. The margin of error for the interview is plus or minus 3.34 percentage points. Interviews were monitored at random. Sampling for this study was conducted across the United States using a national probability sample of all exchanges and area codes of households with someone age 11-17 living there. All interviews were conducted using a computer assisted telephone interviewing system. Statistical weights were designed from United States Census Bureau statistics.
About Capital One
Capital One Financial Corporation (http://www.capitalone.com/) is a financial holding company whose subsidiaries, which include Capital One, N.A., Capital One Bank (USA), N. A., and ING Bank, fsb, had $213.9 billion in deposits and $296.6 billion in total assets outstanding as of June 30, 2012. Headquartered in McLean, Virginia, Capital One and ING DIRECT offer a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.
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