Economics Crash Course: Teens Learn College Education Doesn't Come Cheap Junior Achievement-The Allstate Foundation Poll Shows Urgent Need for Financial Planning for Young Adults and Family Financial Conversations
COLORADO SPRINGS, Colo., May 31, 2011 /PRNewswire/ -- A new study from Junior Achievement and The Allstate Foundation reveals that teens are feeling the fallout from the recession in a number of ways. Two-thirds of teens are changing their college plans due to the recession: half are working more to pay for college and 42% now plan to attend college close to home.
Also, compared to 2010, more teens are working to pay for college (an increase of 9%) and planning to stay closer to home for school or not go to an out-of-state college (an increase of 5%). And nearly half of teens surveyed report that they are more concerned about the economy than last year and 63 percent say their families are spending less due to the recession.
"Teens face many tough decisions in their lives. Two of the biggest are where to go to college and more importantly, can they afford the high costs that come with it," said Matt Winter, president and CEO, Allstate Financial. "In today's global economy, getting a financial head-start can lead to big pay-offs in the future. That's why educating kids about money management is so important to us and to the financial health of our country."
Optimism among Teens Despite Less Financial Support
Despite the recession's changes to their lives, teens are optimistic about their hopes for the future: 97 percent of teens surveyed plan on going to college and 83 percent believe they'll be financially independent of their parents by age 24. Recent trends, however, prove these beliefs might be a bit optimistic. With economic recovery limping along, many Americans are still out of work and struggling, having to put retirement plans and college attendance for their children on hold.
According to the U.S. Bureau of Labor Statistics, the number of families with at least one unemployed member has nearly doubled from 6.3 percent in 2007, to 12.4 percent in 2010. "Previous generations of youth have had the luxury of relying on their parents for not only emotional support, but also financial support as they go through college and enter adulthood," said Jack E. Kosakowski, president and chief executive officer of Junior Achievement USA™. "Now, with many families' financial situations in limbo, this support is strained. It's more important than ever to empower teens to own their economic success, and Junior Achievement can help them along that path."
College students often count on their parents to financially assist them while in school. And many young adults even rely on their parents as they enter the workforce, whether that entails help with car payments and cell phone bills, or moving back home to save money on rent. However, the recession has altered many parents' abilities to assist their children as they transition to adulthood, which has left teens worried about their options.
Even with these financial set-backs, an astounding 89 percent of teen respondents said they'll be as financially well-off as their parents. However, only three-quarters of teens think they are currently budgeting their money successfully, and a mere 39 percent think they are effectively using credit cards.
Family Financial Discussions and a Gender Gap
Ninety-two percent of respondents say they learn about money management from their parents, yet less than half (43 percent) discuss money management as a family. The likelihood that money management discussion occurs changes based on the teens' gender: 48 percent of males say their parents talk to them about finances versus 57 percent of females.
Managing debt and saving is the basis of fiscal health, and teens need to be given the tools and experiences early on to build a solid foundation in basic money management to kick-start their future financial success.
To help parents open up a dialogue with their children about fiscal responsibility, Junior Achievement, in partnership with The Allstate Foundation, has created new, free, interactive online lessons for all age groups, which complement existing classroom lessons. Here, elementary-aged students will learn about financial decisions based on spending and savings, middle school students apply their knowledge of income to make various purchasing decisions using credit, and high school students learn more about long-term financial decisions such as paying for college or buying a car. By providing young adults with the tools they need to make smart financial decisions, Junior Achievement assists them with achieving their own personal success.
This is the twelfth year that Junior Achievement has conducted its "Teens and Personal Finance" survey. For a summary of the results, visit www.ja.org.
This report presents the findings of a telephone survey conducted among a national sample of 1,000 teens comprising 500 males and 500 females 12 to 17 years of age, living in private households in the continental United States. Interviewing for this TEEN CARAVAN® Survey was completed during the period March 3-8, 2011. The survey's margin of error is +/- 3.2 percent.
About Junior Achievement (JA)
Junior Achievement is the world's largest organization dedicated to inspiring and preparing young people to succeed in a global economy. Through a dedicated volunteer network, Junior Achievement provides in-school and after-school programs for students which focus on three key content areas: work readiness, entrepreneurship, and financial literacy. Today, 126 individual area operations reach four million students in the United States, with an additional 5.8 million students served by operations in 123 other countries worldwide.
About The Allstate Foundation
Established in 1952, The Allstate Foundation is an independent, charitable organization made possible by subsidiaries of The Allstate Corporation. Through partnerships with nonprofit organizations across the country, The Allstate Foundation brings the relationships, reputation and resources of Allstate to support innovative and lasting solutions that enhance people's well-being and prosperity. With a focus on teen safe driving and building financial independence for domestic violence survivors, The Allstate Foundation also promotes safe and vital communities; tolerance, inclusion, and diversity; and economic empowerment. For more information, visit www.allstatefoundation.org.
SOURCE Junior Achievement