Optimistic Teens May Need Financial Reality Check, Schwab Survey Shows

Optimistic teens may need a reality check about the world of personal finance awaiting them, according to Schwab’s 2007 Teens & Money survey. Most teens believe they’ll achieve considerable success in the adult financial world, yet may not realize what it will take to achieve it.

Highly motivated by money, eight in 10 teens ages 13-18 agree that "it's important to me to have a lot of money in my life," and nearly three-quarters (73 percent) believe they'll be earning "plenty of money" when they're out on their own.

What Teens Don't Know

Nearly two thirds (62 percent) of American teens ages 13-18 believe they’re prepared to deal with the adult financial world after high school, and a similar majority (63 percent) say they’re knowledgeable about money management, including budgeting, saving and investing.

Yet when probed on specifics, teens reveal gaps that don’t correspond with their confidence. For example, fewer than half consider themselves knowledgeable about how to budget money (41 percent), how to pay bills (34 percent), how credit card interest and fees work (26 percent) or whether a check cashing service is good to use (24 percent).

Teens Want to Learn and Look to Their Parents

Nearly nine in 10 teens say they want to learn how to make their money grow (89 percent). Two-thirds (65 percent) believe learning about money management is "interesting," and 60 percent say it’s one of their top priorities.

Almost two-thirds (64 percent) would rather learn through experience than in a classroom.

However, only about one in four (28 percent) report "My parents/guardians have taught me about money by giving me a lot of experience budgeting, spending and saving it."

"These findings point to a huge opportunity for parents and grandparents," said Carrie Schwab-Pomerantz, president of Charles Schwab Foundation. "The best single piece of news from the survey is that teens not only want the keys to the world of adult finance, they are actually looking to their parents for driving lessons."

About the Teens & Money Survey

The 2007 Teens & Money survey was conducted by StrategyOne, an applied research consulting firm, on behalf of Schwab and Boys & Girls Clubs of America. The nationally-representative online survey polled 1,000 American teens between the ages of 13-18 to better understand their views, behavior and knowledge of spending, saving, borrowing and earning money. The survey, which has a margin of error of plus or minus 3.1 at the 95 percent confidence level, was conducted using the field services of Harris Interactive.

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