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Teens Feel Unprepared to Finance Their Futures

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Monday, May 9, 2022

The last two years have created uncertainty and anxiety for many Americans.  One group feeling an increased level of anxiety about their financial future is the 2022 class of graduating high school students

The fifth annual JA Teens & Personal Finance Survey shows that teens are uncertain about their ability to make good financial decisions about their future. The immediate effect is evident in their education choices.

More than two-thirds (69 percent) of the teens surveyed said rising costs of college have affected their decision to continue with higher education after high school, 28 percent are now considering only in-state schools, and 22 percent plan to live at home while they go to college.

One in five teens lacks the foundation of financial skills.  They are missing some of the most basic knowledge and this can seriously affect their financial future.

  • 32 percent don’t know the difference between a debit card and a credit card
  • 46 percent don’t know what a 401K is

Addressing the problem

The solution to this problem lies in financial education. Unfortunately, the US has a way to go in this regard. On an international financial literacy test of 15-year-olds, the U.S. ranked 7th out of 15 countries, trailing China, Canada, Russia, and Australia, and was just slightly better than Poland.

The top concerns for teens are a better understanding of how student loans work (39%), knowing how education ties to jobs (38%), or having access to lower-cost alternatives (32%). Since 2020, 21 states have required high school students to take a personal finance course.

Florida joined the 11 states that require all high school students to take a personal finance course before they graduate. There are 54 personal finance education bills pending in 26 other states, according to Next Gen Personal Finance’s bill tracker.

Other financial education options

There are many online financial literacy courses available online. “Teens interested in learning more about how they can increase their knowledge and understanding of basic financial concepts have many options,” says Scott Mass, Senior Vice President, Investments, for David Lerner Associates. Parents can encourage their teens to do a search online for personal finance courses.  Many of them offer interactive material such as quizzes, videos, and worksheets.

Most parents say they wish they had learned more about managing money when they were young.  Encourage your children to learn as much as possible about handling their finances, so they have a better chance of a successful financial future.

 

 

 

 

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC.

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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Lawrenceville, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 800-367-3000 Visit our website: www.davidlerner.com

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