Teens Feel Unprepared to Finance Their Futures

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.

 

 

 

 

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