Issue date: May 2, 1999

Young, rich, smart.

Nearly 200,000 answer USA WEEKEND's 12th Annual Teen Survey.
Savvy savers
The survey shows
Findings
Special Report: Teens & Money

By Jean Sherman Chatzky

Savvy Savers
Our survey also demonstrates they are savvy about saving it. Nearly two-thirds of teens surveyed say they have saved money "in the past week.'' Only 8% say they aren't saving at all.

The reason for their diligence: The survey shows today's teenagers are highly sensitized to the role of money in their lives. More than half say it is very important when it comes to getting a good education, choosing a job and succeeding in life.

"You have to think long-term," says Brooke Richey, 17, a senior at Frankfort High in Ridgeley, W.Va. "I know how expensive college is - and I know you have to go to college if you want to do something important. That's why, instead of going shopping every weekend, I save my money."

Says Gen X money expert Jonathan Hoenig, host of the Chicago radio show Capitalist Pig: "Teens might just be the most savvy of all of us. They've seen the carnage - their parents downsized in the early '90s, stocks took a fall - and they've come to understand the importance of having money and the importance of keeping it."

Eighth-grader Melissa Flowers, of Decatur, Ala., is a good example. She'll earn as much as $10 an hour as scorekeeper for the Dixie Girls softball league this spring. She receives no allowance. Yet she's expected to pay for the bigger purchases in her life, and is saving for a summer trip to Greece and Italy. She does her own shopping, not just for clothes and compact discs, but often for things for the family. And she looks forward to finding a high-paying job someday.

Like Melissa, 42% of teenagers expect to earn $75,000 or more a year by the time they're 30. (For a reality check, today's average 30-year-old earns about $27,000, according to government statistics.)

Melissa, 13, wants to be a stockbroker. Her reasoning: "They make a lot of money. And they dress really well."

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The USA WEEKEND survey shows:

Teens say they're smart about money. 4 out of 5 consider themselves financially savvy. Even in sixth and seventh grade, 1 in 5 consider themselves experts - with sound financial advice to impart to their peers. Matthew Flynn, a sixth-grader at Mars Area Middle School in Mars, Pa., suggests putting half your income into savings, the other half in your pocket. It's a system that works for him: His $550 bank balance is building fast.

Another impressive sign: Even teenagers who feel insecure with money know enough to want to learn. "When I have money, I don't know if I should buy CDs or save it," says Tia Hays, 13, a seventh-grader at Conneaut Lake (Pa.) High School. "I'd like to learn how to save for things I really need."

Teens control their own money. Overall, 75% say they are in charge, a percentage that rises with age. Matt Terrill, 14, of Holt, Mich., recommends that teens learn to budget now, because it'll be tougher to master later. Matt's parents got him and his brother Visa cards when they turned 13 so they'd learn to make payments responsibly. "I have a job, so I pay my bills," he explains. "My brother has gotten his Visa taken away twice."

They're not just rich - they spend billions. Teens spent a record $141 billion last year, an average of $4,548 each - and a gold mine that has everyone from Hollywood executives to retailers scrambling to produce new teen-targeted movies and magazines. Almost half the survey respondents had spent at least $20 in stores within the previous week. A third had gone to a movie; one-quarter had bought CDs; a fifth had bought a coffee drink.

They're also big savers. The overwhelming majority - 9 in 10 - report they are saving money. Girls save mostly for college, boys for cars, and younger students for nothing in particular.

Still, parents are teenagers' primary source of income - and information. Where are teens learning so much about money? From Mom and Dad, three-quarters of teens report. Also, almost half rely on parents for most of their spending money - either from an allowance or by just asking for it. Two-thirds of those who took our survey had asked for cash in the previous week. Even the richest teens in history need their parents.

FINDINGS

Half work for what they have. They earn most of their money through part-time jobs, baby sitting or household chores. The other half of teens are given most of their money.

They believe they have money know-how. 4 in 5 think they have financial savvy. Younger kids think they know more than older ones. And where are they learning so much? From their parents, say 3 in 4.

Teens accept responsibility. A majority believes parents and teens should share car, clothing and college expenses. And teens think they should pick up the tab for entertainment.

They have enough.Two-thirds say they generally have enough money. Teens who took the survey had an average of $19.76 in their pocket. (12% had more than $50 on them.)

They are big spenders ... Almost half had spent at
least $20 in stores in the previous week.

... and big savers. 6 in 10 are saving money. No. 1 item they are saving for: a car or car-related items. College is third.

They worry about family finances. Almost half say
they sometimes worry; 1 in 10 worry a lot.

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