Teens spend lots of money — nationally, $122 billion annually — yet they lack the know-how to spend that money wisely. These figures are from a recent survey by the Jump$tart Coalition for Personal Financial Literacy, a coalition of twenty-five organizations, including Cooperative Extension.

"In 1997’s survey of teen consumer skills, the average score was 57 percent. That’s failing, no matter how you look at it," says Barbara J. Bristow, consumer educator with Cornell Cooperative Extension. Only 5 percent of the teens scored a "C" or higher.

The survey is based on a test administered to 1,500 twelfth graders from schools across the United States. The survey summarizes the teens’ consumer-related knowledge of credit, taxes, retirement, insurance, inflation, and budgeting.

Some of the mistakes the students made on the test would cost them dearly in a real-life situation. Two-thirds thought they would have no liability if their credit card was stolen and used by a thief; while less than 15 percent of those tested had basic information about the stock market. One-third of the students thought that retirement income received from a company was called Social Security, and 20 percent thought they could not see their own credit record.

That lack of consumer knowledge is more detrimental to teens because it is accompanied by a high rate of consumer activity. Thirty-six percent of teens eighteen to nineteen years old have their own credit card while 14 percent have access to their parents’ credit cards. Another 37 percent want, or have recently applied for, a credit card.

Most of the teen buying was categorized as discretionary spending. It’s not "needs" like rent, phone bills or medical expenses, but "wants". Purchases such as designer jeans, name-brand sneakers, snacks, and meals out. "There are long-term implications of this combination of credit, spending, and lack of consumer knowledge," Bristow says. "It’s easy to get into debt and never get out, especially if teens enter the labor market at low salaries and spend some years at entry level wages while they are also, for the first time, paying rent, utility bills, and outfitting an apartment. Debts climb, and it can get difficult to come out from under."

With interest rates on credit cards used by some teens climbing to 21 percent and higher, it unfortunately follows that some teens have debts of eight and ten thousand dollars, not counting any student loans they might have. "Some teens can be in for a rude awakening," Bristow says.

Consumer groups, concerned for this financially at-risk population, are discussing new educational standards that will teach family resource management as part of high school curriculum. "Some financial management is being taught, but in a piecemeal fashion," Bristow says. "We need to make a coordinated effort to ensure that our teens don’t graduate from high school into the real world without knowing how that real world functions financially."

Cornell Cooperative Extension of Erie County has several resources to help teens manage their money. One excellent resource is Financial Fitne$$ for Young Adults. This workbook is designed to help young adults (13–19 yrs.), who have not yet moved out on their own, gain a good understanding of money control and management. With many short articles, charts, examples, case studies and paper and pencil worksheets, readers will learn about how values affect purchase decisions, how to save for large purchases, how to evaluate banking options, and how to keep good financial records. Practice is provided in planning, then tracking expenses to gain better financial control. This workbook is an excellent supplement to other curricula, such as It All Adds Up or High School Financial Planning, since it involves young adults in analyzing and modifying their own personal money behavior. Financial Fitne$$ for Young Adults is available for $5.00 by sending your request, with payment, to

Cornell Cooperative Extension of Erie County
21 South Grove Street – Suite 310
East Aurora, NY 14052-2345

For more information on this, as well as other financial management topics, call 716­652­5400, ext. 134.