Statistics show that teens have the most disposal income compared to adults. The biggest spending trap for teens is clothing. Teens often try to keep up with the latest trendy fashion and find themselves spending most of their money buying clothes every year. Keeping up with the fashion trends means teens are buying more name brand clothing then other clothing. The web has made it easy for teens to shop and not leave the house. A survey showed that 70% of teens would rather shop online. While friends are a big influence on fashion trends, social media allows teens to see more of what other teens their age are wearing in other parts of the world.
The second trap is electronics. Every year, a new and improved device is developed and it’s a “must-have” for teens! And those teens making their own money, will pay whatever it costs to get it. These devices include: cell phones, tablets, and video games. Teens are willing to pay full price for an iPhone just to be the first one to have it.
The third trap is food. Over 20% of teens spending is on food. More teenagers are drinking coffee also. The most popular places teens frequent are McDonald’s, Chipotle, Starbucks, and Taco Bell.
TEACH GOOD SPENDING HABITS
While teens are working and making a lot of money, statistics shows that teens are spending more than they make. Where is that extra money coming from you ask?…PARENTS. Instead of teaching teens to save and budget, teens are spending their money on “stuff” and going to parents when they need money for other things, such as school activities, gas money, and the prom. It is okay to help teens, especially if they are working part-time; however, we should not hinder them when it comes to money management.
Not all teens are hardcore spenders, but there are lot who lack basic money skills. As parents, we have to be responsible to teach our teens good spending habits. Those habits include:
- Opening a checking account and reconciling it regularly.
- Saving a portion of their money for important expenses (i.e. savings account, putting extra change in a jar).
- Shopping for bargains, as opposed to paying full price (i.e. shop for clothing at the end of the summer and after the holidays).
- Monitor income and spending on a monthly basis (create a budget).
- Hold them more accountable for other expenses, including prom, gas, car maintenance etc…
- Purchase new devices after the “hype” dies down.
- Reduce entertainment spending and put the extra money in savings.
- Encourage them to save for something they want and offer to meet them half-way (i.e. a car, vacation, elaborate prom dress, etc…)
Teens would do better if they knew better! 😀