FCS Issue
Teen Spending Increases as Personal Finance Knowledge Wanes
Lynn R. Russell, Ph.D.
Family Resource Management Specialist
Arkansas Cooperative Extension Service
U.S. teens spent an estimated $172 billion during 2001, $17 billion more than the previous year, according to a study conducted by Teenage Research Unlimited (TRU). The study further revealed that teen consumers spent an average of $104 per week. This figure includes teens' own discretionary spending as well as spending they do on their parents' behalf.
While students have ample access to money, they lack the knowledge and skills needed to spend their dollars wisely. Figures released by the Jump$tart Coalition for Personal Financial Literacy, show that high school students know even less about credit cards, retirement funds, insurance and other personal finance basics than they did five years ago.
Founded in 1997 and based in Washington, D.C., the goal of Jump$tart is to ensure that students have the skills to be financially competent upon graduation from high school. This non-profit group partners with federal agencies, universities, associations and sponsors of education programs to make this goal a reality. Their recent nationwide survey measured 12th graders' level of knowledge of personal finance basics and compared the results with those from similar surveys conducted in 2000 and 1997.
On average, the students in the 2002 survey answered 50.2% of the questions correctly - a failing grade based upon the typical grade scale used by schools. The average scores in the 2000 and 1997 surveys were 51.9% and 57.3% respectively.
The Jump$tart survey, conducted this past December, January and February, consisted of a written 45-minute exam administered to 4,024 12th graders in 183 schools across the United States. A copy of the survey questionnaire is posted on the coalition Web site at www.jumpstart.org in the "Downloads" section.
Jump$tart now has state coalitions in about half of the states. In Arkansas, Jump$tart is comprised of representatives from the Social Security Administration, the IRS, the Arkansas Department of Workforce Education, Harding University, Consumer Credit Counseling, Credit Counseling of AR, the Council on Economic Education, the U of A Cooperative Extension Service, the UAPB Cooperative Extension Program, BancorpSouth, the AR Securities Department and the Federal Reserve Bank of St. Louis. The group meets regularly to plan training and share ideas and programs for teaching personal finance.