Many parents will miss out on this key opportunity to talk to teens about money, finds survey
McLean, Va. (August 11, 2009) – As the back-to-school shopping season approaches, many parents across the nation are clutching their purse strings tight for the second year in a row, according to Capital One Financial Corporation’s (NYSE:COF) ninth annual back-to-school shopping survey. More than half of parents surveyed
(58 percent) said that their back-to-school shopping will be impacted by economic concerns. Nearly 20 percent plan to spend less than they did last year on school materials.
“Consumers around the nation are returning to basic financial principles such as budgeting, shopping around for the best deal and stretching every dollar. Unfortunately, these lessons do not always get passed down to teens,” said Shelley Solheim, director of financial education for Capital One. “Back-to-school shopping season is an optimal time to talk with teens about smart money management skills, but this year’s survey showed that few parents are seizing this opportunity.”
In the survey of more than 1,150 parents and teens, more than 80 percent of parents reported they had not worked out a budget with their teens for back-to-school shopping. As a result, teens surveyed grossly underestimated the amount of money their parents would spend on school supplies. Most teens (23 percent) thought their parents would spend less than $50 per child, compared to most parents (43 percent) who estimated they would spend more than $125. Almost half of teens (48 percent) did not plan to contribute money to back-to-school shopping.
Areas where parents surveyed plan to cut back spending include clothes (63 percent) and electronics such as iPods and personal mobile devices (31 percent.) Although clothes and traditional school supplies such as notebooks, backpacks, pens and pencils continue to top the list of parent and teen must-haves for school this fall, more parents this year are planning to do their back-to-school shopping at discount retailers (47 percent, compared to 41 percent in 2008.)
The survey also revealed a large gap between the financial education teens say they want from parents and what they are receiving. This year, half of teens (50 percent) expressed an interest in learning more about money. Most teens (70 percent) wanted to learn more about financing for large purchases such as a car or home. Although teens said they prefer to learn about money from their parents over friends, reading a book or taking a personal finance class, only 24 percent said their parents discuss money management and banking concepts with them regularly. Thirteen percent of teens said their parents never discuss money with them.
Teaching Teens to Shop Smart
“It’s important to remember that most teens want their parents to teach them about money,” Solheim said. “If parents find it difficult to get started, there are plenty of free resources designed to help break the ice and facilitate money conversations.”
Capital One offers parents the following tips to help their teens develop good money management skills:
- Make back-to-school shopping a family affair - It’s a great opportunity for teens to learn valuable hands-on lessons from their parents.
- Do your homework - Talk to teachers in advance and try to get a list of required school supplies so you can buy in advance (maybe even on sale.)
- Crunch numbers together – establish a budget - Determine how much you’re able to spend in advance and stick to the amount.
- Make a list - Prepare your shopping list in advance. Try to distinguish between “needs” and “wants” on the list and prioritize the needs first.
- Shop smart - Make sure you shop around for the best price and the best quality and use coupons when possible.
Get more tips
Capital One offers a number of resources on budgeting and savings and has partnered with the national consumer organization Consumer Action to create a complete guide for parents called Talking to Teens about Money, available at www.money-wise.org. Parents and teens can also receive daily financial education tips on Twitter, follow us @teachingmoney.
For additional help, parents and students can visit the Jump$tart Coalition for Personal Financial Literacy home page at www.jumpstart.org and search the “clearinghouse” for financial curriculum and education materials.
For the Capital One Study Back-to-School study, Braun Research was engaged to conduct 1152 interviews in 819 households with 651 parents of teenagers age 11 to 17 and 501 teenagers age 11 to 17 across the United States. Surveys were conducted by telephone from June 29th through July 6th, 2009. The margin of error for the interview is plus or minus 3.56 percentage points. Interviews were monitored at random.
Sampling for this study was conducted across the United States using a national probability sample of all exchanges and area codes of households with someone between the ages of 11 and 17 living there. All interviews were conducted using a computer assisted telephone interviewing system. Statistical weights were designed from United States Census Bureau statistics.
About Capital One
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A. and Capital One Bank (USA), N. A., had $116.7 billion in deposits and
$146.3 billion in managed loans outstanding as of June 30, 2009. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Capital One, N.A. has approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia, and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.
Contact: Shelley Solheim 804.284.9366