Survey shows many teens underestimate the cost of back-to-school purchases, while parents miss key opportunity to share budgeting lesson with teens
MCLEAN, Va., Aug. 15, 2011 /PRNewswire via COMTEX/ --
As back-to-school shopping season kicks into full swing, a new survey from Capital One Financial Corporation (NYSE: COF) finds that parents and teenagers mostly agree on which items they need to buy for the new school year, but they have very different expectations on how much they'll be spending on back-to-school purchases.
In Capital One's 11th annual back-to-school shopping survey, both teens and parents surveyed ranked traditional supplies such as notebooks and pencils, clothes and backpacks/totes as their top three purchases, but many teens polled underestimated the cost of those items. Only 41 percent of teens expect their parents will spend more than $100 on back-to-school shopping, compared to 68 percent of parents who expect to spend over $100.
Capital One's survey also found that 43 percent of teens plan to contribute their own money to back-to-school spending, but only 15 percent of parents surveyed expect their child to help pay for the bill. These survey results suggest that many parents are missing opportunities to help their teens learn about important money management concepts like budgeting.
"This year's survey found that teens and parents are not always on the same page when it comes to expectations about back-to-school budgets and spending," said Shelley Solheim, Director of Financial Education at Capital One. "The back-to-school shopping season is often overlooked as an opportunity for parents and teens to talk about financial education principles and concepts, but it is an ideal time for teens to play a role in the household budgeting process and learn an important money management lesson."
Teens May Not be Listening
The survey results suggest that parents' efforts to talk to their teens about spending and budgeting may need to be reinforced more than once. Over half (57%) of parents surveyed say that they have discussed the difference between needs and wants with their teen, and 28 percent of parents say they have created a back-to-school budget with their child. Yet only one-quarter (26%) of teens report that they have discussed the difference between needs and wants with their parents, and only 15 percent of teens say they have created a back-to-school budget with their parents.
Overall, teens report limited practical experience managing money. Ninety-three percent of teens surveyed say they are not involved in paying household bills or managing the household budget, and almost half (46%) of teens do not know how to create a budget.
The good news is that teens have an appetite for financial literacy information, with over half (55%) of teens surveyed saying that they want to learn more about how to manage their money. Teens are particularly interested in learning about investing (88%), saving (87%), budgeting (82%), checking accounts (80%) and financing for big purchases like a car or a home (79%).
Teaching Teens Personal Finance Skills
To help young people and their parents discuss personal financial planning, Capital One and Junior Achievement have created a new innovative online financial literacy simulation, JA Finance Park Virtual, which gives students a glimpse of what it takes to be successful in the 21st century global marketplace. Through the simulation, available online at financepark.ja.org, students design personalized avatars and are assigned a randomly-generated life-scenario, including a fictional job, age, income, educational background and family. Based on that scenario, students are then tasked with meeting real-life needs such as successfully developing a budget, maintaining a household and pursuing a career.
In addition, Capital One offers the following tips to help parents take advantage of the back-to-school shopping season to teach their teens 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.
- Consider having your child contribute - Capital One's survey suggests that many teens are prepared to help pay for back-to-school shopping. Discuss how much they may contribute and work it into the budget you develop.
- 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. Even if you don't plan to shop online, encourage your teen to look at prices online to see how they fit with the budget before you head to the store.
Braun Research was engaged to conduct 1163 interviews in 653 households with 653 parents of teenagers' ages 11 through 17 years old and 510 teenagers ages 11-17 years old across the United States. Surveys were conducted by telephone from June 18-30, 2011. The margin of error for the interviewing is +/- 3.8 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 11-17 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 (http://www.capitalone.com/) is a financial holding company whose subsidiaries, which include Capital One, N.A. and Capital One Bank (USA), N. A., had $126.1 billion in deposits and $199.8 billion in total assets outstanding as of June 30, 2011. 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.
SOURCE Capital One