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HSFPP Weekly Update # 167—Budgeting: Capital One's Annual Back to School Survey
Message from Bob: A recent Capital One survey illustrates the need for financial education in the classroom. Their press release says, “This year's survey of 1,000 parents and teens finds that teens are eager to learn about managing their money wisely but aren't getting the basics at school - only 14 percent of them have taken a class on the topic - and many said they would prefer to learn about money from their parents.” This reinforces my comments in Update # 165, in which I suggested that parents and schools both need to be teaching financial education.
One reason so few students are getting a financial education could be that it is usually taught in Family & Consumer Sciences classes, which college-bound students are discouraged from taking. There is the stereotype that college-bound students don’t need “Home Ec,” and they are encouraged instead to take advanced placement courses, which still do not provide a financial education. Is it any wonder that there has been an increase in bankruptcy filings in recent years, leading to new laws that have made bankruptcy more difficult to attain? Is it any wonder that so many consumers are getting into financial difficulties? If anything, guidance counselors and college admissions officers should be encouraging students to get a financial education.
As educators you have the opportunity to help teens set up a budget—many for the first time—based on their wants and needs, both short- and long-term. As teenagers track their expenditures they can see whether their money is going toward budgeted items, impulse purchases, or unexpected expenses. Many of us have to learn the hard way to set money aside for unexpected expenses; e.g., a gift for a friend’s birthday when they are invited to a party at the last minute, vehicle repair if they own a car or truck, computer repair, or to replace a lost cell phone, to name only a few.
Web Site Pick of the Week:
Since we have so many new subscribers this fall, we are once again highlighting the NEFE High School Financial Planning Program’s Web site, which includes all the material found in the student guide, activities, educational games, and much more.
Note to Educators:
Have students read the article and discussion questions. Then use the questions in a class discussion about budgeting. Also ask students about their experiences in handling money. For example, what have they typically done with weekly allowances and holiday or birthday money gifts in the past?
Discussion question 4b empowers teens to get involved in what they want to learn based on the financial topics that interest them the most.
In the New$... Teens Are Eager to Learn about Money, But Parents Continue to Overlook Important Learning Opportunities
A few interesting findings from Capital One’s sixth annual survey of 500 parents and 500 teenagers:
“Forty-nine percent of teens are eager to learn more about money management - 35 percent would like to learn from their parents. When asked about the topics they'd most like to learn about, teens express interest in checking accounts, budgeting, investing, saving, and financing for large purchases.
“Only 18 percent of parents are discussing back to school budgeting - a decline from the 24 percent who did so last year.
“Only 43 percent of parents have discussed the importance of needs versus wants, compared to 64 percent who did so last year; and a surprising 42 percent of parents have not taken any steps whatsoever to discuss financial basics.”
Back-to-School Shopping: “Are teens contributing to the bill?”
“When it comes to sharing the cost of back to school shopping, 53 percent of teens plan to contribute to the bill, with almost 60 percent responding that the money will come from job earnings. Teens say the remainder will come from an allowance or savings (31 percent) or a cash gift (17 percent).”
“Who's ahead of the financial curve - teen girls or boys?
“Teen girls are more likely to contribute to back to school shopping - 58 percent of girls will contribute to the bill versus only 49 percent of teen boys. Survey findings also indicate that teen girls tend to think ahead - 77 percent of teen girls are eager to learn about financing for large purchases such as a car or home, compared to 63 percent of boys.”
Source: “Capital One's Annual Back To School Survey Finds Teens Eager To Learn about Money, But Parents Continue To Overlook Important Learning Opportunities...” 7/17/06. [Our italics on section headings]
Class Discussion Questions:
1.) Are you surprised that females are more interested in contributing and saving for large purchases? Doesn’t this go against stereotypes?
2.) Approximately how much did you and your parents spend for back-to-school items this year? How much of the costs did you pay?
3a.) Do you receive an allowance? Yes ___ No ___.
3b.) Have you worked on any budgets together? Yes ___ No ___.
If so, how did this go?
3c.) Do you feel you learned anything from developing a budget?
4a.) If you could select five financial topics that you want to learn about what would they be?
4b.) Seven sheets are posted around the room. Each one of you, write your top pick on one of those sheets. If the person before you already wrote your topic, mark an “x” next to it. The topic with the most votes will be covered during the next session following budgeting, and the topic with the second highest number of votes will follow until the top eight financial topics have been covered.
Activity for Teenagers:
Those who have the student guide should go to Unit 3: Budgets. Those who do not have student guides can go to the following Web site: http://www.nefe.org/hsfppportal/includes/main/home.asp?page=13000. We highly recommend that you read the entire section on budgeting.
Track your expenditures for a week.
Write on a separate sheet of paper what you consider necessary and unnecessary expenses.
Go to http://www.nefe.org/hsfppportal/files/13420_Assignment%203.2.pdf, print and fill out the budget form, and have it ready to turn in during your next session.
Kentucky High School Financial Planning Program
The purpose of this Web site is to assist county Extension agents, credit union educators, and high school teachers in improving the economic well-being of our constituency, beginning with today’s students; and also, to assist teachers in Kentucky in meeting KERA’s goal that all students become technologically literate. Weekly Updates are provided by the University of Kentucky Cooperative Extension Service, and are free to all educators.