This is a guest article by John M. Box, Ph.D., the Senior Vice President of Education, Junior Achievement Worldwide.
News about the economy is not only catching teens’ attention, but now it is playing a significant role in their lives. While many grow up assuming they will go to college, teens all over the U.S. are beginning to realize that their dreams of a four year college education may be hard to attain. Junior Achievement and The Allstate Foundation conducted a poll of U.S. teenagers to see how the economy was affecting their college plans, with some surprising statistics:
- More than half of teens surveyed (55 percent) said their college plans had changed due to the economy.
- More than a third (37 percent) said they would attend college in their home state to save on tuition costs out of state.
- Nearly a third (32 percent) said they were working more to pay for college.
- Eighteen percent said they were going to attend a community college instead of a four-year institution.
So, how does an 18 year-old supposed make a decision that could cost them thousands of dollars, stress and heart ache? They shouldn’t have to go it alone.
Now is the time when parents should step in to offer much-needed advice, even when teens don’t’ want to hear it. However, sometimes that advice is hard to come up with on your own. Junior Achievement has created a new series of free, downloadable teaching tools to help parents talk to their children about smart money management. The lessons, called Junior Achievement $ave, USA, are posted at www.ja.org, and cover such topics as budgeting, the importance of saving, understanding the cost of credit and how to use it, and planning how to pay for college. For example, one way is to use a Roth IRA for college savings. The lessons are sponsored by The Allstate Foundation and can serve as a great learning tool for children, teens and parents.
Now that you’ve got the tools to talk about financial literacy with your kids, the next step is to take action. Start a Money Management Action Plan with your teen to figure out what they’re hoping to achieve in the future, both professionally and personally. By starting the discussion, finding out what they want and figuring out a way to get there, this will lead to not only sound financial decisions, but should help them mature as adults.
Having the difficult discussions with your children now can save you all from even more difficult decisions down the line resulting from poor financial decisions.
About Junior Achievement® (JA): Junior Achievement is the world’s largest organization dedicated to inspiring and preparing young people to succeed in a global economy. Through a dedicated volunteer network, Junior Achievement provides in-school and after-school programs for students which focus on three key content areas: work readiness, entrepreneurship, and financial literacy. Today, 137 individual area operations reach more than four million students in the United States, with an additional five million students served by operations in 123 other countries worldwide. For more information, visit www.ja.org.