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STEVE CHIOTAKIS: These days, a lot of people are talking about saving. That includes teenagers. Yeah, I know — when I was 15, 16, and working in my dad’s restaurant, all I could think about was the arcade. Or buying a car and putting gas in it. I didn’t have a clue about how to save money or being reasonable about spending it.
So how much does the average teen know about it? Andrea Domanick says not much. She’s a senior at Wesleyan University and says personal finance is still a taboo subject for parents to broach. They only talk to you about it when you’ve mismanaged it. In other words, when it’s too late.
Andrea Domanick: My friend Amanda Dorinson is one the most brilliant people I know. But when it comes to managing her money, she’s clueless.
Amanda Dorinson: I have no idea exactly money in my checking account right now. I have a paycheck I’m sitting on that I haven’t deposited yet. I have doctor co-pays that I know are coming up…
Growing up, Amanda remembers her mom showing her how to balance a check book. But she was 15 and was more pre-occupied with her algebra homework than accounting. It wasn’t until she went to college and made her first financial blunder that her mom gave Amanda her first real lesson in money management.
Dorinson: I was having a very rough day in November during my sophomore year of college and I decided to take it out on my mother’s credit card at Bergdorf-Goodman. I blew $500 on an M by Missoni dress that I absolutely did not need. Let us just say we had to think of a very involved payment plan.
Actually, it’s not that surprising Amanda had to learn about money management the hard way. A survey from Charles Schwab found only about 30 percent of parents had even bothered to explain how credit card interest and fees work. I make my own confession to Amanda.
Andrea: Yeah, I find myself kind of confused when I think about who should’ve been teaching me how to manage my money. I feel like all the people who should’ve been teaching us about it are pointing fingers at each other. It’s almost like sex-ed, you know what I mean?
Dorinson: Oh definitely, because you have the parents saying, “Oh well, the school should really teach the kids about sex-ed because they’re qualified to it.” And the school thinks, “Oh no, that’s an intimate issue that a family should work out itself.”
Sitting there talking with Amanda, I realized I’ve known her forever, but this is the first time we’ve felt comfortable talking about money
Chuck Currier: It’s funny you’d think that personal finance would be shared between parents and kids, and yet, we have a real strange thing between our egos and money and how much do we earn.
That’s Chuck Currier. He teaches economics — and sneaks in personal finance management — at Mira Costa High School in Manhattan Beach, Calif. We met up at a local mall.
Currier: As a kid I can remember asking my dad, “Gosh, how much do you make at work?” And most kids will have gotten the same answer that I did: “I make enough to pay the bills” or “Why do you need to know?”
Currier says that the modern world’s thrown another wrench into the equation.
Currier: It’s not odd that kids have no idea where money comes from and where money goes at first. It’s because we’ve kind of lost that visual link of dealing with hand-to-hand, person-to-person with money.
Turns out Currier was right on the money.
We saw a group of teenage girls checking out clothes at Nordstrom and decided to ask them, “So, how do you manage your money?”
Connie Weiss Miller: Hi. I’m Connie Weiss Miller and I’m 15.
Christina: Hi. I’m Christina and I’m 16.
Andrea: So, what do you guys know about managing your personal finances?
Connie: I know you’re supposed to save some and spend some? And like, give some away to the poor.
Christina: Me and my sister both got a credit card two years ago, just because they wanted to teach us how to save our money.
Connie: You have a debit card.
That’s Connie, reminding Christina that she doesn’t have a “credit card” but a “debit card.
Christina: Yeah, debit card, I don’t even know what that is, but…
Andrea: Do you talk to your parents very much about money management?
Christina: Um, we never talk about it we, just kinda have to learn by ourselves. If you want to buy something, you save your money, because they never give us money, unless it’s for like, food and stuff.
Come to think of it, that’s all my parents taught me. I did learn the importance of making the money I spend. But nobody told me the responsible part is how you manage that money.
Judy Tanka: You know, I kind of feel really embarrassed that I haven’t done a better job teaching you from an early age.
That’s my mom, Judy Tanka. I sat down with her one night to ask her, “I’m about to graduate from college — why don’t I know how to manage my money?”
Judy: What I recall is that I tried, but you were so empowered by the ability to earn — and fairly decent money — and you were very haughty about it, “This is my money, I’m earning it, please don’t dictate to me what do with it.”
Andrea: I don’t remember having that attitude at all!
Judy: Well I do!
When I was 17, I scored a high paying job as a lifeguard, and eventually, I made over $15 an hour.
Judy: And I remember looking at your balance thinking, “Where did all that money go?” I probably did throw a fit, which was not a best way to teach somebody money management.
So, I spent hundreds of dollars on lattes and concert tickets. It kind of makes me cringe to think of who knows what else.
My mom says I wasn’t ready to learn, but I say that’s no excuse. So I asked Chuck Currier how parents can teach their kids to manage money. He says: Don’t wait till your kids start earning money — start by showing them what you do with yours.
Currier: All of the things that we see as adults as being very boring can be very very interesting to kids. Paying my monthly bills is real boring to me. However, when I said to my daughter one day, “Do you want to see how I pay all the bills and I’ll let you write the checks?” Holy cow! She was completely fascinated. Things like that is a big boost in getting a conversation started.
Currier says ultimately parents just can’t wait for teachers to act and educators can’t afford to wait for school officials to fund a personal finance classes.
Currier: The things that we learn in our life, we don’t just learn them in a class at school, you don’t just learn them at home from your parents. It needs to be approached on all fronts.
So instead of passing the buck, adults can finally teach young people how to save one.
I’m Andrea Domanick for Marketplace Money.