According to the National Center for Education Statistics, the cost of tuition and room and board at public colleges and universities has increase by more than 40 percent since 2001. Coupled with the lingering effects of the recession and their impact on parents’ finances, this increase in college costs represents a significant financial challenge for many families. Further complicating the issue of how to pay for college is the fact that teens and their parents may have widely varying expectations around how to do it.
A new, national study from Junior Achievement and The Allstate Foundation research reveals some startling findings. The Teens and Personal Finance Survey, now in its 16th year, gauges teens’ attitudes and behaviors around money. For the first time in the survey’s history, we surveyed parents as well to compare and contrast their responses to those of teens.
We found nearly half (48 percent) of teens think their parents will help pay for college. However, only 16 percent of parents report they plan to pay for their child’s post-secondary education. This finding emphasizes the need for parents and their kids to have regular, age-appropriate conversations about money -- especially when planning for major expenses such as college.
Many young people want to learn about managing money from their parents. A significant majority of teens we surveyed (84 percent) say they look to their parents for information about how to manage money.
Conversations about money are tough, and parents may feel ill-equipped to handle them. Some parents may feel uncomfortable talking about money matters with their kids because they are uncomfortable with the subject, or because of their own financial missteps. This is where school-based programs can come in, to provide students with important personal finance education.
I encourage parents to work with their child’s school to provide students with programs that teach real-world money management skills, such as those provided by Junior Achievement (JA). Students learn how to prioritize needs and wants, how to create and stick to a budget, and about the importance of saving.
Third party evaluation proves that students who participate in JA are more confident in their ability to manage and control their finances. At every grade level, middle and high school students who participate in JA demonstrate a gain in knowing how to make ends meet, plan for future expenses, keep track of assets and debts, stay informed of financial events and choose financial products.
Parents today may face more -- or at least different -- challenges than parents in previous years, but thankfully there are resources available to help today’s young people face their future ready to manage their finances with skill and confidence. Learn more at www.JAColorado.org.
This post was written by Robin Wise and was submitted as a part of Money Smart Week by Junior Achievement-Rocky Mountain, Inc.