Teen spending impacted by the downturn

The tough economy is now being felt even in the most youthful group of consumers. The 2011 Teens & Money Survey was just introduced by Charles Schwab & Co. The study says that teen spending is down quite a bit.

Pinch felt by every person

Traditionally, teens ignore economic trends and spend impulsively no matter the crunch on the purse strings at home. There was a 14 percent decrease in teenager purchasing this year. That is new. The impact is significant. As a group, teens spend an average of $125 billion in the U.S. each year.

No budge on home entertainment

Teen purchasing has dropped in nearly all the markets which they traditionally impact probably the most: apparel, beauty products and entertainment activities like restaurants, concerts and movies. Home entertainment seems to be the only place teens continue to spend lots of money. Music, DVD and video games rose from 7 percent to 8 percent of teen purchasing.

Paying attention to what is going on

About 90 percent of surveyed teenagers said the downturn impacted them in some way, as shown in the Schwab study. Schwab believes that teenagers have become more aware of finances. This is compared to four years back. Most said they were more appreciative of the things they have and are less likely to spend impulsively.

Calling them the ‘Recession Generation’

Senior vice president of Schwab Community Services is Carrie Schwab-Pomerantz. She said, “It seems clear that the great recession has changed the mindset of teens. It has given these ‘Recession Generation’ youth(s) a deeper appreciation for what they have and how hard their parents work. This may be the silver lining to the economic downturn.”

Educate at home

“To help quench their thirst for material goods, teens appear to have opened up to the idea that learning about money management is a potential solution to the problem,” said Bryan Sommer, founder of Kids Money Management.

The majority of the teens surveyed cited their parents as their main educators on money matters. About 82 percent of adolescents in the survey said they knew basic financial management. They said their parents taught them this. Even 77 percent said that their parents were role models when it came to finances.

Unemployment a factor

Joblessness accounts for some of this trend in teenager purchasing. The teen joblessness rate, at 22 percent, is the lowest it has been in 10 years.

Articles cited

Newser

newser.com/story/57269/recession-wary-teens-cut-back-on-spending.html

Commoncensus

commoncensus.blogs.nuwireinvestor.com/2008/04/recession-forces-teens-to-curb-spending.html

Daily Finance

dailyfinance.com/2011/05/31/recession-sobers-americas-once-free-spending-teens/