National Consumers League

Personal Finance

NCL Personal Finance Issues

NCL survey: teens and financial education

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The Teens and Financial Education survey was conducted for the National Consumers League by Opinion Research Corporation with support from the Bank of America Foundation. The survey was conducted by telephone among a random sample of 506 teens aged 14-18 between February 14 and 19, 2002 and sought to test teens’ knowledge of financial issues; examine their attitudes toward money, work, and savings; and assess how they plan to deal with credit cards and other loans.

A discussion of the survey results appears below.

NCL focuses on teen education with its LifeSmarts program. Each year through LifeSmarts, NCL holds a national competition that tests teens in grades 9-12 about personal finance, health and safety, the environment, technology, and consumer rights and responsibilities. For more information, visit:, call the National Consumers League’s communications department at 202-835-3323.

Work, money, and saving

Teens are working; 62 percent say they get most of their money from part-time employment, summer jobs, or neighborhood jobs such as babysitting or raking leaves. Over half (55 percent) say they work mainly for spending money. Another 35 percent mainly save the money they make.

Saving money is important to American teens; about nine out of ten save money, though 36 percent admit that they’re saving for specific items they want to purchase. Almost one quarter (22 percent) are saving for college and 27 percent save for no particular reason. Four out of ten say they save half or more of their money, and three out of four have a savings account. Only about one in five teens report having a checking account and small percentages say they have ATM (12 percent) and debit cards (8 percent).

Paying for college

Teens are falsely optimistic about their ability to obtain scholarships and grants to pay for college; 38 percent say that’s the main way they’ll cover the costs. One in four say their parents will carry the burden, 12 percent plan to work through school to pay the costs, and only ten percent believe they’ll mainly use student loans to cover the cost. According to a report by The College Board, loans comprise 58 percent of college aid packages while scholarships and grants only make up 25 percent. Most of NCL’s survey respondents (56 percent) believe their parents will pay for 20-50 percent of their college bill, while 12 percent don’t expect their parents to make any contribution.

Life after college and credit cards

Over one-third (38 percent) of teens believe they will make under $25,000 in their first job out of college. The reality according to the Collegiate Employment Research Institute is that the average college graduate with a bachelor’s degree makes between $29,300 and $34,600. One in five survey respondents think they’ll make more than $36,000 in the first year. Teens are planning to get credit cards; 58 percent say they’ll get their first credit card before they graduate from college.

This interest in credit cards is noteworthy since over half (52 percent) wrongly believe that a credit card is an informal agreement to pay money owed. And where are they learning this? Sixty-three percent say they get most of their information about money, credit, and other financial matters from their parents. But parents might not be the best resource. The average American family carries almost $9,000 in credit card debt. And even if their parents are providing sound advice, over half of the teens admitted that when they do talk to their parents about money it’s to ask for some to spend.

Financial privacy and shopping online

Though thought to be more Internet savvy than their parents, teens have some disturbing misconceptions about shopping online. Sixty-eight percent mistakenly believe it’s safer to pay for goods bought online with a check or money order than by giving a credit card number and 55 percent wrongly think that businesses must go through a screening process to make sure they are legitimate before they can put up a Web site. When asked the same two questions in 2001, adults knew a bit more than the teens, with 41 percent correctly answering the safest way to pay question, and 73 percent knowing that companies are not screened before they put up site. Teen respondents also showed a lack of understanding of important financial privacy issues. A majority (70 percent) wrongly believe that it’s illegal for banks to share personal financial information with affiliated companies.


There is a need in this country for teen financial education. Teens are eager to take on adult obligations such as earning money and managing credit cards, but may lack the financial education to effectively fulfill them. Without a basic financial education from schools, they must rely heavily on their parents for financial information. These teens may face some of the same financial setbacks as their parents: credit card worries, privacy problems, and confusion about banking and shopping online.

Additionally, teens need help to realistically look at college expenses, scholarship chances, and student loans. Their idealistic views of how they’ll pay for school and how much they’ll make when they get out may be a root cause of financial problems later in life.

Finally, financial smarts doesn’t have to be learned from personal mistakes. It is entirely possible to teach teens their rights and responsibilities as consumers without scaring them. Programs like NCL’s LifeSmarts, VISA’s Practical Money Skills, The National Center on Education and the Economy’s Financial Fitness for Life have proven that teen financial education in a fun and friendly format is a possibility. Teen educators along with state and federal agencies should use these programs to build this necessary foundation within the public education system.


This survey was conducted via telephone from February 14-19, 2002 . The poll was conducted among a national sample of 506 teens comprising 253 males and 253 females 14 to 18 years of age, living in private households in the continental United States . Figures were weighted by four variables: age, sex, geographic region, and race, to ensure reliable and accurate representation of the total population, 14-18 years of age.

Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. The possible sample variation that applies to percentage results reported from the sample are +3 if the percentages are at or near 10 percent or 90 percent and +4 if they are at or near 20, 40, 50, 60, and 80 percent. The chances are 95 in 100 that a survey result does not vary, plus or minus, by more than the indicated number of percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.