[dropcap]S[/dropcap]enseless. That is the word senior Abby Blitz uses to describe how teens spend their money. Whether they are freshmen or seniors, finances aren’t necessarily a priority.
“When I was 14 and 15, I didn’t really think about spending money because I still relied on my parents,” Blitz said. “When I started working and relying on myself, I realized how major it is to save for things and to budget your money carefully.”
Although being a teenager is different than being an adult with new responsibilities, having savings is important in just about any situation. Teenagers may think it’s not a major priority to learn how to budget their money, but it actually is a great time to start preparing for the future.The 2014 Teens and Personal Finance Survey from Junior Achievement and Allstate Insurance showed that 77 percent of teen boys and 63 percent of teen girls aged 16 to 18 are not keeping track of where their money goes on a regular basis.
[quote]“It’s always important to budget your money any time with or without a job no matter what age,” freshman Alice Hert said. “Portion your money and save for the expensive items and long-term goals versus pocket money for everyday use.”[/quote]
Teens who spend their money without putting anything in the bank aren’t helping themselves or their future. Millennials have a savings rate of negative two percent, thanks to factors like high student loan debt and skyrocketing rent prices.
“College is going to be very expensive. You live on your own, and it’s a lot of money to just function and feed yourself,” Blitz said. “It’s important to me that I save a lot of my money for what’s ahead.”
Alex LaBrunerie is a financial advisor and principal of LaBrunerie Financial, 601 W Nifong Blvd. He believes the problem nowadays is that many Americans aren’t saving their money in the manner they should. Being in a saving crisis, it’s urgent that the younger generation do not fall victim to becoming adults in debt, he said.
According to Student Loan Hero, Americans owe more than $1.4 trillion in student loan debt, spread out among about 44 million borrowers. That’s about $620 billion more than the total U.S. credit card debt. In fact, the average Class of 2015 graduate had $34,942 in student loan debt. Just one year later, that number jumped to $37,172, which is just over a six percent increase in student debt.
“The American consumer that the young generation is now is so conditioned to buy things and to buy things on credit,” LaBrunerie said. “It’s frankly quite destructive to personal wealth to be constantly buying things and borrowing to buy things. It’s a new phenomenon where young people have a lot of debt.”
The New York Times wrote an article saying it’s never too early to start saving for the future. The article said that retirement planning experts say this assumption isn’t entirely accurate — though it is true that most young adults don’t make retirement savings a financial priority. But, as the experts point out, millennials are in an ideal position to get started because whatever they set aside will grow interest greatly over time. If someone waits to start saving until the age of 45, he or she will need to set aside three times as much each month to retire comfortably as opposed to someone who started at age 25.
“Save for rainy days, a car, college … or for when you need the money,” LaBrunerie said. “So many adults stress over their finances. If you start saving now, you will live a much happier life.”
How do you save your money? Let us know in the comments below.