Today’s Money Environment IS Different

Main Messageby: Chuck Kuster

Your children’s money management environment is different today – and changing rapidly. Parents can be more effective by recognizing key differences.

“Things are different!” is a phrase all parents hear, usually while trying to dispense a bit of wisdom to a close-minded child. But as it relates to the financial realm, your children may have reason to object.

Things really are different today. For example:

Services and products – The financial services industry offers an alphabet soup of confusing options. Abbreviations include: ATM, IRA, 401(k), 529, SEP, PIN, FICA, TSA, NAV, CFP and ETF, to name a few. This makes everything seem more complicated and can be a boring turn-off for kids and adults alike.

Technology – Your kids will seldom visit a bank so hauling them down to see the vault won’t be too pertinent. New technologies like on-line banking and mobile banking apps all change how people manage, move and spend money. Parents who embrace these technologies will likely get better reception.

Relationships with financial advisors – Older folks valued a personal relationship with a banker, insurance broker and investment advisor. Our kids tend to shop for such services on-line. It’s another mindset difference.

Easy credit – Do you remember waiting weeks to get a credit card? Today, someone can get cleared for a credit card while in the checkout line. This makes teaching how to wisely use credit even more important.

Internet sales – Our kids are buying more through internet sites. This includes Amazon as well as Craig’s list resale sites. This trend changes how products are researched and serviced and creates security issues to discuss, such as how to avoid getting robbed during a transaction.

Fraud and scams – Theft of personal identity and financial information is an international issue, especially for younger people who regularly use new technologies.

Cultural pressure to spend – Kids today are under far more cultural pressure to spend. The average amount a teen has to spend is more than $107/week, according to Teenage Research Unlimited.

Attitudes toward saving – While there is enormous pressure to spend, cultural attitudes to save have greatly diminished, too.  Only about 2 out of 10 teens have a savings account, according to research. This means parents have to work even harder on this topic.

Starting out in-debt – The college graduation class of 2013 averaged $35,200 in total debt, according to Fidelity Investments. The common assumption is ALL college students amass such debt, which is not true.

Living the “monthly payment” lifestyle – Many young consumers are okay with a debt load as long as monthly payments are manageable. This means dollars that could go towards saving and investing instead pay debt. This cash-flow mentality can be devastating if a job is lost or unexpected expense arises.

Each of these “differences” are great topics to explore with your children. We will touch on them in greater detail in upcoming posts.

Money MomentA teen or young adult complaining that “things today are different” when it comes to money has invited an in-depth discussion of those differences and what they mean.


About Chuck

Chuck is a publisher of financial education materials, an entrepreneur, and journalist.
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