Study says teens lack $$$ smarts

Give a teenager some money, he or she spends it all. A short time later, ask where the money went and the teen can’t remember.

Sound familiar? In a nation where teens spend billions of dollars, it’s a common problem for any parent.

“Nearly half of the 1,000 teens surveyed say they are unsure about how to invest effectively their money, and nearly a quarter of the teens said they do not budget their money,” according to the recent Junior Achievement/Allstate survey.

“Many of these kids just walk around in a financial cloud, without any idea how to manage money,” says Anthony Ogorek, a financial adviser. Yet the danger is teenagers who know and learn nothing about money could end up as adults perpetually in debt or perhaps filing for bankruptcy.

“Personal financial education must begin as early as possible. It should start in elementary school, not with one general course in high school,” adds Ogorek, who raised several children to be independent, starting them with IRAs in their teens.

Unfortunately, many teenagers already have a huge deficiency when it comes to financial matters.

Why? One reason is dependency on mommy and daddy.

The majority of respondents said that their parents “take care of all of my expenses,” according to the survey. And yet 74 percent of these same respondents think they should have a credit card by age 21.

Nevertheless, young people today have an enormous impact on the economy. Indeed, according to HarrisInteractive’s Youth Pulse, the purchasing power of 8-24 year-olds is $220 billion annually.

“Teenagers need to learn how to handle money by accounting for it,” according to Jim Collas, president and CEO of BillMyParents. The company, which specializes in helping teens develop money skills, has started a debit card with MasterCard that he says provides accountability.

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Studies show many American teenagers lack understanding of finance.

How to help your teen become a$tute:

* Only give an allowance, nothing extra
* Create an allowance budget
* Make your teen’s spending accountable