Today's teens are falling behind in personal finance education but have a desire to catch up.
A new survey from Mintel shows nearly 80 percent consider themselves knowledgeable about financial matters. But the Federal Reserve's 2008 test of high school seniors resulted in an average financial literacy score of 48 percent — a drop of four percentage points from 2006's average.
Mintel's latest survey also revealed that many teens want to learn more about managing money. Four in five say they would like to learn more about investing. Moreover, approximately half express favorable attitudes towards saving and say they are careful about spending.
"Contrary to many peoples' belief that teenagers only want to spend money, our research found most teens are ready, willing and eager to learn more about managing their finances," said Susan Menke, senior finance analyst at Mintel. "Schools and financial services companies alike should take advantage of this opportunity to equip teens with the financial skills they'll need for future success. Improved financial literacy is something the entire nation could benefit from."
Currently, most teens say they learn about money from their parents. In Mintel's recent survey, an encouraging two-thirds say one way they learned about finances was school lessons. But disturbingly, 51 percent say they've acquired their financial skills through trial and error.
"Teenagers are rapidly initiated into the adult financial world," According to Menke. "Their use of bank accounts, debit cards and credit cards increases very quickly over a short period of time, creating opportunities for financial education as well as relationship-building. Both schools and financial services companies can benefit by offering tips, training and age-appropriate financial products for teens."
Mintel Comperemedia, which monitors direct mail, email and print advertising, has observed some financial products and services targeted at teens and their parents. On the whole, credit unions are more active than banks in targeting teens.
A search of Mintel's database for campaigns referencing the teen market from January to October 2008 brought up 51 results, two-thirds of which came from credit unions.
Prepaid cards such as the Visa Buxx or MasterCard Myplash are another hot item to market to teens, Mintel found. These cards work like credit cards but only contain a fixed value, allowing parents to monitor spending.
"Prepaid cards give teens a chance to learn financial responsibility without risk of debt or excess fees," comments Menke. "They are particularly well-suited for the teen market."