Teen Money Expectations Vs. Reality
Karyn Hodgens, MA; Kidnexions Co-Founder
One of the many things I love about kids is their optimism. As parents, we don't want to crush that spirit! Then again, somehow we need to gently let our kids know that while a human tele-porter, for instance, isn't something we can help them build, maybe a pulley system from one side of the room to the other, is. It's about guiding their enthusiasm in a realistic direction.
Consider a recent Schwab 2011 Teens and Money Survey. A full 81 percent of teens aged 16 - 18 plan to choose a career either because they're passionate about the work or they feel it will help them do good for others. And that's great because we want our children to grow up and be happy in their professional lives. Besides, a happy workforce is a productive workforce!
But when it comes to the starting salary expectations of these teens, they're a little out of whack with reality. These teens expect to begin their careers earning $73,000. This is interesting because these same teens believe their current family income to be $70,000. If we do the math, we see that their optimism puts them $3,000 ahead of what their parents are currently bringing in.
It would be interesting to ask them what they think the median annual household income is. Would they be surprised to find out that it's $49,909? What makes them think that they can start off $23,000 higher than the median?
It's not about deflating their dreams. Rather, it's important that we encourage our kids to do and be what they want while setting reasonable expectations.
How do we do this? We talk to them about what they want to be when they grow up. And if they're not sure, begin with their interests. From there, we can help them figure out the financial outcome of following their bliss. Search engines are an easy way to find out starting salaries of different professions. If they end up with sticker shock, reassure them that their dreams are not out of reach—they're just going to require a bit more up-front planning. Tell them that by creating a budget and setting up an automatic savings plan, they'll become more savvy with their money, which will help them get more of the things they want in life. So it's not the career they choose; it's the money choices they make.
Enthusiasm can go a long way. But at the end of the day, without a solid financial plan and some realistic expectations, enthusiasm doesn't pay the bills.
Photo courtesy of Flickr Creative Commons
- Written by Super User
- Category: Uncategorised
- Published: 23 November 2011