EXPOSURE TO FINANCIAL EDUCATION ON THE RISE,  
MERRILL LYNCH TEEN SURVEY FINDS  

PRINCETON, NJ, April 9Financial education is on the rise among U.S. teens, though the group still lags in their knowledge about credit cards, according to a new survey of teens commissioned by Merrill Lynch. The survey findings are being released today as part of the firm's International Saving MonthSM campaign.

The second annual survey, conducted by International Communications Research this February, asked 500 teens between the ages of 12 and 17 about a variety of financial topics including how they earn, spend, save and learn about money.

While 51% of teens report that they have discussions with their parents about how to spend their money more wisely, the majority of teens (68%) say that they never have discussed responsible credit card use.

The survey found that 56% of the respondents have had a class in school that discussed saving or investing money, compared with 44% in 1998. Consistent with other Merrill Lynch research, teens who either have had a class on saving and investing or who have had a job are more likely to have plans for their savings than those without early financial education or employment, and are also more likely to seek financial advice. Increasingly, these plans focus on saving for college.

"To bridge some of the gaps in teen education about credit cards and other financial issues, Merrill Lynch is broadening its educational materials this year," said Allen N. Jones, Senior Vice President and Director of Marketing, Merrill Lynch Private Client Group. "We've developed a new Educational Pack that focuses on financial concerns for teens such as credit management, budgeting, college financing and buying a first car. We also have developed a special "Money Matters" edition of Brain Quest, a Young Entrepreneur Kit for Teens, and a special "InTime" college planning guide in collaboration with Time School Publishing."

While teens report more exposure to financial education, their saving habits have not improved as a result. Twenty-six percent of teens said they saved most of the money they receive versus 28% in 1998; 56% saved about half, versus 60% in 1998; and 18% spent it immediately versus 12% in 1998.

Nearly one-third (31%) of teens say that they have sought advice on how or where to best save or invest their money, with 87% of those respondents consulting parents or relatives. Among other findings (versus 1998 survey results):

How Teens Obtain Money:

  • 86% (84%) are given money from parents when needed

  • 77% (72%) occasionally earn money doing odd jobs

  • 40% (41%) receive an allowance

  • 24% (22%) have a full or part-time job

 

Teens Who Have a Job:

  • 28% (22%) work in a restaurant/food service

  • 35% (12%) work manual labor jobs (agriculture, building)

  • 8% (8%) are a cashier/clerk

  • 7% (6%) have a newspaper route

  • 12% (5%) do office work

  • 3% (4%) work in retail (e.g. department store)

 

How Teens Save:

  •       64% (72%) use a piggy bank or container

  • 70% (65%) have a savings account

  • 25% (16%) have a checking account

  • 11% (9%) invest in mutual funds

  • 11% (7%) invest in stocks

 

Teens' Plan for Money Being Saved:

  • 46% (36%) are saving to pay for college

  • 36% (33%) are saving to buy a car

  • 15% (21%) are saving to purchase a specific item

  •  8% (10%) are saving to buy clothes

  •       16% have no specific plan for their savings