A Child Left Behind in Teachings of Finance

In the book of Proverbs we are told: "Train up a child in the way he should go: and when he is old, he will not depart from it."

According to one survey, today's teens expect to make big bucks when they reach adulthood. But what they know about personal finance won't help them live off what they most likely will earn. That disconnect is part of the reason why there are so many adults in credit card trouble or struggling to manage mortgages on homes they can't afford.

American teens believe, based on the career that interests them the most, that when they get older they will be earning an average annual salary of $145,500. Interestingly, boys expect to earn an average $173,000 a year and girls $114,200, according to the findings of Teens & Money, an annual survey released last month by Charles Schwab & Co. and the Boys & Girls Clubs of America.

The fact is, only about 14 percent of U.S. households have incomes between $100,000 and $200,000, reports the U.S. Census Bureau. The median household income in the United States is actually $46,326, according to the latest Census figures.

Teens were more likely to have a cell phone than a savings account. Although 88 percent of them said they don't like the way it feels to owe someone money, almost a third (29 percent) have incurred debt (close to $300, on average). The survey found more than half (51 percent) believe "it is easier to buy things with a credit card than cash" and, given the choice, more than a quarter (29 percent) would actually prefer using a credit card, a 61 percent increase over the percentage of teens who said this in last year's poll.

The surveyed teens say they aren't being taught basic money management by the people who have the most influence over them -- their parents. Only one in four said their parents or guardians are training them about money by giving them a lot of experience budgeting, spending and saving it.
Your children will have a better chance to live within their means as adults if you spend time while they're young showing them how to handle money.
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