Has the recent financial market activity forced you to scale back your expenditures? Are you less generous with your children? Do you worry that you have spoiled your children and/or spouse and they are in no way, prepared to live on a budget?
The Frugal Teenager, Ready or Not
By JAN HOFFMAN
WHEN Wendy Postles two children were younger, saying yes gave her great joy. Yes to all those toys. The music lessons. The blowout birthday parties.
But as her son and daughter approached adolescence, yes turned into a weary default. Sometimes it was just easier to say, O.K., whatever, than to have the battle of no, said Mrs. Postle, a working mother who lives in Hilliard, Ohio, a middle-class suburb of Columbus.
This year her husbands 401(k) savings are evaporating. Medical bills are nipping at the couples heels. Gas prices are still taking a toll. Mrs. Postle recently decided that although she and her husband had always sacrificed their own luxuries for Zach, 13, and Kaitlyn, 15, the teenagers would now have to cut back as well.
No could no longer be the starting gun of family fights. It would have to be an absolute.
I tried to tell Kaitlyn, Well get the Hollister jeans at a thrift store, Mrs. Postle recalled. She got angry and said: Thats gross! Other people wore them!
Indulged. Entitled. Those labels have become hot-glued to middle-class and affluent teenagers born after the last major economic downturn, in the late 1980s. They were raised in comparatively flush times by parents who believed that keeping children happy, stimulated and successful, no matter the cost, was an unassailable virtue. A 2007 study by the Harrison Group, a market research firm in Waterbury, Conn., found that nearly 75 percent of parents caved in to their childrens nagging for new video games, half within two weeks.
But as the economy totters, many families have no choice but to cut back, which may lead to a shift in their thinking about money and permissiveness. Last week a semiannual survey of 7,000 15- to 18-year-olds by Piper Jaffray, an investment bank and research firm, showed that annual discretionary spending by teenagers, whose money comes from allowance, gifts and part-time jobs, had dropped 27 percent to $2,600, from its spring 2006 peak of $3,560.
Parents are suddenly saying no and their kids are saying, What do you mean? said Robert D. Manning, an economist at the Rochester Institute of Technology and author of Credit Card Nation.
Family therapists, teachers and parents tell anecdotes about teenagers who are badly rattled by the news, in denial, or both. A daughter is shaken as her mother calls for an emergency family meeting. The son of a Wall Street financier whose fortune has collapsed tauntingly tells his father he can take care of himself: he will sell more marijuana.
It is an unbelievable shock to affluent families that their lifestyles are gone for good, Dr. Manning said, and their children are ill prepared for it.
Mrs. Postles teenagers asked whether the family was poor. Mrs. Postle, who teaches economics at the Columbus chapter of Junior Achievement and whose husband manages heating and cooling commercial installations, felt insulted.
The family was not poverty-stricken, she responded, but staying solvent was costly. Although many parents consider finances the province of grown-ups, Mrs. Postle decided her children were too insulated. She showed them the monthly bills.
The teenagers were stunned. When her son saw the mortgage bill he thought it was an annual payment.
American teenagers, many of whom have weak quantitative skills, are generally naïve about finance. In a 2007 study for Charles Schwab, the financial services company, 62 percent of teenagers believed they were prepared to deal with the financial world after high school. That boast was undercut when they were probed about topics like check-writing and paying bills.
One recent morning, students in an economics seminar at Elisabeth Irwin High School, a private school in Manhattan, displayed an emerging grasp of the financial meltdown. But when discussing their personal finances, many just seemed bewildered.
National surveys put older teenagers average monthly allowance at $100 and upward. At Elisabeth Irwin, the weekly allowances ranged from $20 to $150. Some parents gave students strict allocation instructions; others, only vague direction.
And while many had debit and credit cards, some were hard pressed to explain the difference. I dont understand why I got charged for an overdraft, one junior said. One girl admitted to having once run up $5,000 on her credit card. Lesson learned! Now she rarely uses the card. I make my mom buy it! she said.
To earn spending money, some students were required to do minimal chores, others to maintain minimal civility.
Regardless of family means, most did not have after-school jobs. Ive never had a job, said Nazir Khan, 16, a first-generation American whose father is a cook and whose mother is an occasional caregiver. My parents want me to focus on schoolwork.
They all felt the pressure and the desire to acquire: their knowledge of brands and prices was encyclopedic. The stuff it takes for them to be perceived as middle class is extraordinary, said Tom Murphy, who teaches the high schools Economics and Society seminar. Laptops, Xboxes, iPods, phones and its nonnegotiable.
The messages about money from their families struck some as contradictory. Joe Sharp, 16, said his parents had given him whatever he wanted. But his grandmother would talk about World War II and rationing. Id say, Its not the war, were fine, he said. But she taught me that saving is definitely important.
After class, one girl said: We are so being bribed. Im bad at math but if I get an A, my father will give me a designer bag.
And yet, she added shyly: I love the gifts but Id really like to spend time with him. But my parents are working harder than ever and theyre so worried. I dont want to force him to spend time with me. I can be a real earache.
Discernable in their anecdotes were the abrupt, flailing efforts of parents to rein in their teenagers, as difficult economic times bear down.
One girl said: My dad will buy three new shirts but then hell tell me to cut down on my spending. So I dont know what to think.
A junior recounted a fight with her father. She had shouted: I can afford the things I buy because I dont have to pay expenses or rent. He had retorted: Now youre going to: $25 a night and $15 for your friends who stay over! (Threat rescinded.)
Some students were beginning to translate the economic crisis personally. A few thought it had become unseemly to flaunt goods with designer labels. Ruth Jurgensen, the principal of the diverse school, noted that many students were alarmed about dwindling college aid.
Even their fear frightens them. Chappell Laird, 16, knows that her father, a restaurant owner, and mother, a photographers agent, are affected by the economic downturn. But she doesnt seek further information. It scares me to know more, she said. It makes me nervous.
The Frugal Teenager, Ready or Not
By JAN HOFFMAN
WHEN Wendy Postles two children were younger, saying yes gave her great joy. Yes to all those toys. The music lessons. The blowout birthday parties.
But as her son and daughter approached adolescence, yes turned into a weary default. Sometimes it was just easier to say, O.K., whatever, than to have the battle of no, said Mrs. Postle, a working mother who lives in Hilliard, Ohio, a middle-class suburb of Columbus.
This year her husbands 401(k) savings are evaporating. Medical bills are nipping at the couples heels. Gas prices are still taking a toll. Mrs. Postle recently decided that although she and her husband had always sacrificed their own luxuries for Zach, 13, and Kaitlyn, 15, the teenagers would now have to cut back as well.
No could no longer be the starting gun of family fights. It would have to be an absolute.
I tried to tell Kaitlyn, Well get the Hollister jeans at a thrift store, Mrs. Postle recalled. She got angry and said: Thats gross! Other people wore them!
Indulged. Entitled. Those labels have become hot-glued to middle-class and affluent teenagers born after the last major economic downturn, in the late 1980s. They were raised in comparatively flush times by parents who believed that keeping children happy, stimulated and successful, no matter the cost, was an unassailable virtue. A 2007 study by the Harrison Group, a market research firm in Waterbury, Conn., found that nearly 75 percent of parents caved in to their childrens nagging for new video games, half within two weeks.
But as the economy totters, many families have no choice but to cut back, which may lead to a shift in their thinking about money and permissiveness. Last week a semiannual survey of 7,000 15- to 18-year-olds by Piper Jaffray, an investment bank and research firm, showed that annual discretionary spending by teenagers, whose money comes from allowance, gifts and part-time jobs, had dropped 27 percent to $2,600, from its spring 2006 peak of $3,560.
Parents are suddenly saying no and their kids are saying, What do you mean? said Robert D. Manning, an economist at the Rochester Institute of Technology and author of Credit Card Nation.
Family therapists, teachers and parents tell anecdotes about teenagers who are badly rattled by the news, in denial, or both. A daughter is shaken as her mother calls for an emergency family meeting. The son of a Wall Street financier whose fortune has collapsed tauntingly tells his father he can take care of himself: he will sell more marijuana.
It is an unbelievable shock to affluent families that their lifestyles are gone for good, Dr. Manning said, and their children are ill prepared for it.
Mrs. Postles teenagers asked whether the family was poor. Mrs. Postle, who teaches economics at the Columbus chapter of Junior Achievement and whose husband manages heating and cooling commercial installations, felt insulted.
The family was not poverty-stricken, she responded, but staying solvent was costly. Although many parents consider finances the province of grown-ups, Mrs. Postle decided her children were too insulated. She showed them the monthly bills.
The teenagers were stunned. When her son saw the mortgage bill he thought it was an annual payment.
American teenagers, many of whom have weak quantitative skills, are generally naïve about finance. In a 2007 study for Charles Schwab, the financial services company, 62 percent of teenagers believed they were prepared to deal with the financial world after high school. That boast was undercut when they were probed about topics like check-writing and paying bills.
One recent morning, students in an economics seminar at Elisabeth Irwin High School, a private school in Manhattan, displayed an emerging grasp of the financial meltdown. But when discussing their personal finances, many just seemed bewildered.
National surveys put older teenagers average monthly allowance at $100 and upward. At Elisabeth Irwin, the weekly allowances ranged from $20 to $150. Some parents gave students strict allocation instructions; others, only vague direction.
And while many had debit and credit cards, some were hard pressed to explain the difference. I dont understand why I got charged for an overdraft, one junior said. One girl admitted to having once run up $5,000 on her credit card. Lesson learned! Now she rarely uses the card. I make my mom buy it! she said.
To earn spending money, some students were required to do minimal chores, others to maintain minimal civility.
Regardless of family means, most did not have after-school jobs. Ive never had a job, said Nazir Khan, 16, a first-generation American whose father is a cook and whose mother is an occasional caregiver. My parents want me to focus on schoolwork.
They all felt the pressure and the desire to acquire: their knowledge of brands and prices was encyclopedic. The stuff it takes for them to be perceived as middle class is extraordinary, said Tom Murphy, who teaches the high schools Economics and Society seminar. Laptops, Xboxes, iPods, phones and its nonnegotiable.
The messages about money from their families struck some as contradictory. Joe Sharp, 16, said his parents had given him whatever he wanted. But his grandmother would talk about World War II and rationing. Id say, Its not the war, were fine, he said. But she taught me that saving is definitely important.
After class, one girl said: We are so being bribed. Im bad at math but if I get an A, my father will give me a designer bag.
And yet, she added shyly: I love the gifts but Id really like to spend time with him. But my parents are working harder than ever and theyre so worried. I dont want to force him to spend time with me. I can be a real earache.
Discernable in their anecdotes were the abrupt, flailing efforts of parents to rein in their teenagers, as difficult economic times bear down.
One girl said: My dad will buy three new shirts but then hell tell me to cut down on my spending. So I dont know what to think.
A junior recounted a fight with her father. She had shouted: I can afford the things I buy because I dont have to pay expenses or rent. He had retorted: Now youre going to: $25 a night and $15 for your friends who stay over! (Threat rescinded.)
Some students were beginning to translate the economic crisis personally. A few thought it had become unseemly to flaunt goods with designer labels. Ruth Jurgensen, the principal of the diverse school, noted that many students were alarmed about dwindling college aid.
Even their fear frightens them. Chappell Laird, 16, knows that her father, a restaurant owner, and mother, a photographers agent, are affected by the economic downturn. But she doesnt seek further information. It scares me to know more, she said. It makes me nervous.
*SNIP*
