Do Teens Know More About Money Than Their Parents?

Growing up, Josh Seides often helped his parents with their computer problems. He then realized he could help other adults with their technology challenges, too. That gave him the idea to launch a nonprofit, Technocademy, which offers free seminars to local seniors who want to become more proficient on their smartphones, tablets and computers. Today Seides, a 16-year-old high school junior in Atlanta, says he wants to study economics and pursue entrepreneurship.

Like other teens, Seides grew up against the background of the Great Recession, and it seems to have had a major influence on his interests and goals. "I've read articles about the recession, and it peaked my interest in the economy," he says, adding that he was too young to really feel like he was experiencing the downturn firsthand.

A couple recent surveys that focus on teens, most of whom are still living at home with their parents, suggest that this young generation is more aware of the importance of saving, investing and entrepreneurship than prior generations at their age, perhaps because of the recession and popular TV programs like "Shark Tank" -- one of Seides' favorites.

A 2014 TD Ameritrade survey of just over 1,000 members of Gen Z, who range in age from 14 to 24, found that 57 percent said saving money is "very important" to them, up from 50 percent in last year's survey. When asked what they would do with a $500 gift, 9 in 10 said they would save at least a portion of it. Gen Z also started working at a younger age (17) than Gen Y (18) on average.

Another recent survey of 1,000 teens between ages 13 and 17 from Better Homes and Gardens Real Estate found that they were prepared to make big sacrifices to achieve their future goal of homeownership, and they have a surprisingly realistic grasp of the cost of their future homes. The majority of respondents said they dream of owning a home one day, and over half said they would even give up social media for a year or do twice as much homework every night in order to make that happen. The teens said they want to own their first home by their 28th birthdays, three years earlier than the median age of first-time homebuyers.

That suggests a return to traditionalism and an old-fashioned embrace of the American Dream, says Sherry Chris, president and CEO of Better Homes and Gardens Real Estate. "They saw their parents go through a recession and, in some cases, lose their home. We think they're getting their values from their parents, and homeownership is very important to that demographic. There's stability around owning a home," she says.

When asked to estimate the cost of their future home, the teens put the price at $274,323, which is just about $1,000 more than the median price of a home in the United States today. Chris attributes that accuracy to the easy access teens have to reality real estate shows, listings and articles in the mainstream media.

The teens also exhibited confidence in their personal finance skills: Just over half said they thought they knew more about saving money than their parents at the same age. The reason? Because they talk about money, and especially saving, so much with their parents. About 4 in 10 also cited the fact that they studied the recent recession in school.

The TD Ameritrade survey also highlighted the role of parents in passing on the recession's lessons to their teenage children. According to TD Ameritrade, 84 percent of Gen Z's parents have talked about saving and investing with their children by the time they turned 15 years old. In fact, 14 years old was the average age that parents had a discussion about saving and investing with their teen. "Kids are really listening to their parents when it comes to cultivating how they approach and feel about money," says Nicole Sherrod, managing director at TD Ameritrade. "I question whether or not parents realize how much their kids turn to them when it comes to guidance on money."

Still, there were some concerning findings, too. 38 percent of Gen Z respondents said they've taken a personal finance class, and 28 percent said they don't believe the stock market is a good place for their long-term investments. That resistance to investing could hurt them in the long run, Sherrod says.

"They seem very risk averse. That makes me concerned for their future," Sherrod says, adding that some of their concern about the market is justified. For a Gen Z member born in 1990, he or she would have witnessed, or at least been vaguely aware of, a major market correction at age 9. By age 17, when they would have been more aware of the news, there was another major market correction. "When you're 17, you really get what's going on. You know when the budget is tightening and when your parents are struggling with money. Parents are vocal when things have to tighten up, and that talk helps form the way kids think about money," Sherrod says.

The teen respondents also had a surprising amount of credit card debt, with an average of $749, up from $485 in last year's survey. "What concerns me is that young people are saddled with more debt," Sherrod says.

In Atlanta, Seides says his experience with his nonprofit has taught him a lot about how to run a business, lessons he's eager to apply to his future life as a budding entrepreneur. In the meantime, he's practicing the frugal habits he's picked up and urges other teens to do the same. "Spend your money on things you'll enjoy for a long time and not just temporary things. Save money, too," he says. Words for people of any generation to live by.