You don’t have to be a self-sufficient adult to cast a wary eye on the economy. Nearly a third of teens have economic concerns, which may explain why teen spending is at an eight-year low, a new survey shows.
Investment bank Piper Jaffray Companies looked at the spending habits of 9,500 teenagers across the country. The average age of respondents was 15.8 years. The research was conducted as part of Piper Jaffray’s semi-annual Taking Stock With Teens survey, which measures teen spending and brand preferences over time.
The results suggest that some teens are paying close attention to money matters, as 32% said they believe the economy is getting worse, up from 25% who believed that in the fall of 2018. Concerns about the economy may also be leading some teens to be a little tighter with their wallets, as self-reported teen spending fell 10% from spring 2019 to reach the lowest level since fall 2011.
Some of the cutbacks appear to be in fashion and beauty. Teen spending on cosmetics dropped 21% from a year ago, the survey found. Spending on handbags also registered a decline. Female teen respondents reported spending an average of $90 per year on handbags, which was a survey low. In comparison, teen spending on handbags was $197 per year at its peak in spring 2006.
Despite the decrease in spending on accessories, female teens still value their sense of fashion, as clothing is what they spend 27% of their money on — the largest part of their budgets.
What male teens appear to value most is food. Male teens spent, on average, 23% of their budgets on food, their largest spending category. The No. 1 restaurant teens spent their dollars in was Chick-fil-A.
Teens also held steady in video game spending as gaming products made up 9% of teen spending this year, up slightly from 8% last year.
When it comes to where teens prefer to shop, Amazon continued to lead the market with 52% of respondents naming it their favorite e-commerce site up from 50% in the spring.
However, one area where online shopping did not dominate is in the beauty market. An overwhelming 91% of female teens said they would rather shop for beauty products in brick-and-mortar stores rather than shopping online. The top retailer for beauty products, according to the survey, was Ulta Beauty, which beat out Sephora as the go-to brand for the second year in a row.
Not only are teenagers a viable economic force, but the teenage years can be an ideal time for young people to learn how to handle money. Since teens typically don’t have major financial responsibilities such as rent or a mortgage, they can learn to prioritize their spending and make money mistakes without major consequences. Parents may also want to consider investigating credit cards for teens to help their children learn how to manage credit and begin to build a credit history. There are also certain checking accounts that might be best suited for teens.