Capital One's Annual Back To School Survey Finds Teens Eager To Learn about Money, But Parents Continue To Overlook Important Learning Opportunities; Back to school shopping provides parents with chance to teach practical money skills
MCLEAN, Va.--(BUSINESS WIRE)--July 17, 2006--Capital One Financial's (NYSE:COF) sixth annual back to school shopping survey shows that parents continue to miss the mark when it comes to talking to their kids about the basics of money management. This year's survey of 1,000 parents and teens finds that teens are eager to learn about managing their money wisely but aren't getting the basics at school - only 14 percent of them have taken a class on the topic - and many said they would prefer to learn about money from their parents. At the same time, 79 percent of parents see themselves as positive money role models for their kids, yet only a small percentage are taking advantage of day-to-day learning opportunities to arm their teens with practical money skills.
- Forty-nine percent of teens are eager to learn more about money management - 35 percent would like to learn from their parents. When asked about the topics they'd most like to learn about, teens express interest in checking accounts, budgeting, investing, saving, and financing for large purchases.
- Only 18 percent of parents are discussing back to school budgeting - a decline from the 24 percent who did so last year.
- Only 43 percent of parents have discussed the importance of needs versus wants, compared to 64 percent who did so last year; and a surprising 42 percent of parents have not taken any steps whatsoever to discuss financial basics.
"The findings of this survey tell us that teens want to learn about money from their parents and that they are willing to listen to them," says Diana Don, Director of Financial Education at Capital One. "As important a topic as it is, basic money management unfortunately is not always a subject that's being discussed in school, so it's important for parents to take the lead and use opportunities like back to school shopping to work with their teens and help them sharpen their financial skills."
Capital One's survey also found some surprising facts about back to school shopping lists and spending levels.
What are they buying?
While traditional school supplies such as notebooks, backpacks, pens and pencils, and clothes top back-to-school shopping lists this fall for parents and teens, purchasing for electronic items has increased slightly. Ten percent of parents and teens expect to purchase hand-held electronics such as PDAs or iPods, compared to just four percent who planned to purchase the items last year. Parents and teens differ slightly on computer spending - six percent of parents expect to shop for a new a computer this year, while eight percent of kids hope to do so.
Are parents going with their teens to shop? How much are they spending?
Eighty-seven percent of teens expect their parents to join them on back to school shopping trips. This year, 53 percent of parents expect to spend more than $125 on back to school essentials for their kids, while 26 percent plan to spend less than $100. Overall, the majority of parents (74 percent) are spending the same amount as last year; however, 20 percent plan to spend more. Most plan to pay with cash (75 percent) and credit (26 percent).
Are teens contributing to the bill?
When it comes to sharing the cost of back to school shopping, 53 percent of teens plan to contribute to the bill, with almost 60 percent responding that the money will come from job earnings. Teens say the remainder will come from an allowance or savings (31 percent) or a cash gift (17 percent).
Who's ahead of the financial curve - teen girls or boys?
Teen girls are more likely to contribute to back to school shopping - 58 percent of girls will contribute to the bill versus only 49 percent of teen boys. Survey findings also indicate that teen girls tend to think ahead - 77 percent of teen girls are eager to learn about financing for large purchases such as a car or home, compared to 63 percent of boys.
Financial education: What parents and teens can do to shop smart
"When it comes to educating kids about finance, the most important thing parents can do is get involved," added Don. "There is a variety of free, online information parents can use to get started."
Capital One also offers parents these tips for working with their child to develop good money management skills:
- Make back to school shopping a family affair: It's a great opportunity for kids to learn valuable hands-on lessons from their parents.
- Do your homework: Talk to teachers in advance and try to get a list of required school supplies so you can buy in advance (maybe even on sale).
- Crunch numbers together - establish a budget: Determine how much you're able to spend in advance and stick to the amount.
- Make a list: Prepare your shopping list in advance. Try to distinguish between "needs" and "wants" on the list and prioritize the needs first!
- Shop smart: Make sure you shop around for the best price and the best quality. You want purchases to last.
- Get more tips (if you need them): Capital One offers a number of resources on budgeting and savings and has partnered with the national consumer organization Consumer Action to create a complete guide for parents called Talking to Teens about Money, available at www.money-wise.org.
For additional help, parents and students can visit the Jump$tart Coalition for Personal Financial Literacy home page at www.jumpstart.org and search the "clearinghouse" for financial curriculum and education materials.
For the Capital One Study, Braun Research was engaged to conduct 1000 interviews in 880 households with 500 parents of teenagers aged 13 to 17 and 500 teenagers aged 13 to 17 across the United States. Surveys were conducted by telephone from June 28th - June 29th, 2006. The margin of error for the interview is plus or minus 3.33 percentage points. Interviews were monitored at random. Sampling for this study was conducted across the United States using a national probability sample of all exchanges and area codes of households with someone between the ages of 13 and 17 living there. All interviews were conducted using a computer assisted telephone interviewing system. Statistical weights were designed from United States Census Bureau statistics.
About Capital One
Headquartered in McLean, Virginia, Capital One Financial Corporation (www.capitalone.com) is a financial holding company, with more than 316 locations in Texas and Louisiana. Its principal subsidiaries, Capital One Bank, Capital One, F.S.B., Capital One Auto Finance, Inc., and Capital One, N.A., offer a broad spectrum of financial products and services to consumers, small businesses and commercial clients. Capital One's subsidiaries collectively had $47.8 billion in deposits and $103.9 billion in managed loans outstanding as of March 31, 2006. Capital One, a Fortune 500 company, trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 500 index.
CONTACT: Capital One Financial Corporation
Diana Don, 703-720-2371
SOURCE: Capital One Financial Corporation