Will your teen be financially dependent in their 20s?
Most teens believe they will be financially dependent on parents after graduation.
With the economy slow to recover from the Great Recession and few jobs available, many teens believe they will be financially dependent on their parents until their mid- to late-20s.
According to the Junior Achievement USA and The Allstate Foundation’s 2013 Teens and Personal Finance Poll, 25 percent of teens said they would be 25 to 27 before becoming financially independent, up from 12 percent in 2011.
“It is interesting to see this shift in teens thinking they will remain financially dependent on parents, while building a better future for themselves,” said Rick Franke, Junior Achievement of Southeast Texas president.
“From our findings, we can infer that teens expect to live with their parents longer because 27 percent are unsure about their ability to budget and 48 percent express similar feelings about the use of credit cards,” he added.
To help accelerate their financial independence, young adults may want to consider the following tips:
- Learn self control: According to Investopedia, one of the most important aspects of being financially independent is to learn self control. Oftentimes, young people find themselves in some sort of financial jam, such as credit card debt or inadequate savings. Being able to have self control is essential, as it allows people to avoid overspending and getting into trouble.
- Create a budget: Secondly, young adults should create a budget so they know exactly where their money is going. This could potentially allow them to find areas they can cut back to have more money to put toward important expenses, such as student loan debt.
- Establish an emergency fund: One of the most common ways people see their finances derailed is due to an unexpected expense, such as a trip to the emergency room or a car accident. To help avoid these situations, young adults should consider creating an emergency fund to serve as a safety net from surprise costs.
- Understand taxes: When offered a full-time job, young adults need to make sure they have a full understanding of how income taxes work. This can allow them to know how much money they will receive each year based on the salary they are offered. There are many online calculators that can help young adults find this information.
Being financially responsible as a young adult is essential for people who don’t want to be dependent on their parents.