MONEY FINDINGS • The average teen spends about $5,408 per year ($104 per week). In 2001 teens ages 12-19 spent more than $172 billion dollars. Do you think the average of $103 per week too high or too low? On average, how much money do you spend a week? Do you think this is a reasonable amount of money to spend in a week? Explain. • 21% of teens have their own credit cards or have access to their parents’ credit cards. Why do you think you should or shouldn’t have a credit card? If you have a credit card, who do you think should be responsible for the bill? Should you charge something on a credit card if it can’t be paid off that month and you have to carry a balance? • 16% of teens have an ATM card. If you have a checking account, who should be responsible for overdraft fees? Why? • By the time they graduate, nearly two-thirds of students at four-year colleges and universities have student loan debt (66.4% in 2004). Although money is an important consideration when making your choices for a higher education, what other factors should you also consider when making your decision? • Although teens and young adults ages 13-24 save approximately 25% of their money, they usually are saving for a specific purchase and not for the future. This is different from adults’ definition of saving. List three things you would like to save for in your future. What are the benefits of starting to save as a teen? • Young adults ages 20-24 represent the fastest-growing segment of bankruptcy filings. Should young adults be allowed to file for bankruptcy, or should they have to work to pay off all the debt they have accumulated? Explain. • If you open a savings account with $10 and add $10 a month, in ten years you will have earned $203 free money (at 3% interest), or $367 in free money (at 5% interest). And…did you know that if you put $1,000 in the bank and never add one penny to it, in ten years it will be worth $1,223 if it earns 2% and $1,500 if it earns 4% interest? That’s a lot of free money! • Would you like to know a way to double your money? The Rule of 72 is an easy way to approximate how long it will take your savings to double. Just divide 72 by the interest rate you earn to determine the number of years it will take your money to double. Or think about two numbers that when you multiply them together equal 72. For example, 3 x 24 = 72. So if you earn 3% interest, it will take 24 years for your money to double. If you earn 24% interest, it will only take 3 years for your money to LESSON 1 | WHY DOES MONEY MATTER? | 7 COPYRIGHT © 2011 BY THE DIBBLE INSTITUTE