Survey Finds Teenagers Are Saving for the Future

PRINCETON, NJ, March 30, 1998 - It has long been said that teenagers simply don't understand the value of a dollar, but a new Merrill Lynch survey on teens' saving and spending habits may help dispel this belief. The survey, conducted in February by International Communications Research, found that 28% of teenagers save most of the money they receive, 60% save about half, and 12% spend it immediately. The survey is being released as part of Merrill Lynch's National Saving Month campaign, which begins Wednesday, April 1.

"Our survey indicates that the financial habits of teens have improved over the past five years," said Christine Cooke, Vice President and Manager of Education Services for Merrill Lynch. "As the first financial services firm to educate children on the need to save, we are pleased to see teens demonstrating financial discipline, as this is an indicator of sound saving habits in adulthood."

The survey included 512 teens between the ages of 12 and 17 and explored such topics as how money is earned, spent, saved and discussed. Among the findings, 89% of respondents said they talk to their families about smart ways to save and how to spend their money more wisely. However, only 44% of respondents have had a class in school that discussed saving money or investing.

Consistent with other Merrill Lynch research, teens who either have had a class on saving and investing or who have had a job are more likely to have plans for their savings than those without early education or jobs. On average, teens with jobs (22% of respondents) work 15 hours per week and earn $5.25 per hour, with boys earning slightly more than girls ($5.50 vs. $5.15). Teens who have regular or part-time jobs are more likely to have savings accounts, checking accounts and/or invest in mutual funds than those who do not have jobs. Among other findings:

How Teens Obtain Money:

• 84% are given money from parents when needed
• 72% occasionally earn money doing odd jobs
• 41% receive an allowance
• 22% have a full or part-time job

Teens Who Have a Job:

• 22% work in a restaurant/food service
• 16% do odd jobs (baby-sitting, dog walking, yard work)
• 12% work manual labor jobs (agriculture, building)
• 8% are a cashier/clerk
• 6% have a newspaper route
• 5% do office work
• 4% work in retail (e.g., department store)

How Teens Save:

• 72% use a piggy bank or container
• 65% have a savings account,
• 16% have a checking account
• 9% invest in mutual funds
• 7% invest in stocks

Teens' Plans for Money Being Saved:

• 36% to pay for college
• 33% to buy a car
• 21% to purchase a specific item
• 10% to buy clothes
• 16% have no specific plan

(Note: The phone number for callers interested in ordering Saving and the American Family is 1-800-MERRILL, ext 3840.)