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The Good News/Bad News Story Of COVID: Our Kids and Money

Jean Chatzky  |  April 6, 2021

Teens and young adults are suffering financially alongside their parents. But at least the pandemic has families talking about money with their kids.

When it comes to facing a period of financial ups-and-downs, parents often do their best to shield their kids from money discussions. During the K-shaped recovery that has defined the COVID pandemic, with some families prospering, others suffering and members of both cohorts more than ready to escape the confines of their walls, a new study from Junior Achievement and Citizens shows just how impossible that’s been.

That’s not necessarily a bad thing. Before COVID, this study of 2,500 American 13- to 19-year-olds (including those still in high school as well as 500 who graduated in 2000), 56% of teens said they’d talked with their parents or guardians about the family finances. Interestingly, half of those said they had spoken on the topic just once.  Since the pandemic took hold, 44% said they were talking about finances more (including 15% who said they were talking significantly more.)

Considering the fact that prior research has shown that teens rely most heavily on their parents for financial advice, these conversations couldn’t come soon enough.  “After the financial crisis of 2008, we saw a doubling of student loan debt and young adults impacted by that situation delaying major life decisions, such as purchasing a home, starting families and planning for the future,” said Jack E. Kosakowski, President and CEO of Junior Achievement USA.

So, what did the study show us about kids and money – and how can we put our best financial foot forward?

College Plans Delayed, Changed

Nearly two-thirds of teens surveyed said that a parent or guardian experienced some financial impact because of COVID.  Most commonly, 29% are working from home, but 21% are concerned about paying bills and 17% are working fewer hours.  The result: More than half are concerned about the financial impact that the pandemic is having on their families. “This survey shows that the Class of 2020 is immediately feeling the financial impact of COVID-19 on college,” notes Christine Roberts, Head of Student Lending at Citizens. 

When it comes to your kids and money, and plans for college specifically, two-thirds of respondents say their plans for after high school graduation have changed as a result of COVID.  Some 14% report that they have delayed college plans, 12% have changed the school that they plan to attend, 10% have decided to attend school exclusively online, and 7% have decided to forego college altogether. About one-quarter are now planning to work to earn money. 

Black and Hispanic Families Feeling The Impact More

Sixty percent of Black and 59% of Hispanic 11th and 12th graders report that COVID-19 has affected how they will pay for college, compared to just under half of their white peers.  Similarly, greater percentages of Black (73%) and Hispanic (72%) students report changed post-high school plans.

Taking Steps In The Right Direction for Your Kids and Money

How can parents help teens and young adults wrap their arms around college planning, and talking to their kids about money, in these complicated times? A few suggestions.

Open the door to the post-high school conversation early. Whatever your family is planning as far as financing college goes, you’re going to want to bring your teen into the tent sooner rather than later. Having a greater understanding about a) how much college costs and b) whether they can expect financial help will enable them to better plan their future. You want to foster a realistic discussion of the differences in price between public schools and private ones, and how doing two years at a local community college before transferring to a four-year school can significantly cut the price. Similarly, if your teen is interested in a trade school, taking a gap year, or moving out on her own, all of those roads have costs associated with them as well. Discuss.

Encourage them to cast a wide net. As I discussed on a recent episode of the HerMoney podcast with New York Times Columnist Ron Lieber, author of The Price You Pay For College, merit aid has become a hugely important factor in financing college. Your child will have the best shot at getting a sizable amount if they apply for a wide range of schools, including schools that want to have them based on their academic (or other) achievements. 

Go through the real-life numbers. Before your child borrows for college, make sure you go through the numbers on repayment when talking to kids about money. The total amount borrowed can look so large that it seems unreal. What’s important to get a grip on is the monthly payment upon graduation and how much your child will need to earn in order to both make those payments and achieve her other life goals, like moving out of your house, or paying for a car.

Finally, encourage optimism. Only one in five high school graduates from the class of 2020 have the goal of getting a college degree in the next 10 years, compared with nearly twice as many teens who have not yet graduated high school. By the time they’re a decade past high school graduation, 42% of those younger students also aim to be financially independent from their parents and 35% to buy homes. Help them chart a course to get there.


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