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Teens spend more than some states, countries
Teens Cash In

Teenagers in the United States between the ages of 12 and 19 spent more than $169 billion in 2004, $30 billion more than the entire state of Texas budget for the 2006-07 biennium, according to a study by Teenage Research Unlimited (TRU).

Their parents spent an additional $278 billion on them, leaving teenagers with an influence of more than $450 billion in spending in 2004.

"Total U.S. teen spending exceeds the gross domestic product of countries such as Finland, Norway, Portugal, Denmark and Greece," said Rob Callender, the trends director with TRU, an Illinois-based consulting firm.

Big spending
From 1999 to 2004, teenage spending increased nearly 40 percent from $122 billion to $169 billion, according to TRU.

"Teens are quite resourceful when it comes to getting money," Callender said. "Parental handouts make up the bulk of the teen budget, but part-time jobs, odd jobs and gifts also play a significant role.

"Teens spend an enormous amount of money on food, whether from drive-thrus, convenience stores or restaurants. On one level, it's obvious: they're growing, and they're always hungry. But more than that, eating represents one of the best ways for teens to gather with friends. Although many business owners and some malls discourage teens in groups, restaurants tend to be fairly obliging. Eating tends to be a very social activity for many teens."

Teens spend most of their money on clothes and food, according to a 2003 study by Coinstar, Coinstar Teens Talk Poll: Teens Report on Money, Spending and Buying. Teens spend 33 percent of their weekly earnings and allowance on clothing and an additional 21 percent on food. Other popular items include movies, music and games.

Of the nearly $2 billion in sales tax revenue the Texas Comptroller's office collected in 2004, almost $244 million was generated from teen spending on clothing and movies, according to the Comptroller's Revenue Estimating Division.

As teens take on activities such as working and driving, they pay other taxes in addition to sales tax, such as payroll taxes and gasoline taxes, but most statistics do not include a breakdown by age.

Marketers have no doubt that teens are an important force in the economy, though, and they are targeting teenagers versus parents, Callender said.

"Teens are increasingly regarded as the family experts where technology is concerned," he said. "Ten years ago, many marketers didn't believe there was any reason to target teens because they simply didn't believe they could make big-ticket purchase decisions. The industry has changed course, as iPod advertisements and the Dell Dude can attest."

And teens know it.

"Teens are very aware of the importance marketers place on them," Callender added. "They've grown up surrounded by marketing, and they're accustomed to being pitched all manner of products and services. As a result, they're rather demanding consumers; they require a great deal of product information delivered in a minimum amount of time, requiring minimum effort on their part."

Working hard for the money
High school senior, Chelsey Christopherson, is working two jobs this summer in Dallas to pay for her everyday expenses and to save up for college.

"My parents own their own business, so I'm in charge of babysitting their kids," Christopherson said. "I go from 9 to 5 every day, so that's 40 hours give or take a couple of hours. I also work at a gym for about 20 to 25 hours a week."

Christopherson earns $7.50 an hour for her babysitting job and $8 an hour for her job at the gym, bringing her total weekly wages to more than $600. That's more than $2,400 a month. Of that money, Christopherson said she puts half of it in the bank to save up for college but readily spends the other half on movies; the local theme park, Six Flags Over Texas; and eating out.

Unlike full-time jobs for adults, there's always readily available work for teens, said Michael Wood, the vice president of TRU. Teens can always mow someone's lawn or shovel a driveway to earn a few bucks, he added.

"If that doesn't work, there's always mom and dad," Wood said.

Soon-to-be college freshman Chase LeBlanc largely relies on Mom and Dad to supplement his income. LeBlanc works odd jobs throughout the year as a lifeguard, at a fireworks stand and at a concession stand during baseball season, but usually gets money from his parents.

"I don't get a weekly allowance from my parents, [but] my mom usually gives me about $22 a week for lunch and other things," he said.

LeBlanc's weekly spending of $22 is well under the $104 average spent by U.S. teenagers per week in 2001, according to TRU. Although LeBlanc admits to spending most of his money on video games and "Magic: The Gathering" cards, he is saving his money for summer vacations in Florida and Kansas.

Rainy day funds
Today's teenagers, like Christopherson, are big on saving, according to a 2003 study by Nickelodeon Online/Harris Interactive KidPulse and MTV/Harris Interactive YouthPulse. The study found that teenagers and young adults between the ages of 13 and 24 save about 25 percent of their income.

Those figures may be misleading, though. Teens may be saving more money, but those savings don't last, Callender said.

"Teens report an interest in 'saving,' but their interpretation is a bit different than that of adults," he said. "Rather than saving for retirement or simply socking money away for later, they're more likely saving for a large purchase."

A 2003 study by Coinstar found that 18 percent of teens save up their money in order to buy specific items or to make special purchases. Six percent save all of the money they earn or receive, with the remaining 76 percent spending at least some or all of their money.

But Callender said he has interviewed teens, like Christopherson, that are saving to help pay for college.

Investing in the future
Programs like the one at Ed Franz Elementary School in San Antonio are helping teach kids to save money at an earlier age, said Amy Gill, a representative of Randolph Brooks Federal Credit Union. In 2003, the credit union opened a deposit-only branch within the elementary school that is staffed by students.

"We hire the students, and they run the branch itself," Gill said. "They are in control of taking the deposits, and they are in control of the cash box."

The bank hires 3rd- 4th- and 5th-graders, and the students only work for three months to allow the school to include as many students as possible.

The student workers help their classmates set up accounts and handle the deposits that come through.

"A lot of the deposits are 50 cents or $1 here and there that mom and dad aren't going to have time to drive them to the bank for," Gill said.

The credit union has similar branches in a San Antonio middle school and is opening a branch in a New Braunfels high school.

"The high school [branch] will have online capability and have an ATM and be a lot more realistic," Gill said. "It's going to be a branch that can key into our system."

The beauty of these programs is they're open to everyone, and they make it easier for kids to begin saving, Gill said.

"[The program] helps them to see and start saving and pull them out of that cycle where they just don't save in their family," Gill said. "It's not a return today, it's a return for the future."

Ann Holdsworth