Jim Liebelt's Youth Culture Watch

How College Students Use Credit Cards

A 2009 study from Sallie Mae takes a look at how today's undergraduates are using credit cards. Given the current state of the economy, there is some cause for concern about college students' use of credit cards, their ability to repay, and the amount of debt they might be accruing.

Despite the credit freeze, college students last year used credit cards more than ever before, including charging tuition and other direct education expenses, according to a new study from Sallie Mae, the nation's leading saving- and paying-for-college company.

According to the report:

• Nearly one-third (30 percent) put tuition on their credit card, an increase from 24 percent in 2004, when the study was last conducted.

• In total, 92 percent of undergraduate credit cardholders charged textbooks, school supplies, or other direct education expenses, up from 85 percent in the previous study. Students who used credit cards to pay for direct education expenses estimated charging $2,200, more than double 2004’s average of $942.

• Eighty-four percent of undergraduates had at least one credit card, up from 76 percent in 2004. On average, students have 4.6 credit cards, and half of college students had four or more cards.

• Only 17 percent said they regularly paid off all cards each month, and another 1 percent had parents, a spouse, or other family members paying the bill. The remaining 82 percent carried balances and thus incurred finance charges each month.

Source: Sallie Mae
https://www.salliemae.com/about/news_info/research/credit_card_study/

Back-to-College Spending Falters as Freshmen Cut Back

In a dramatic shift, back-to-college spending isn't expected to rise this year because of a sharp drop in spending by freshmen and their parents.

First-year college students will spend 19% less on back-to-college shopping, according to National Retail Federation survey data. The decline is a setback for struggling retailers, who are trying to boost sales during their second-biggest season after the winter holidays.

"Freshmen have always been the cash cow for retailers when it comes to the back-to-college season," NRF spokeswoman Ellen Davis says.

The projected downturn in spending is "an eyebrow-raiser," though slight shifts in spending in other grade levels should make up for the loss.

Overall back-to-college spending should be flat, with shoppers expected to spend $616.13 on average in 2010, down from an average of $618.12 spent last year.

Driving the decline in freshman spending is an expected cutback in the purchase of electronics.

On average, freshmen plan to slash their spending on laptops, MP3 players and other gadgets by more than $150 this year, the NRF says.

The Consumer Electronics Association predicts electronics sales will be up 3% from 2009, far better than last year but well below 2007 and 2008.

The NPD Group's Marshal Cohen attributes the decline in electronics sales to more students living at home and enrolling in local colleges.

Source: USA Today
http://www.usatoday.com/money/industries/retail/2010-08-13-backtocollege13_ST_N.htm

For Teens, Bleak Job Picture Not Looking Brighter

It’s been a long, frustrating summer for employment-starved teens. And most unemployed adolescents will struggle to find work at least until the holiday season, the latest data suggests.

The employment picture has been bleak across the board, but it’s been particularly tough on teens. The U.S. unemployment rate was 9.5 percent last month, but for teens it hit 26.1 percent — and July is typically the peak of the summer employment season for teens. It marked the worst summer hiring season for teens since 1949, according to an analysis by Challenger, Gray & Christmas, an outplacement firm.

Part of the problem: Teens are facing unusually heavy competition from millions of older workers, many of whom have been unemployed for months or longer.

The financial need of teenagers is greater than some people realize. Increasingly, teens are searching for work to save for college or provide support for their unemployed parents.

Source: MSNBC
http://www.msnbc.msn.com/id/38666248/ns/business-eye_on_the_economy/

Fewer Low-Income Students Going to College

Fewer low- and moderate-income high school graduates are attending college in America, and fewer are graduating.

Enrollment in four-year colleges was 40% in 2004 for low-income students, down from 54% in 1992, and 53% in 2004 for moderate-income students, down from 59% over the same period, according to  a report recently submitted to Congress by the Advisory Committee on Student Financial Assistance.

If that trend has continued, low- and moderate-income students who don’t move on to college face an even darker outlook. The unemployment rate for 16- to 19-year olds averaged 17% in 2004, the jobless rate for people over age 25 with just a high school diploma averaged 5% the same year. So far this year, those figures have jumped to 25.8% and 10.6%, respectively.

College expenses and financial aid have become increasingly larger considerations for parents and students, driving more qualified students away from enrolling in four-year colleges.

Persistence through four-year colleges dropped to 75% in students entering in 2003 for low-income students, down from 78% in students entering in 1995, while persistence for students from moderate-income families remained at 81%. Persistence rates for low- and moderate-income students in two-year colleges, however, fell 10 percentage points to 49% over the same period.

Source: Wall Street Journal
http://blogs.wsj.com/economics/2010/07/07/fewer-low-income-students-going-to-college/

Cost of Raising a Child Increases

And the cost estimate DOESN"T include college...

A child born in 2009 will cost nearly a quarter of a million dollars, or about $222,360, to raise to maturity, up a little less than 1% from 2008, the Agriculture Department said Wednesday in its annual report on the average cost of raising a child. (The department runs the survey to help courts and state governments set child-support guidelines.) Expenses for child care, education and health care rose the most compared with 2008, while the cost of transportation for a child actually fell, the department said. Annual child-rearing expenses for the average middle-income, two-parent family range from $11,650 to $13,530, depending on the age of the child, the department says.

Child care accounts for 17% of the total spending, and education for 16% of the total. The cost of housing makes up nearly one-third of the total; this is gauged by the average cost of an additional bedroom. But the tally excludes any spending on kids over age 17, so it doesn’t include one of the biggest and fastest-growing single financial outlays many parents make: the cost of sending your child through college. Higher-education costs aren’t included, the department says.

Source: Wall Street Journal
http://blogs.wsj.com/juggle/2010/06/10/cost-of-raising-a-child-ticks-up/

Father's Day Spending

According to the National Retail Federation's 2010 Father's Day Consumer Intentions and Actions Survey, the average person will spend $94.32 on dear ol' dad this year, up from $90.89 last year. Total Father's Day spending is expected to reach $9.8 billion.

Shiny new toys for dad will be one of the biggest hits this year, along with special outings, gift certificates and clothing.

The survey found that 39.9% of those celebrating dad this year will treat him to a special outing such as dinner or brunch, spending $1.9 billion. 31.2% will give dad a gift card, spending an estimated $1.2 billion. 36.7% are planning on spending a total of:

$1.3 billion on clothes
$1.2 billion on electronics,
$749 million on greeting cards,
$578 million on tools or appliances,
$550 million on home improvement or gardening tools and
$400 million on automotive accessories.

Source: Center for Media Research
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=130038

Recession Hits Male Teens Harder Than Females

Gender mattered during this recession.

The downturn, the worst since the Great Depression, hit men harder than women, a fact that has been widely discussed.

What is less well known is that the recession hit male teens harder than female teens. And economists are still trying to sort out the reasons.

Males ages 16 to 19 have an unemployment rate of 29.3 percent. That compares with a 21.4 percent rate for females of the same ages, according to the U.S. Bureau of Labor Statistics.

During the national recession, which began in December 2007, the male teen jobless rate peaked at 30.9 percent in December 2009. By contrast, the peak for girls was 24 percent, reached in October.

Source: Newsday
http://www.newsday.com/classifieds/jobs/recession-hits-male-teens-harder-than-females-1.1945875

Generation Y: Huge Debt, No Savings

They're called "Generation Y" — teens and twentysomethings known stereotypically for their coddled upbringing, confidence, opinionated dialogue, free-spending habits and openness to change.

Ultimately, however, the more than 50 million members may be best remembered for whether they can overcome the dire financial straits that plague many of them.

Even before the recession, those in Generation Y — the latest products of a get-it-now, pay-for-it-later mind-set that has permeated the nation's economy — faced a range of financial pitfalls as they embraced expensive high-tech gadgets and added credit card debt onto student loans.

Now, stagnant wages, job insecurity, the decline in employer-sponsored health insurance and retirement benefits, the rapid increase in basic expenses, soaring debt and minimal savings have jeopardized the economic security of the entire generation, according to a recent report by Demos, a public policy research and advocacy think tank.

Their generation is the first in a century that is unlikely to end up better off financially than their parents, the Demos report said.

"The recession has hit them hard," says Jose Garcia, associate director of policy and research at Demos, based in New York. "It affects their income potential, their saving potential and their career-ladder potential."

Kristen Ammerman, 21, a senior at Michigan State University, faces such challenges and sees her Gen Y classmates struggling with financial issues — while seemingly oblivious to the potential consequences.

"I work at a part-time job, have incredible debt and get food stamps," she says. "I'm still short on rent every month. ... My friends all want the newest and best things. They spend money on them any chance they get."

No standard definition for Generation Y exists, but analysts generally classify anyone born from the 1980s to 2000 as members. Demographers also call them the Millennial Generation.

Source: USA Today
http://www.usatoday.com/money/economy/2010-04-23-1Ageny23_CV_N.htm

Tidbits on Tween Spending

In reading an article on tween fashion I came across some demographic information and am passing these tidbits on tween spending along to you...

• Still influenced by mom, 8- to 14-year-olds can't drive to the mall but wield $43 billion in annual spending power, according to C&R Research data in EPM Communications' Tween Spending & Influence report. Marketers have expanded the age range for tweens beyond its narrow definition of 9- to 12-year-olds.

• Tweens primarily get their spending money from their parents, typically receiving $35 a week in allowance during the summer and $11 during the school year, said Ira Mayer, publisher of the New York-based Youth Markets Alert newsletter.

• The U.S. tween market is made up of about 21 million young people.

Source: Dallas Morning News
http://www.dallasnews.com/sharedcontent/dws/bus/industries/retail/stories/042010dnbusjcpenney.39cf477.html

Multi-Generational Family Households Make a Comeback

According to a report based on the Pew Research Center's public opinion surveys and analysis of 2008 U.S. Census Bureau data, a record 49 million Americans, or 16.1% of the total U.S. population, lived in a family household that contained at least two adult generations or a grandparent and at least one other generation.

In 1940, about a quarter of the population lived in an extended family household one; by 1980, just 12% did, says the study. A range of demographic factors contributed to this decline, including the rapid growth of the nuclear-family-centered suburbs; the decline in the share of immigrants in the population; and the sharp rise in the health and economic well-being of adults ages 65 and older.

The multi-generational American family household is staging a comeback, driven in part by the job losses and home foreclosures of recent years but more so by demographic changes that have been gathering steam for decades.

Key findings about multi-generational family households and living arrangements of older adults:

• This 33% increase since 1980 in the share of all Americans living in such households represents a sharp trend reversal. From 1940 to 1980, the share of Americans living in such households had declined by more than half (from 25% in 1940 to 12% in 1980)

• The growth since 1980 in these multi-generational households is partly the result of demographic and cultural shifts, including the rising share of immigrants in the population and the rising median age of first marriage of all adults

• At a time of high unemployment and a rising foreclosures, the number of households in which multiple generations of the same family double up under the same roof has spiked significantly. From 2007 to 2008, the number of Americans living in a multi-generational family household grew by 2.6 million

One reason for the reversal in the multi-generational household trend, says the report, is the change in the median age of first marriage. The typical man now marries for the first time at age 28 and the typical women at age 26. For both genders, this is about five years older than it was in 1970. A byproduct of this cultural shift is that there are more unmarried 20-somethings in the population, many of whom consider their childhood home to be an attractive living situation, especially when a bad economy makes it difficult for them to find jobs or launch careers.

Source: Center for Media Research
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=125881