Parents assist much of teens' spending, study suggests

By Jennifer Wirth
Florida Today

Let's face it, teenagers love to shop. But whose money are they spending?

Autumn Phelps, 17, of Satellite Beach, Fla., works part time at Domino's Pizza. Phelps' parents bought her a car to get to that job, while Autumn pays for the gas, which is about $10 a week. Gannett News Service

A group called Teen Research Unlimited said 32 million American teen consumers and their parents spent $170 billion in 2002 on items such as computers, cell phones and pagers — about $101 each week on personal and household expenses for the teen.

Take, for instance, Autumn Phelps, 17, of Satellite Beach, Fla.

"We contribute to her clothing, but designer clothes, she can buy with her own money," said her mother, Jill Phelps.

Autumn's "own" money comes from a part-time job at Domino's Pizza. For her to get to that job, Autumn's parents bought her a car, while Autumn pays for the gas — about $10 a week.

"Most of my friends have jobs, but not all of them have cars," Autumn said.

Autumn's parents agreed to pay for her car insurance, which doubled their monthly insurance payment because, according to Autumn's father, Lee Phelps, "teenagers are in the highest-risk category."

Debbie Brown of Merritt Island, Fla., knows that risk well. When her 16-year-old daughter, Nicole, asked for a car, Brown said no because of the high cost of insurance.

"I can't get her on my insurance without paying an extra $120 a month," Brown said. "Even though Nicole said she'd cover it, I don't want her working so hard just for a car. So, for now, I'm telling her, 'No.' "

Debbie Brown said she makes sure her daughter has all the necessities, including clothes, shoes, food and healthcare. She also has her enrolled at a private school. But the costs add up, and there are limits.

"I have to limit the extras I buy for her because there are a lot of essential needs that come up, like yearbooks, field trips and snacks," Brown said.

With the money Nicole earns at Chick-fil-A, she buys items her mother won't — such as makeup, hair dye and her cell phone.

In 2000, the Department of Labor says, 2.9 million teenagers 15 to 17 worked during the school year. In the summer months, that number jumped to 4 million. These teens typically work for minimum wage and an average of 18.2 hours each week.

For 17-year-old Olivia Hattan of Melbourne, Fla., a part-time job is not an option.

Her parents, Carl and Jean Hattan, believe a job would interfere too much with her education. Instead, the 17-year-old receives an allowance from her parents of $20 each week.

But her dad said he and his wife also pay her car payment, gas costs, insurance and clothing costs.

"My wife and I feel very strongly that she concentrate on her education," he said. "But we teach her to be frugal. Instead of $50 sneakers, we encourage her to buy $16 sneakers at Payless."

That's advice Pam Hart, a counselor with Consumer Credit Counseling Service in Melbourne, heartily agrees with.

"By 21, it's too late," Hart said. "I can't tell you how many young adults we see in serious financial trouble simply because their parents never taught them fiscal responsibility."

Jill Phelps said she started imparting good financial advice early on, hoping to help her avoid the credit-card trap many young adults find themselves in. The Phelpses co-signed for a Visa card for Autumn, but payments on it are strictly Autumn's responsibility.

"Autumn has a checking and savings account, and it's important to teach her now that she must only buy something with her Visa if she has the money to cover the purchase already in the bank," Jill Phelps said. "We want her to learn that it must be paid in full each month."