Just because a teen's room and board are typically paid for doesn't mean that teenagers don't face financial problems. One main issue is earning money. Teens may need to earn money to help their families meet expenses, pay for car insurance and gas if they have a car, save for college or pay for personal expenses or entertainment outings. Finding ways to earn money can be tough, especially when juggling a full-time school schedule.
Helping with Family Expenses
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Some teens, especially those from low-income families, may face a lot of pressure to find a job to help pay for daily necessities like groceries and housing. A study from the University of Michigan Institute for Social Research surveyed 49,000 high school seniors from classes of 1981 through 2011 and found that about 9 to 12 percent of teen males and 10 to 14 percent of teen females reported giving half or more of their income to help their families. Teens in these situations may need to help pay for meals, cover their own clothing expenses for school or even cover basic expenses like school supplies. They may also need to invest in a used car to help get them to and from work, which can lead to expenses for car insurance and gas.
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Saving for College
The same study found that among high school seniors, about 17 percent saved half of their money or more for college. Teens who want to attend college often feel pressure to find jobs and work longer hours because the costs of college are beyond their parents' reach. So teens are faced with the decision of either working now and saving toward college or incurring huge student loans to cover their college education.
Finding a Part-Time Job
To help solve their financial problems, teens have to find part-time jobs, and finding these jobs isn't easy. Jobs for teens include retail work, as in a clothing store, waiter in a restaurant or cashier in a grocery store. Teens might also choose jobs like tutoring, summer work as a lifeguard, pet-sitting, babysitting or more technical jobs like building websites part-time. Finding jobs involves visiting a lot of stores and putting in a lot of applications, both in person and online. The process can take a long time and the competition can be high, especially if they're looking for seasonal or summer jobs.
The Cost of Working Long Hours
One of a teen's main financial problems is the cost -- not financial -- associated with working part-time. Although he's earning money, he may also be shortchanging his education. The University of Michigan study found that working more than 15 to 20 hours a week can lead to lower grades and a higher chance of substance abuse. This is a huge dilemma for many teens: Do they work longer hours so they can earn more money, with the possibility that it might affect their earning potential as an adult?
Financial Misinformation
Teens also suffer from one other significant source of financial woe: misinformation. According to CNBC, "Teens are failing at financial literacy" through lack of basic education about managing money. Because they're uninformed or misinformed, some teens may not even realize they have a problem at all and, thus, not seek advice before making important financial decisions that will affect their future. According to Business News Daily, as many as 24 percent of teens who responded to a survey didn't know the difference between a credit card and a debit card.
This education gap can, unfortunately, lead to a lot of financial mistakes that teens will carry with them for years to come. Although teens are working part-time jobs and spending money on things they enjoy, many are not learning good spending and saving habits. This could turn into the main source of their financial problems now and long into their adulthood.