Teens and Money: Fewer Financial Responsibilities Today Create More Savers among Teens

Today’s teenagers are saving for college more than ever before, according to a new survey released by TD AMERITRADE Holding Corporation (NASDAQ: AMTD).

According to the survey, the vast majority (62%) of young adults surveyed (ages 14-19) report saving their money to pay for all or part of college or higher education programs, compared to just 40 percent of adults surveyed (ages 20-59) who saved for higher education during their adolescent years. In fact, college is the top savings goal for today’s teens. In addition, 78 percent report that they would like to establish a plan with their parents that involves them splitting the cost of education.

And while adults surveyed recalled saving less for larger expenses such as education during their adolescent years, they were more likely to have been responsible for discretionary expenditures, such as bill payments and transportation. Teens today are more likely to rely on their parents for such expenses. More specifically, the survey found the following to be true of discretionary expenses among teenagers from past generations and teens today:

• 19 percent of adults surveyed were responsible for paying off their entire credit card balances on their own when they were teens, compared to 7 percent of young adults surveyed today.
• 36 percent of adults surveyed recalled that they were responsible for all expenses associated with a car or motorcycle when they were teens, compared to 9 percent of young adults surveyed today.
• 26 percent of adults surveyed recalled that someone else was responsible for all clothing-related expenses when they were teens, compared to 39 percent of young adults surveyed today.

"While teens today are not being held responsible for elective expenditures as much as past generations, they are planning ahead and saving more for the future. This is likely due to the fact that young adults today are more informed on major expenses such as rising education costs,” said Diane Young, director, retirement and goal planning, TD AMERITRADE. "Parents should embrace this willingness from teens to contribute and use it as an opportunity to educate them on all aspects of long-term financial planning.”

Additionally, Young believes the findings may reflect the value of obtaining an education across different generations, as 84 percent of teens surveyed today reported that they consider education to be essential to future success, compared to 56 percent of adults surveyed who felt the same way about education during their adolescent years.

"In today’s competitive environment, education has never been more important,” Young continued. "Young adults seem to recognize this reality, and they want to plan accordingly.”

How to Put a Plan in Place for Education-Tips for Getting Started

1. Assess the Details

Young says the first step is for parents and teens to analyze their current situation together, taking into account what they already have saved for college and how long it will be before the first year of school begins. TD AMERITRADE provides a college planner⁽¹⁾ to help them determine savings goals for college tuition costs and calculate the amount to be invested each year to meet that goal.

2. Select an Education Savings Vehicle

After parents and teens have assessed their financial status and anticipated their impending needs, the next step is to compare the benefits of different education savings options, such as a 529 College Savings Plan, custodial account, or Coverdell Education Savings Account, to determine which is the best fit.

3. Monitor Your Financial Progress Together

Young believes it is not enough to simply establish a savings plan, you must monitor your progress along the way to ensure your strategy is helping you meet your financial goals. Keeping score along the way is an important responsibility that can be shared by both parents and teens.

For more information on the various college savings options available to parents and teens planning for education expenses, visit www.tdameritrade.com.

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Survey Methodology

These results are based on a survey conducted by Opinion Research Corporation of Princeton, New Jersey on behalf of TD AMERITRADE. Seven hundred sixty eight (768) adults who are age 20 to 59 along with 365 teenagers 14-19 participated in a telephone survey conducted August 6-10, 2009. Survey participants across the country were asked to share their views on the financial responsibilities they have or had as teenagers. The margin of error among the adults in this survey is ±3%; among the teenagers, the margin of error is ±5%. This means that in 19 cases out of 20, survey results based on 768 respondents will differ by no more than 3 percentage points in either direction from what would have been obtained by seeking the opinions of all eligible U.S. adults who are 21 to 59 years of age. Similarly, the results of the survey among teenagers will differ by no more than 5 percentage points in either direction. Opinion Research Corporation and TD AMERITRADE are separate, unaffiliated companies and are not responsible for each other's products and services.

About ORC

Opinion Research Corporation is a leader in global market research with expertise in Information Technology and Telecommunications, Healthcare, Financial Services, Public Services and Consumer Behavior. For more information, please visit www.opinionresearch.com .

About TD AMERITRADE Holding Corporation

TD AMERITRADE Holding Corporation (NASDAQ: AMTD), through its brokerage subsidiaries,⁽²⁾ combines innovative trading technology, easy-to-use and understand trading tools, investment services, investor education and superior client service to create a market-leading financial services experience. Now home to the award-winning thinkorswim trading platform⁽³⁾ and the Investools investor education program, TD AMERITRADE provides millions of retail investors, traders and independent registered investment advisors (RIAs) with the tools, service and support they need to help build confidence in today’s rapidly-changing market environment. The Company’s common stock trades under the ticker symbol AMTD. For more information and resources for journalists, please visit the TD AMERITRADE newsroom at www.amtd.com.

⁽¹⁾Third-party research and tools are obtained from companies not affiliated with TD AMERITRADE, and are provided for informational purposes only. While the information is deemed reliable, TD AMERITRADE does not guarantee its accuracy, completeness, or suitability for any purpose, and makes no warranties with respect to the results to be obtained from its use. Please consult other sources of information and consider your individual financial position and goals before making an independent investment decision. Past performance does not guarantee future results.

⁽²⁾TD AMERITRADE, Inc., member FINRA (www.FINRA.org) /SIPC (www.SIPC.org), TD AMERITRADE Clearing, Inc., member FINRA/SIPC, and thinkorswim, Inc., member FINRA/SIPC/NFA (www.nfa.futures.org).

⁽³⁾thinkorswim was rated #1 overall online broker, "best for frequent traders,” and "best for options traders” in Barron’s ranking of online brokers, 3/16/2009. thinkorswim was evaluated versus others in eight total categories, including trade experience/execution, trading technology, usability, range of offerings, research amenities, portfolio analysis & reporting, customer service & access and costs. thinkorswim topped the list in 2009 with the highest weighted-average score. Barron’s is a registered trademark of Dow Jones & Company ©2009.

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