Savings and Investments

average teen spends over $4,000 a year, and few teens understand what a credit report is, how to avoid identity theft, the dangers of credit cards, and the difference in buying vs. leasing a car.

Most young adults understand the importance of saving for the future, but haven't started saving, and are still battling debt. Surveys indicate that most young adult women and men live pay check to pay check. One survey showed that about 40% had a credit card balance of $5000 or more and that one in five owes more than $10,000 in credit card debt.

Do you each realize that it is not unusual to be charged 12% interest on a credit card balance?

That means you waste $1,200 a year (of hard earned cash) if you have a $10,000 credit card balance. Wow! That is $1,200 hard cash you could have to?????

Since excessive debt is pressing concern for young people, most of them have not begun an effective saving plan. While most of these wonderful young adults mentally rate saving for retirement more important than buying a home, having nice clothes, or even getting married, most do not have an investment plan. Why? Discipline is a big factor, but lacking in investment knowledge is also a big factor.

Leasing or Buying a car: Everyone needs a car, but unless you really have lots of extra cash, be content to drive an inexpensive dependable car and do the minor repairs until you do have the needed extra money to get your dream auto.

Then try to pay cash. Don't laugh. Just pay close attention. Try hard not waste any money on loan interest, which only makes the bank stockholders rich from your hard work.

Leasing can even be good for a teen student if you carefully consider such things as how many miles you will drive a year, how long before you can afford to buy a car, and do you prefer to work on your own car or customize it.

You can immediately have a car when you buy or lease. It is better to buy a car if you wish to customize it. If you plan to drive more than 12,000 miles in a year, consider buying. If you do not have the money to buy, consider leasing. If you feel you can save buy in two or three years, consider leasing.

Leasing accounts for about one third of new car deals, but don't even consider a new car. Only read this for information.

Leasing offers lower monthly payments than buying and often lower down payments or no down payment. You can drive away in a new car for less cash up front. However, be careful that you fully understand your lease contract. If you exceed your preset mileage limit, they may charge you a steep penalty of up to 25 cents a mile. They may charge you for excess wear and tear.

Be sure you examine you lease car carefully and take "dated" pictures of every inch of the car.

You will be charged for every scratch and dent when you return the car.

You cannot make any changes to a lease car...not even installing a stereo system. If you need to get out of the lease for any reason, they may charge you a substantial early termination fee or penalty, which could be thousands of dollars.