Big spenders! Many teens want the latest, the coolest, and the fastest. But learning about "dollars and sense" is also important.

What's on your "must-have" list? A cell phone, an iPod, a laptop? If you're like many U.S. teens, you want all of the above--not to mention the latest fashions from Abercrombie and American Eagle.

There's no question that today's teens are big spenders. In 2003, 12- to 19-year-olds in the U.S. spent a whopping $175 billion, reports Teenage Research Unlimited (TRU), a market research company based in Chicago, Illinois. That amount is up 38 percent since 1997.

"Teens have a much bolder attitude toward spending than their parents," says TRU Vice President Michael Wood, mostly because they're not the ones paying household bills.

So, are today's young people spendthrifts (wasteful)? Not at all, says Rob Callender, TRU's Senior Trends Manager: "This is an extremely responsible bunch. They are very [practical]."

The economic slowdown in 2001, Callender explains, led many parents to have "frank discussions" with their teens "about the [consequences] of poor planning, or not paying careful attention to finances." Such discussions, in turn, have made many teens more attentive to their own "bottom line."

Having What's Hot

Are you careful with your money? JS spoke with students at Allendale Columbia School in Rochester, New York, to get their views on spending, saving, and earning money.

"I get money from my parents, but mostly I work," says Gabriella Perez, 12. "I worked at two summer camps this year." Henry Weaver, 13, mows his neighbor's lawn to earn extra money.

Earning money is a good way to develop sound financial practices. But the temptation to spend beyond one's means can be big in our society, where much emphasis is placed on material possessions. Many teens are eager to imitate the lavish lifestyles of celebrities they see on television and read about in magazines. After Britney Spears was spotted in pricey UGG sheepskin boots, for example, millions of girls rushed to get their own pair.

The trappings of celebrity can lure boys, too. Jason Robinson, 13, says that he takes note when athletes, actors, and musicians flaunt their fancy cars and bling-bling on television.

"I watch MTV Cribs, and it shows all the stars with their big houses and awesome gadgets," says Jason. "It makes me want to be like them."

Peer pressure is another big influence on teen spending. "If I shop with my friends," says Allyson Chapman, 13, "I usually get something similar, if not the same, as what they have."

Staying Out of Debt

While Allyson enjoys shopping, she is also concerned about her finances. She knows it is important to avoid owing money. Otherwise, she says, you could "go into debt and lose a lot of possessions."

These days, credit-card companies aggressively market their products to college students. But many young people are unprepared for how easily spending can spin out of control--leading to adult-sized debt. In Florida, for example, "45 percent of college students are in credit-card debt, with an average balance of $3,066," says Tom Gallagher, head of the Florida Department of Financial Services. High interest rates make paying off such debts extremely difficult.

How well do younger teens understand the risks of using plastic? Although 20 percent of teens think it's OK to have credit cards, TRU's Callender reports, nearly twice that number--38 percent--believe that only adults should have them. That, says Callender, "speaks volumes about teens' awareness of how problematic credit cards can be."

Callender echoes what many financial analysts say: It's never too early to learn how to be responsible with your money. What grade would you give yourself for money management?

Words to Know

* beyond one's means: more than you can really afford.

* bottom line: the line in a financial statement that shows profit or loss.

* interest rate: percentage that a borrower of money must pay the lender in return for use of the money.

RELATED ARTICLE: Money-wise tips.

* Create a three-column budget sheet. In the first column, write the amount of money you earn and receive in a week or a month. Use the second column to list your total expenses. In the third, write the amount left over. This is money to save "for a rainy day."

* Earn extra spending money by babysitting or doing extra chores at home. Tanisha Locke, 10, of Findley Academy in Akron, Ohio, earns money by cleaning her room and raking leaves.

* Don't buy what you can't afford.

* Before you make a purchase, compare prices.

* Talk to your parents about opening a savings or investment account.

Your Turn

THINK ABOUT IT

1. Should 12- to 19-year-olds have credit cards? Why or why not?

2. Is there too much emphasis on money and possessions in American culture? Explain.