There’s no question that money is important in our society. It’s a big deal—a really big deal. It’s next to impossible to live without money. Take a look around your room. Chances are you have a phone, a CD player, and maybe a TV. Maybe you’ve got your own computer or one you share with a sister or brother. You probably have a closet full of clothes and a fridge full of food in the kitchen. All the things we have (and often take for granted) are there because somebody had the money to buy them. We need money to get the necessities of life—and more money for all the extra stuff we want.

Just think for a minute what your life would be like without money. No money equals no cool clothes, no after-school stops at Burger King, and none of those little gizmos and gadgets you like so much. Having no money is a big bummer for you, and an even bigger bummer for adults. If your personal cash flow dries up, you might miss out on tickets for the Blink-182 concert. If your parents’ cash flow stops, you all miss out on having a place to live and enough to eat.

You’ve gotta have it, there’s no question about it. Money really does make the world go ’round, and we Americans are known for wanting to grab more than our fair share of it. We guzzle more resources, buy more, use more, and throw more away than any other society on earth. We love money, and we love what we can buy with it. Let’s have a look at our society’s attitudes toward money and at some of the ways we spend what we make.

Americans have great affection for money, and teens are no exception. We love to make it and we love to spend it. We have thousands of stores in which to shop, millions of items available to buy, and an army-load of advertisers telling us that we need it all. Old Navy, Delia’s, Nordstrom, and Bloomingdale’s; clothes, jewelry, cosmetics, electronics, and music—the lists are endless. So, what are some of the things teenagers die for (at least according to advertisers)? Check out the pages of your favorite teen magazine or the local newspaper sometime, and you’ll get a list that looks something like the following:

Advertisers would like you to believe that you really can’t live without this stuff, and often they succeed. Don’t think, though, that only teens are susceptible to hype. Adults fall for the same kinds of advertising ploys all the time—only their toys tend to be bigger and more expensive, such as sport utility vehicles, convertibles, and platinum jewelry.

The point is that most of us like stuff, and we want stuff—lots of it. We like to do things, too. All of this stuff, and these activities that we love, cost money—a lot of money.

The American economy has been booming, and many Americans, though certainly not all, have been thoroughly enjoying the results. Take a drive around the area where you live and check out the brand-new housing developments with the SUVs parked out front. Notice all the fancy, new electronic stuff that keeps getting sleeker and more sophisticated all the time.

Chances are your school’s parking lot is filled with cars, and I’m not talking Dad’s old junkers, either. How many of your friends have their own cell phones or big-screen TVs in their family rooms?

There’s plenty of money out there, and Americans are making it and spending it in record amounts. There are more than 3.5 million millionaires in America today, and more people have money invested in the stock market than ever before.

We hear a lot about the ongoing prosperity in America, but don’t be deceived into thinking that the boom has benefited all Americans. The income gap between the poorest and richest U.S. families continues to widen.

Money always has been and continues to be a big deal in our society. It buys us what we need and what we want. In many ways, money defines who we are. Because money is held in such high esteem, people who have it generally are admired and respected, regardless of whether they deserve to be. We assume, often incorrectly, that somebody who has a lot of money must be smart, whereas someone without money is somehow deficient.

This isn’t to say that all Americans are obsessed with money and what it can buy for them. There are people—a lot of people—who are satisfied with what they’ve got and think that they have enough money. In fact, the USA Weekend’s 12th annual Teen Survey conducted in 1999 showed that two-thirds of the teens questioned feel they have enough money. On the other hand, more than half of the teens interviewed expect to be better off financially than their parents are when they get to be the same age. So, although they’re content with what they’ve got now, they’re not limiting the financial level they hope to attain in 20 or 30 years.

Yep. Money is real important in America, and there are a lot of people who are willing to do whatever it takes to get it. People work for money, fight for money, marry for money, and sometimes kill for it. In this chapter, we look at why money is such a big deal and the role it plays in your life.

It’s not only millions of adults who are enjoying the benefits of the strong economy. Teens, too, are riding the wave of economic prosperity, whether with money they earn themselves or with handouts from Mom and Dad.

Statistics from the U.S. Department of Labor show that, as a group, teenagers spent $141 billion in 1998—an average of $4,548 each. That’s up 60 percent from just five years earlier, and translates—even at today’s high prices—into a lot of CDs, clothes, jewelry, and burgers.

Because teens have this tremendous buying power, you’re prime targets for retailers and advertisers. Magazines geared toward teens are packed with ads for clothing brands, skin care products and makeup, computer stuff, and jewelry—you’ve seen them. Hollywood loves teens, too, and is more than happy to get its share of your money by producing movies that you’re sure to want to see.

Many of you are big spenders, to be sure. On the other hand, USA Weekend’s 12th annual Teen Survey, published May 2, 1999, shows that nine out of ten teens are saving money; most with specific goals in mind. The survey states that you know way more about making, saving, and investing money than teens ever have before. A lot of you have your own bank accounts and control your own money. Some of you are buying certificates of deposit or investing your money in mutual funds. You’re money smart and, as a group, you’re looking ahead.

“You have to think long term,” said Brooke Richey, a 17-year-old USA Weekend survey participant from Ridgeley, West Virginia. “I know how expensive college is, and I know you have to go to college if you want to do something important. That’s why, instead of going shopping every weekend, I save my money.”

Not everyone, however, shares Richey’s view. Researchers recently followed 9,000 teens from around the country for two years to determine what they were buying and how much they were spending. One of the teens, Saytoria Mathis, a 17-year-old from Milwaukee, says she spends between $150 and $175 a week on clothes, shoes, CDs, and jewelry, and she doesn’t think twice about it. Most of the money is handed to her by her mother and grandmother. Mathis doesn’t like to wait to buy something she wants. “I want it when I want it,” she says.

Attitudes toward money vary, but the need and desire to have it doesn’t. No matter how much you have, how you get it, or what you decide to do with it, money plays and will continue to play an important role in your life.

Maybe you’re saving for a car or to help out with college expenses. It might be that you just can’t live without the latest Abercrombie & Fitch sweater, or you just like to have enough pocket change to grab a snack when you want one. Regardless of what you use your money for, you’ve gotta have it.

Most teenagers depend primarily on their parents for support. I mean, your parents probably don’t charge you rent to live in their house, or make you pay for the food you eat. They probably buy your clothes, or at least some of them. If you work and make your own money, you probably use it for extra stuff that you want or to help with your expenses. Maybe you buy your own Nikes or pay for your own car insurance.

No matter where your money comes from, it’s a sure bet that you need it to get through the day. It’s easy to overlook how much you spend during an ordinary day on things you don’t even think about—a soda here, a bus fare there. Little things add up; if you think about it, you might find out that you spend more than you realize. Consider for a minute how easy it is to spend a lot of money on everyday stuff like movies, ATM fees, bottled water, cosmetics, gifts, admission fees, and fast food.

Our world is expensive, that’s for sure, and it costs money to participate in much of it. You could get away without spending any money, I guess. It wouldn’t be easy, though, and it wouldn’t always be a lot of fun. You couldn’t go to a movie, or even rent one from the video store. You could go to the mall with your friends, but you couldn’t buy a CD, a lipstick, or get anything at the food court. There’d be no new dress or shoes for the holiday dance at school, and you couldn’t borrow your parents’ car if it needed gas. That’s not to say there aren’t all kinds of ways to have fun free of charge (we’ll have a closer look at that topic in Chapter 3, “Keeping Money in Perspective”), but a lot of the things you like to do come at a price.

Although you need money now, you’ll need it even more in a few years. In the next section, we look more closely at the cost of living, at home or on your own. If you think you need cash for the extra stuff you like to buy now, wait until you get a look at how much it would cost to live on your own in the real world!

We’re going to spend a good part of Chapter 2, “Using Money to Get What You Want,” discussing the difference between need and want, so for now just keep in mind that there’s a huge difference. Most of us have far more than we really need, and often we confuse our needs with our wants. There are, however, things that we really do need. We need food, clothing (although we don’t need a closet stuffed with so many shirts and sweaters that we have a hard time closing the door), a place to live, and a way to get around. When you’re living at home, most of your needs are taken care of. When you’re on your own, it’s really a different story.

Most teenagers occasionally think about what it would be like to move out of Mom and Dad’s house and get a place of their own. Wouldn’t it be great! A little apartment someplace, with nobody to tell you that you’ve gotta clean up your room or what time you need to be home. You could eat whatever you wanted to, whenever you wanted to. Your friends could hang out forever and nobody would tell them it’s time for them to go home.

Maybe life on your own would be great, but it also would be super expensive. Let’s have a look at some of the expenses you incur when you’re supporting yourself. I’ll bet there are some costs you’ve never even thought about, such as:

These are only some of the many costs associated with living on your own. We haven’t even talked about food, entertainment, or clothing. Suffice to say it costs a lot—a whole lot—of money to live on your own.

There’s a very good reason that most teens live at home and depend on their parents to supply most of what they need. Most teens don’t have enough money to support themselves.

The years that you spend at home are prime time for saving money. If you’ve got a job, or even just get allowance, try to save a little bit of each pay. Even if it’s just a couple of dollars, it’ll add up. And, saving even a little shows that you’re in control of your money and thinking ahead. You’ll learn a lot more about saving in Part 3, “Smart Saving.”

Although you might be able to save a little, living at home doesn’t mean you don’t need money to spend. We’ve already discussed dozens of examples of teen money grabbers, and I’m sure you can think of dozens more. The amount of money you need depends on what you’re responsible for buying and how much stuff you want. Justin might be perfectly happy with only $10 a week to spend, whereas Jonathan is sure he can’t possibly get along with less than $50.

Katie works after school and buys all her own clothes, makeup, movie tickets, and so forth. Obviously, she needs more money than Jess, whose parents buy all her clothes and everything else. Although the amount of money needed varies from person to person, the need for money applies to everyone. Our society is money oriented and money driven, and you need it to be in the game.

The Least You Need to Know