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Will Today's Teens Depend on Parents Forever?

Kimberly Palmer

Any parents anticipating greater cash flow for themselves after their children reach their 20s might be in for a surprise: Those children might still be looking for financial support long after they've passed the legal age of adulthood. According to a new survey from Junior Achievement USA and the Allstate Foundation, one in four teens say they will be in their mid-20s before they will be able to support themselves without parental assistance, an increase from 12 percent two years ago.

The financial crisis seems to have taken its toll on teenagers. Not only do they anticipate needing their parents' money for longer, but the percentage who say they don't know or aren't sure if they will be "financially better off than their parents" rose to 28 percent from 4 percent in 2011. Still, the majority of respondents (65 percent) said they expect to be either as well off or better off than their parents or guardians.

That echoes other findings that show more 20-somethings moving back home with their parents. According to the Network on Transitions to Adulthood, based out of the University of Pennsylvania, the number of 20-somethings living at home has increased by 50 percent since the 1970s. That increase is tied to a 19 percent uptick in parents' shared housing costs.

The new findings raise a question: Why, if teenagers expect to be better off than their parents, do they still plan to rely on them for financial support? Does today's so-called "helicopter parenting" breed dependency? Or is the high cost of college so daunting that teens think they'll need help paying back loans, even if they anticipate good jobs one day?

[Read: Is Gen Y a Lost Generation?]

At least part of the explanation seems rooted in a lack of financial literacy, and more specifically, a lack of comfort with basic money management. According to the survey, 23 percent of teens aren't sure they know how to budget, 20 percent aren't sure they can use credit cards, and 34 percent aren't sure they know how to invest money.

Fortunately, this problem is widely recognized and many organizations, including Junior Achievement USA and the Allstate Foundation, offer resources to help parents teach kids about money. The Junior Achievement website offers a series of lesson plans for parents with kids of all different ages, from elementary school through high school. The interactive activities help families talk about money and impart lessons on budgeting, identify theft and work.

Here are a few more ideas on how parents can teach kids about money:

[Read: Why Gen Y Is So Financially Frustrated.]

Encourage savings. Financial literacy research suggests that children learn by example, so parents can explain how they save and even share their process for big financial decisions like buying a car. Simple choices at the grocery store over the size and brand of different products also offer opportunities to discuss comparison shopping.

Save for college. The Junior Achievement and Allstate Foundation survey found that most teens think students borrow too much for college and that two in three have talked about paying for college with their parents. Still, almost half of respondents said they don't know or aren't sure about how much they'll have to borrow to fund their education. Parents can help teens sort it out by starting college savings accounts early and explaining to their teens what they're doing.

Offer to brainstorm with them about their goals. Talking about big goals like traveling can help convince teens that saving money is a valuable pursuit because it will help them reach those goals. It also offers some useful parent-teen bonding time.

[Read: 50 Ways to Improve Your Finances.]

Help demystify the world of investing. Index funds, the Dow, target-date funds ... the world of investing can be confusing and intimidating. Parents unfamiliar with the terms themselves can read up on the markets and then chat about it with their kids. The sooner teens start saving, the better, since they have compound interest on their side. Plus, starting early with first paychecks from summer jobs can help establish a lifetime saving habit.

Helping teens be more financially literate might also help them get on their own feet earlier and less likely to rely on parents' handouts into their mid-20s. And that would be welcome news for both teens and their parents.

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