Kids these days ...

They can Google Shakespeare, watch live Senate action on C-SPAN, cart around entire CD collections in the back pockets of their low-rise, vintage-wash jeans, and get corporate America to cater to their every whim.

Kids these days are more tuned in, tricked out, and economically influential than any generation before them.

Frankly, kids these days don't know how bad they have it.

Today's kids have the world at their fingertips, yet they face financial disaster at every turn. Those who aren't trotting off to college with credit cards they've had since junior high will find Visa and MasterCard applications conveniently stuffed inside their student union shopping bags. By the time they graduate, the average co-ed has $3,000 in credit card debt and will owe Sallie Mae and her ilk more than three times that in student loans. When handed the 401(k) paperwork at their first jobs, fewer than 20% of workers age 21 to 24 choose to sock away even one dime in their work retirement plans -- even when their employers offer to match their contributions.

Here's the real kicker: The under-25 crowd has the fastest-growing rate of bankruptcy in America.

Surprised? We shouldn't be. Kids these days are just chips off us old blocks.

  • As a nation, we're borrowing money at a record clip to pay for a lifestyle well beyond our means. According to the Federal Reserve, two out of five families spend more than they earn.
  • Twenty percent of credit cards are maxed out, and the average household pays $1,000 in interest every year.
  • Forty-two percent of workers cash out their 401(k)s rather than transfer (or "roll over") the assets to an IRA or a new employer's retirement plan.
  • The Commerce Department reports that our personal savings rate is a wafer-thin 1.8%.
  • At the end of last year, U.S. households had $10.4 trillion in outstanding debt, and one out of every 73 filed for bankruptcy.

When the National Council of Economic Education recently quizzed high school students on their knowledge of personal finance, the average score was a 53. How is it that a generation savvy in so many ways is so bad with money?

Temptation island
Don't tsk-tsk today's youth for not hitting the books: Only half of high school students have been taught economics in school, and even then, the lessons don't come until 12th grade. Yet well before then, the forces of financial evil are working to part young people from their cash.

Today's kids are being wooed in ways we adults never were. I had Duran Duran and Timothy Hutton posters on my bedroom wall. Today's kids have Hilary Duff and Usher debit cards in their wallets. I had to beg my parents for a cinder block of a rotary telephone with my own number. Today about a third of kids ages 11 to 17 have a cell phone.

Used responsibly, these tools offer an important safety net (and in the case of credit cards, help young people build that all-important credit record).

But responsible use isn't what lenders have in mind when they put Spider-Man on a credit card and enclose "convenience cheques" to help kids kick back on spring break. Restraint isn't what mobile phone service providers want when they roll out new ring tones and text-message options.

Most service providers bank on kids not questioning costs. But if that attitude continues into adulthood, tomorrow's adults are going to be asking, "Dude, where's my retirement?"

Ah, youth
Kids these days need to cop a money attitude. When lenders offer them borrowing power beyond their means and marketers of everything from computers to couches say "buy now, pay later!" just say no.

Kids these days should question their elders when the debate about Social Security reform rears its head.

Kids these days need to be their own advocates to make sure anyone offering financial help really has their best interests at heart.

Kids these days can still live in the moment while they forge their financial future We've all read the examples and mourned our lost youth. A 25-year-old investing $200 each month for just 10 years will have $402,797 in her retirement kitty by age 65 (assuming an annual 8% return). If a 35-year-old were to invest $200 each month until age 65 -- that's two decades longer than the doe-eyed quarter-lifer in the next cubicle -- she ends up with a little more than $300,000 (minus whatever she spent on Botox for those retirement-savings worry wrinkles).

Kids these days don't know how good they could have it.

More kidding around:

Dayana Yochim owns none of the companies mentioned in this article, as revealed in her Teen Beat personal Fool profile. Dude, here's the Fool'sdisclosure policy.