African American Teens Spending Habits May Harm Their Future Purchasing and Borrowing Power

Teens consumer behavior prompts local mortgage broker to hit the road for a series of seminars entitled 'Hood Rich or Just Plain Rich'

(PRWEB) September 21, 2003

Cincinnati, OH- African American teens are spending their money on trendy items that are based more so on their desire to build short-term self-esteem, rather than items that will bring them long-term prosperity. This pattern of spending behavior may eventually cause this generation to ultimately lose their purchasing and borrowing power because of frivolous spending.

Within the past 5 years, advertisers have increasingly become aware of the purchasing power of not only minorities, but, African American teens in particular. Linda Spear, president of Motion Financial II, an African American mortgage broker firm, stated that, usually the products that are targeted to them are far beyond their financial means. Our teens see their favorite celebrities endorsing an expensive and usually depreciative product, then feel if they dont have it, they will be looked down upon by their peers and this is wrong,” she said. Its this type of consumer behavior and thinking that will cause negative long-term affects on their future ability to purchase high price ticket items and investment property because no one is showing them otherwise. When African American teens become adults, they continue to place themselves in debt to trendy overpriced items that creates a false sense of self-worth, because this is the pattern that they have established over the years.

Tara Smith, president of T.M. Smith & Associates, a local African American market research and consulting firm agrees. She said that despite the economy and decline in advertising spending since 2001, the one thing that has remained steady is advertising to the urban” markets. Ms Smith stated that studies have shown that African American teenagers spend 6% more per month or $5136 per year, than the average U.S. teen Our teens are more likely to buy high-end priced clothing, jewelry, and athletic footwear, which makes up the extra 6% , whereas if they shopped at discount stores, their spending would equal the national average. African American teens are trendsetters and the unfortunate side of trends, is that because they are typically short-term and name brand driven, prices tend to be higher,” she said. African American teenagers is a hot target market because 1) they have disposable income, and 2) they have major influence in mainstream markets, particularly in the music, sports, and fashion markets. Ms. Smith stated that the reason why trends for African American teenagers are so short-lived is because once the trend has crossed-over to mainstream, African American teens no longer find the trend to be hip”.

Because of the devastating affects of these spending behaviors, this has prompted Linda Spear to spread the word to African American teens. No one is teaching our teens to spend wisely. And in a lot of cases, these teens are picking up their spending habits from their parents,” she said. I have seen people come into my office, ready to close on a loan, only to find out that they have purchased a brand new Lexus, which increases their debt to income ratio. They have created this huge, unnecessary bill, for something thats going to depreciate. Therefore, their chances of purchasing a home, which will appreciate and possibly generate income, just went out the door, all for the sake of looking good.”

Ms. Spear stated that it's times to change our teens thinking and spending habits so that they will learn to make smart purchasing decisions during their adulthood. In October 2003, she will kick off her Hood Rich or Just Plain Rich?” regional tour. The goal of the seminar is to educate teens about smart purchases and not so smart purchases. She will also explore how credit drives their purchasing and borrowing power. Its extremely important to catch our youth before its too late. There will be a point in time when they are ready to purchase their first home, or nice car, only to find out they cant because of bad credit from poor spending behavior, ”she said. Our teenagers can have all the things they want, but they must learn too, theres a right way and a wrong way to do it and we have been taught for so long, the wrong way. They must also slow down and be patient.”

Ms. Spear is president of Motion Financial II, mortgage broker firm. If you are interested in having Ms. Spear to speak to your youth group or organization, she may be reached at (513) 841-0585 or you may email her at Linda@MotionFinancialii.com.
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