Students Give Themselves a C in Money Management
High school and college students feel confident they understand the financial basics, but they give themselves a C in money management, according to U.S. Bank’s 2016 Student and Personal Finance Study.
The study found students feel knowledgeable about checking and savings accounts (42%) and saving in general (39%). However, they have a number of misunderstandings about credit. Many (54%) incorrectly believe that having too many cards can negatively impact their score, and 44% incorrectly believe using checks and debit cards will help their credit. Only 46% have checked their credit scores.
“This is the second year we have checked in with students to see how financially literate they are,” said Robyn Gilson, U.S. Bank Coach for Student Financial Education. “What we found is that students continue to know the basics like budgeting and savings–but when the conversation shifts to credit and investing, the grades drop. We want students to know it’s not too early to understand credit or how to make solid financial investments for their futures. It’s so important to start young.”
The survey included students 18 to 30 and found:
- Students seem to lack knowledge about investing (15%) and saving for retirement (11%).
- They are getting better at managing daily expenses. Last year, 67% reported difficulty managing their day-to-day expenses, but only 60% reported that issue this year.
- Male students feel more confident they can reach their financial goals. Men call themselves “savers,” while women say they are “spenders” and are “not at all prepared” to meet their financial goals.
- Students think “happiness” (72%) and health (66%) are the best ways to measure success in life. They consider home ownership (35%) and a high income (23%) much less important.
- Even though young people are hyper-connected and tech-savvy, they are not great at protecting their identity. 57% keep their passwords secret, but 22% are using passwords that are easy to remember, and only 27% change them regularly. Only 45% monitor their credit card accounts for fraudulent activity, and 41% verify a business before sharing personal or financial information with them.
“College is a good time to get your first credit card because establishing a strong credit history can set you up to get a loan for a major purchase–like a car–on your own once you start working, instead of relying on a parent to co-sign,” said Gilson. “We recommend using your credit card responsibly by paying for bills and everyday expenses–without overspending–and then paying off the balance in full on time each month.”