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Nearly 2 million students will graduate with a bachelor’s degree in 2013, according to the National Association of College and Employers. But the vast majority will walk across the stage, grab their diplomas and enter the real world with little knowledge about personal finances. A 2013 study by Inceptia found nearly 90 percent of first-year college students scored a “C” in financial literacy, and with most colleges not requiring courses on managing finances the score is not guaranteed to get better.
A lack of financial literacy makes it difficult for graduates to manage those student loan debts, as well as any other financial developments that come their ways. Thankfully, there are options available to students to help them prepare for their future finances.
Strategies and Training
With 90 percent of college students ignorant about basic financial principles, it is no wonder many students and recent graduates find themselves deep in debt, feeling overwhelmed and frustrated.
Educators and university administrators are partnering with financial experts and business professionals to design financial literacy training classes. Campus workshops and loan applications that require demonstrating basic financial knowledge are becoming the norm today, as well, though students must seek them out themselves.
Preparing for Financial Literacy
For people who are already in trouble, and for those who want to avoid escalating debt, Decision Partners, Inc. has developed a series of online financial courses that offer information about budgeting, financing, paying for college and managing debt in general. Decision Partners’ Financial Literacy 101 is free to all college enrollees with a student access code, which is provided by the university once the school purchases unlimited use for $1,500 a year.
One activity that is incorporated into the training is recording and tracking income and expenses for a 30-day period. Gathering this information serves two vital purposes: to determine where the money is going and to help participants identify excessive spending patterns. This process also lays the groundwork for developing a budget.
Finding Savings in the Budget
Lowering expenses isn’t just about skipping the morning latte at the trendy coffee house and waiting until the newest Bluetooth headsets go on sale before buying one. There are numerous ways college students can reduce expenses.
Contact your bank or credit card company to request a lower interest rate. Rates are negotiable. Depending on the balance and payment history, a 15-minute phone call could save a significant amount of money.
Contact your cable company, Internet provider and all phone service providers to ask for student discounts. Some companies do not advertise reduced rate plans. Be persistent, and speak to a supervisor if the person you reach does not know about “bare minimum” plans.
Check with your local electric service to obtain rates for off-peak usage. Changing the time of the day that you do laundry, run the dish washer, and vacuum the floor could lower your electric bill.
Examine every bill for errors and extra charges. Some subscription services have renewal fees. Occasionally, a charge is double posted in error. Look for late fees. Paying bills on time each month eliminates late fees. Five dollars here and there adds up quickly.
Recovering from out-of-control debt and financial mismanagement is a long, often difficult process. Gaining financial training before a crisis develops is a wise strategy. Students who need help should contact their student advisor to discuss resources available on campus and in the community.
Have a resource related to student financial management you’d like to share? Leave it in the comments.