Study finds that college students lack basic info on managing their finances
Posted March 17, 2019 9:56 a.m. EDT
Updated March 17, 2019 1:36 p.m. EDT
April is Financial Literacy for Youth month, yet a majority of college students are unable to pass a basic financial literacy quiz.
A study conducted at George Washington University found that less than 25 percent of students demonstrated basic financial knowledge on topics that range from inflation to risk diversification.
Anna Worley, an online graduate student, is trying her best to prepare for the inevitable student loans that are looming.
“I was able to pay back small portions of the loans, which was helpful, until you accumulate more,” she said.
Worley recently had a conversation with her parents about how she lacks answers about how to accurately manage her finances.
“It wasn’t an informational thing," she said. "It was more of a ‘our generation doesn’t really plan for things like this.’”
While some parents encourage their children to learn on their own, other parents offer a more hands-on approach.
Samer Issa, a freshman at North Carolina State University, explains how his parents have helped him prepare for retirement and properly save his money. Issa says, “They pretty much nailed it in terms of how they track their spending and they’re constantly advising me.”
Issa was the only student polled that got all of the financial literacy questions correct.
“I think just to understand how you’re handling your money and your expenses and to do it responsibly," she said. "I think a lot of people tend to forget that eventually it will bite you in the butt if you don’t take care of it now.”
Increasing your financial literacy is a commitment, but experts say it is imperative to start as soon as possible.
According to the Forbes Financial Council, it's imperative to:
- Take online courses in financial management.
- Keep track of your expenses.
- Investigate passive income opportunities.
- Understand the impact of your credit score.
- Talk to a trusted mentor.
- Track all expenses to get your whole financial picture
- Start saving money
Experts say it is important to start saving as soon as possible so that investments will accumulate over time. The sooner students begin to invest, the sooner they can reap the benefits.