Most Col­lege Stu­dents Man­age Money Re­spon­si­bly

Calhoun Times - - CLASSIFIEDS -

(StatePoint) Con­ven­tional wis­dom says young peo­ple have a lot to learn when it comes to man­ag­ing money, but the re­al­ity is most Amer­i­can col­lege stu­dents are han­dling their fi­nances care­fully and con­sci­en­tiously, ac­cord­ing to “Ma­jor­ing in Money: How Amer­i­can Col­lege Stu­dents Man­age Their Fi­nances,” a new na­tional study from Sal­lie Mae and Ip­sos, an in­de­pen­dent global mar­ket re­search com­pany.

Tak­ing the Steps

Stu­dents are tak­ing the right steps when it comes to man­ag­ing money, the study re­vealed. More than three-fourths of col­lege stu­dents pay bills on time, and six in 10 never spend more money than they have avail­able. In ad­di­tion, col­lege stu­dents are putting money aside each month. More than half save at least some money ev­ery month, and 24 per­cent re­port hav­ing an emer­gency fund. Re­spon­si­ble Credit While most col­lege stu­dents make pur­chases with debit cards and cash, more than half have at least one credit card. Roughly six in 10 stu­dents re­port their pri­mary rea­son for get­ting a credit card was to build a credit his­tory.

The re­port also finds that the ma­jor­ity of stu­dents with credit cards are us­ing them re­spon­si­bly and pay­ing the bill them­selves. Specif­i­cally, 63 per­cent pay the bal­ance in full each month, and 73 per­cent pay the bill with­out as­sis­tance from a par­ent or other adult. Roughly seven in 10 re­port an av­er­age monthly bal­ance of $500 or less.

“Hav­ing a credit card doesn’t nec­es­sar­ily mean stu­dents are over­spend­ing,” said Ju­lia Clark, se­nior vice pres­i­dent, Ip­sos Pub­lic Af­fairs. “The re­al­ity is they are demon­strat­ing sound rea­son- Right ing and thought­ful de­ci­sion-mak­ing, and they are man­ag­ing their pay­ments ef­fec­tively.”

Un­der­stand­ing Good Credit

The ma­jor­ity of col­lege stu­dents know hav­ing a good credit record can help them qual­ify for dif­fer­ent types of credit and im­prove their ac­cess to fa­vor­able in­ter­est rates; and the ma­jor­ity of stu­dents un­der­stand what pos­i­tive and neg­a­tive credit be­hav­iors are.

“Many of these young peo­ple grew up in the wake of a fi­nan­cial cri­sis and, in turn, have adopted be­hav­iors that pro­mote sound credit man­age­ment,” said Ray­mond J. Quin­lan, chair­man and CEO, Sal­lie Mae. “At the same time, they’re ea­ger to learn more.”

The re­port also re­vealed that col­lege stu­dents would ben­e­fit from ad­di­tional ed­u­ca­tion about spe­cific credit top­ics, in­clud­ing how in­ter- est ac­cu­mu­lates and how re­pay­ment be­hav­ior and credit terms af­fect the cost of credit over time. In fact, when asked to an­swer mul­ti­ple choice ques­tions on those top­ics, only 31 per­cent of stu­dents an­swered all three ques­tions cor­rectly.

Free ed­u­ca­tional tools and re­sources, as well as a free guide to credit hand­book and free quar­terly ac­cess to FICO scores, can help stu­dents im­prove their fi­nan­cial lit­er­acy. To ac­cess these re­sources, visit Sal­lieMae.com.

For the com­plete re­port, visit Sal­lieMae. com/ Ma­joring­inMoney. Join the con­ver­sa­tion us­ing #Ma­joring­inMoney.

De­spite pop­u­lar per­cep­tions about col­lege stu­dents, many young schol­ars are act­ing re­spon­si­bly with their fi­nances, paving the way for suc­cess­ful fi­nan­cial fu­tures.

STATE POINT / Spe­cial

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