Why Financial Literacy is Important

fast food job

Gone are the days when you could work a summer job and pay your way through a university, that’s been known for some time.  Besides the rising costs of tuition, most college students have to find a way to cover their books, room and board, transportation and any other day-to-day expenses loans or scholarships might not cover.  

 

So how do we teach younger generations to grab their financial dependency by the purse strings and spend wisely without racking up major credit card debt?  

 

Why is Financial Literacy So Important?

There’s a specific temptation that comes with students venturing out of their parent’s house to a college dorm, especially if they attend a school hours outside of their permanent residency:  credit cards.  

 

While credit cards can be beneficial for immediate emergencies, students who attend and successfully complete financial literacy courses are more likely to stay out of major debt and spend their credit cards wisely.

 

cc student debt

 

 

 

Younger Generations Are Getting Better at Budgeting

 

While millennials tend to get a bad reputation for their spending habits, they’re actually on a better track when it comes to budgeting and understanding consumerism trends.  According to Standard Life Savings, “A survey, which compared the saving and spending habits of 1,038 boomers and 1,062 millennials, uncovered the surprising news that 8 in 10 millennials have a budget, compared with 61% of boomers, and the younger respondents were also more likely to be following their budget some, most, or all of the time.”  

 

But that still doesn’t account for the 15% of college students who make purchases using credit cards, knowing they can’t pay the monthly bill.





The Dangers of Not Repaying Debts

 

College students work now more than ever and most obtain their first job before graduating high school.  Making a paycheck without understanding responsible budgeting, spending, and saving can be a quick slide to financial trouble that can take years to recover.

 

Student loans and credit cards both can accrue fines and/or higher interest rates if not paid on time.  Collections agencies become responsible for acquiring the amount owed if the borrower stops payment, which is then added as a hit on the borrower’s credit score.

 

college student

American Eagle’s Partnership with SLU Billiken Athletics

 

American Eagle Credit Union introduced a financial literacy journey with Saint Louis University’s Billiken Athletics in a multi-year partnership, starting in 2016 with our Free Throws for Tuition program; donating $10 towards a continued financial literacy fund for every free throw made by the Men’s Billiken Basketball team during their conference games.  

 

Need Financial Advice?

If you aren’t sure if credit cards are right for you or you’re thinking about finding another loan to supplement the cost of college tuition, visit our Student Choice page or contact us.

 

How is your university or local credit union providing financial literacy for college students?  Tell us in the comment section below.


Thank you for your thoughts and comments on this blog topic. We welcome hearing from you. For your security, please do not to request transactions to your account in your comments. Additionally, do not include confidential information in your comments as this communication is not a secure channel for transmission.