Financial Literacy: 5 Most Important Lessons for College Students

Financial Literacy: 5 Most Important Lessons for College Students
  • Opening Intro -

    We all are part of post-economic crunch times.

    The financial meltdown of major banks last decade has had its effects on people from all walks of life - including college students.

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We all are part of post-economic crunch times. The financial meltdown of major banks last decade has had its effects on people from all walks of life – including college students. Many states have cut educational funding, making it even more difficult for students to pay for college.

This troubling situation has had serious repercussions over the past few years, and many students and recent graduates are having difficulty covering their expenses. The situation is getting graver as educational costs continue to skyrocket, leaving many college students with massive debt loads which they will likely endure for 10 years or more.

Because of little or no financial literacy, college students often do not understand what they are getting into when applying for a financial aid. According to inquiries made by the U.S. Consumer Financial Protection Bureau, there is over $1.2 trillion in student loan debt – and fewer than half of these loans are in repayment. While a significant number of Direct Loan recipients are still in college, there are quite a few cases of non-payments including forbearance, deferment, and default.

Below are five of the most important areas where college students require financial literacy to help them improve their financial habits and make more-informed financial decisions:

1. Make an Informed Choice

Students need to be able to make an informed choice. They need the right guidance since these debts can stay with them for a long time after they’re done with their education.

2. Be Educated on Income Taxes

Students need to be educated on how to fill the basic tax forms and file for themselves, in addition to knowing how the system works so they can proactively make better decisions which will help them during tax season.

3. Build an Emergency Savings

One big mistake that many college students make is not building emergency savings. Emergency savings should be a top priority, and can be built relatively quickly by avoiding unnecessary purchases. Instead of purchasing cars on their own, college students should be encouraged to understand their financial constraints and make smarter choices.

4. Understand Credit Card Usage

If used wisely, credit cards can be very beneficial. They provide the comfort of cash at hand and also help build your credit score. However, if over-used, they can seriously ruin your life (and your credit score for that matter). All students should be educated on credit card solicitations.

5. Choose the Right Career

While some may not consider this as tied directly to financial literacy, many college students make an uninformed decision when they select their academic program. This wastes their money as well as the precious time that they invested in the previous program. Students should be counseled on how to decide the right career path which goes parallel with their aspirations.

Financial literacy courses should be taught at all colleges. While it might be only to assist some of the students to step out of poverty, it surely helps all of them be mature and enter adulthood.

For additional resources for financial aid, careers & personal finance please visit http://www.iGrad.com.

 
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Categories: Money Tips