While college graduates may be leaving the commencement stage with a degree in hand, not all of their past and future will be marked by good grades. Economists are finding that financial literacy in this country is low, and part of the reason young adults today are saddled with high debt burdens.
There have been several studies conducted in recent years, all of which indicate that the majority of college students don’t understand some of the most important concepts in finance. Budgeting and expense tracking is a rare habits among those under 30, not to mention more graduates are relying on lines of credit to cover some expenses. Nearly one third of students fall behind on their debt bills before even graduating, and many more succumb to student loan debt default not long after leaving college. Poor money management strategies and a lack of finance basic knowledge is leading many down a dark path.
Turning F’s into A’s
One of the biggest ways to avoid the ‘F’ grade altogether is to get educated. Parents, teach your kids finance fundamentals early. Focus on teaching the importance of budgeting, saving and spending only what you have or can afford. College students, don’t rely on credit. If you are having trouble covering the costs of tuition or bills each month consider taking fewer classes and picking up more hours at work. Do an exhaustive search every semester for grants and scholarships that can reduce your need to take out more student loans. Practice making your student loan debt payments before you graduate, you’ll be surprised how much more prepared you will be when those payment statements start to roll in.