Financial Education for College Students: 3 Reasons Why It’s Important
When you send your student off to college, it is important that he or she has a good financial foundation. Financial education for college students gives them the ability to properly make important decisions based on their finances. College is often the first time that a budding adult has to make daily financial decisions, and it’s absolutely essential that they feel prepared.
Why is financial literacy important for college students? Because college is often the first time these students are on their own. They may have to save money for food, entertainment, and school-related expenses. Without guidance, choosing the wrong financial path can lead to prolonging life goals such as owning a home or starting a family. Financial education for college students encourages family conversations, hands-on learning opportunities, and financial independence.
1. Creates Multi-Generational Conversations
Consistently starting money-focused conversations with your college students can not only help them keep their budgets in check but can also help you proactively meet needs that may arise.
It is very difficult to teach your child about financial literacy if you are currently struggling with it yourself. According to the National Foundation for Credit Counseling®’s (NFCC®) 2019 Consumer Financial Literacy Survey, 60% of U.S. adults have had credit card debt in the past 12 months, and nearly 2 in 5 (37%) carry credit card debt from month to month.
If you want your child to succeed financially, you will need to get a handle on your own finances as well. The first step in managing your money is to create a budget. The majority of us have more “wants” than we can truly afford. This has become more apparent since credit cards were introduced.
Once a budget has been established by balancing your income with your expenses, begin eliminating any debt that is weighing down your monthly budget.
Working to eliminate debt can be a long process but it is worth the effort. After the debt is under control, you can save money for emergencies and long-term goals.
A consistent relationship with a financial advisor is recommended for accountability. Involving your college student in this meeting will hone his or her financial skills and increase the likelihood that he or she will seek a financial advisor later in life.
2. College Financial Literacy Programs Provide Essential Life Skills
The financial education for college students that EVERFI provides can take your student from comfort with simple money exchanges to the confidence to become financially independent. Our software provides interactive real-world scenarios suited for student life today. Teachers and administrators can use the standards-based curriculum and instant reports to accurately track each student’s progress.
The financial education for college students that EVERFI provides includes interactive curriculum, a scalable platform, and in-person resources that give financial capability access from grade school through retirement. The culmination of these financial literacy programs will lead to increased financial literacy among college students.
3. Financial Planning for College Students Enables Financial Independence
Your college student is unlikely to be carrying a mortgage or providing for a family; however, the earlier we can prepare your student for real-world scenarios the better.
Financial independence can be difficult to achieve for college students, parents, and even financial institutions that struggle to provide the right resources.
EVERFI partners with financial institutions to improve the relationship between potential and existing financial customers. The better the two can work together, the more beneficial the financial institution will be to the community. The more personalized financial planning for college students the institution can provide, the more confidence customers or students will have in their financial institution.
Financial education for college students should start long before filling out a college application or understanding the FASFA. The sooner you can educate your student, the greater the chance he or she has for long-term financial success.