The Need for Financial Literacy Among Young Adults
US has been facing its worst recession for the past few months. This should be treated as a reminder to all parents who are concerned about their child’s financial security in the years to come. Financial literacy should be taught to young adults by their parents. In fact making it a part of the school syllabus with all the nuances of financial management included would do well when they have to start college.
In the present day, college students are those who are relying more on their credit cards, compared to other segments that actively use them. Recently it has been found out that there is a steep 46% increase in the average amount of debt taken by college students, since 2004.
The sudden steep rise can be contributed to the possession of four or more credit cards per student. So, this leaves them with a large $7000 debt balance by the end of their college education. It has also been found that one-thirds of students rarely or never discussed credit card issues with parents.
There has been a new act formulated with regard to the usage of credit cards to save the current economy from slopping down further. The new Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 is primarily aimed at protecting college students and young adults, through the inclusion of a requirement that states that card issuers and universities disclose agreements with respect to the marketing or distribution of credit cards to students.
Although the new Act can help to reduce large debts, financial literacy is an important factor to be addressed now. It is highly vital for young adults to learn to build their credit without actually owning a credit card. There are many online personal money management software, that offer free registration, and is very simple to understand and use.
Budget planning softwarecan be used from early college days. This will help students to save and use the same finances to pay for their own education as well. Online tools provide young adults with features that will help them to visualize their earning and spending pattern; set realistic budget goals and also stick to the budget always. Personal money management sites also provide mobile alerts on purchases and monthly balances.