Going away to college is the first time many teens are responsible for managing their own finances. With the new-found responsibility comes the potential for taking on too much credit card debt and other financial mistakes that can have lasting effects.
According to First Command Financial Services, 75 percent of financial advisers in a recent survey said that lacking a budget and accumulating credit card debt are two of the biggest financial mistakes students make.
To help avoid common pitfalls faced by college students, First Command recommends that parents start talking about money before their child leaves for college and teaching the importance of saving.
“The economic downturn has been a wake-up call for many Americans, and they are making meaningful, long-term changes in their household finances,” says First Command executive vice president Terri Kallsen. “People are saving more and spending less, reflecting a new-found appreciation for responsible financial behaviors.”
A study by Sallie Mae found that students who never or rarely talked about money were more likely to accumulate credit card debt and were more likely surprised at their monthly balance compared to students who talked financial practices with their parents.