For the TimesDaily
Trent Cronin, a senior at the University of North Alabama, has made some of the mistakes a lot of college students make when it comes to money.
“When I started college, I had to learn the hard way how to budget my money, and, sometimes, I made mistakes with the amount I had in my account,” he said. “I'm still not an upper-level budget king, but I'm getting there.”
At 21, Cronin uses the lessons he's learned as an employee at The Hill, a branch of Listerhill Credit Union in the Guillot University Center on the UNA campus. Last fall, The Hill opened as a place where students can open accounts, check their finances or ask questions about money management.
Financial literacy is not a new concept, but many banks and financial institutions are hoping to make the idea attractive to 18- to 24-year-olds before they have a chance to make long-term mistakes that could affect their ability to get a mortgage, buy a car or get a job.
“Financial literacy for students is critical,” said Mackey McNeill, a certified public accountant, financial planner and member of the American Institute of CPAs.
If students are not prepared to handle the responsibility that comes with having money, they can fall prey to a number of pitfalls, she said, including debilitating credit card and student loan debt.
One way to avoid that is to begin the process of teaching children about money long before they leave for college, McNeill said.
“Our patterns about money are set before college, so if your kids are savers or spenders, you'll know before then; however, that doesn't mean you can't become better aware of the behavior and make difference choices,” she said. “Early on, get kids acclimated and give them practice.”
It's a lesson Alana Parker, the education and training director at First Metro Bank, puts to use in local schools through the Teach Children to Save program. It's designed for children as young as fourth grade to inspire them save money, a concept Parker admits is not popular among young people.
“Savings isn't where it should be, but it goes with the age group and being more worried about the right now and not their financial future,” she said. “What we want them to understand is that the first 10 years out of high school are the most important because it's when you're looking at buying a home, a new car, starting a new family, merging assets, and, if you've made a mistake in your first year of college because you didn't know about your credit, it's a big deal.”
Gradually, it seems, this age group is becoming more financially astute, McNeill said, helped along by some new federal regulations as well as the Great Recession.
“There have been changes in terms of credit cards and students loans that have been positive for students,” she said. “But the other thing is this Great Recession. Like those in the Great Depression, it left an imprint and changed the way they thought about money their whole lives. This recession has done the same things for these kids. They're permanently impacted by what happened, and I don't think that's a bad thing.”
It's certainly affected the way UNA junior Ian Love feels about money.
A steady income from a local fast food restaurant helps him keep track of his finances and spending, he said.
“It's not a lot, but it keeps me from blowing it all,” he said. “I think (I'm prepared) as far as money coming in and going out and knowing how to make (money) last. As far as adult things like investments and savings for retirement, I don't know much about that.”
Getting that grown-up education often takes a concerted effort on the part of parents and students, said Kristen Van Rensselaer, an economics and finance professor at UNA.
“We offer a personal finance course open to any level of student, and many take it as freshmen,” she said.
At the junior and senior levels of college, Van Rensselaer said students get the nuts and bolts of the financial world, such as how to calculate a car payment with interest, the definition of amortization and how to save for retirement.
Other students come to campus having taken those classes in high school, and that's where the information can be more meaningful, she said.
“Ideally, this would start in the home, and, if not there, in high school,” Van Rensselaer said. “Not all parents will have good financial habits to teach their kids.”
Macke Mauldin, president of Bank Independent, sees the children of his customers grow into bank customers themselves, and, to that end, he said parents, especially those with good financial habits, make the best teachers.
“The minor pitfalls I see come from not keeping up with their transactions, charging things at local stores and not understanding the future ramifications of today's actions,” Mauldin said.
Electronic programs, such as Quicken, as well as those operated through local banks, meet students where they are with their finances, he said.
“Technology like this really helps,” Mauldin said. “You have to go through it to see how it's going to work for you, but many students take full advantage of what's out there on their smartphones.”
Thanks to a personal finance class he took in high school, UNA freshman Mike McGee felt prepared for the financial challenges he'd face in college.
The lessons he learned in banking, credit unions, stocks and mutual funds helped him realize the importance of saving after graduation, he said.
“I'll buy just what I need and save the rest of it,” McGee said. “If there's something I want to buy, I'll save for it instead of getting a loan or a credit card.”
Without that basic financial literacy, Cronin said students miss the point of a college education.
“If you're financially illiterate, you're in for a world of hurt,” he said. “You've gone to school and gotten a degree, but, if you're financially illiterate, it nullifies that degree because you're not equipped to take care of yourself or your family.”
Writer Lucy Berry
At 21, Cronin uses the lessons he's learned as an employee at The Hill, a branch of Listerhill Credit Union in the Guillot University Center on the UNA campus. Last fall, The Hill opened as a place where students can open accounts, check their finances or ask questions about money management.
Financial literacy is not a new concept, but many banks and financial institutions are hoping to make the idea attractive to 18- to 24-year-olds before they have a chance to make long-term mistakes that could affect their ability to get a mortgage, buy a car or get a job.
“Financial literacy for students is critical,” said Mackey McNeill, a certified public accountant, financial planner and member of the American Institute of CPAs.
If students are not prepared to handle the responsibility that comes with having money, they can fall prey to a number of pitfalls, she said, including debilitating credit card and student loan debt.
One way to avoid that is to begin the process of teaching children about money long before they leave for college, McNeill said.
“Our patterns about money are set before college, so if your kids are savers or spenders, you'll know before then; however, that doesn't mean you can't become better aware of the behavior and make difference choices,” she said. “Early on, get kids acclimated and give them practice.”
It's a lesson Alana Parker, the education and training director at First Metro Bank, puts to use in local schools through the Teach Children to Save program. It's designed for children as young as fourth grade to inspire them save money, a concept Parker admits is not popular among young people.
“Savings isn't where it should be, but it goes with the age group and being more worried about the right now and not their financial future,” she said. “What we want them to understand is that the first 10 years out of high school are the most important because it's when you're looking at buying a home, a new car, starting a new family, merging assets, and, if you've made a mistake in your first year of college because you didn't know about your credit, it's a big deal.”
Gradually, it seems, this age group is becoming more financially astute, McNeill said, helped along by some new federal regulations as well as the Great Recession.
“There have been changes in terms of credit cards and students loans that have been positive for students,” she said. “But the other thing is this Great Recession. Like those in the Great Depression, it left an imprint and changed the way they thought about money their whole lives. This recession has done the same things for these kids. They're permanently impacted by what happened, and I don't think that's a bad thing.”
It's certainly affected the way UNA junior Ian Love feels about money.
A steady income from a local fast food restaurant helps him keep track of his finances and spending, he said.
“It's not a lot, but it keeps me from blowing it all,” he said. “I think (I'm prepared) as far as money coming in and going out and knowing how to make (money) last. As far as adult things like investments and savings for retirement, I don't know much about that.”
Getting that grown-up education often takes a concerted effort on the part of parents and students, said Kristen Van Rensselaer, an economics and finance professor at UNA.
“We offer a personal finance course open to any level of student, and many take it as freshmen,” she said.
At the junior and senior levels of college, Van Rensselaer said students get the nuts and bolts of the financial world, such as how to calculate a car payment with interest, the definition of amortization and how to save for retirement.
Other students come to campus having taken those classes in high school, and that's where the information can be more meaningful, she said.
“Ideally, this would start in the home, and, if not there, in high school,” Van Rensselaer said. “Not all parents will have good financial habits to teach their kids.”
Macke Mauldin, president of Bank Independent, sees the children of his customers grow into bank customers themselves, and, to that end, he said parents, especially those with good financial habits, make the best teachers.
“The minor pitfalls I see come from not keeping up with their transactions, charging things at local stores and not understanding the future ramifications of today's actions,” Mauldin said.
Electronic programs, such as Quicken, as well as those operated through local banks, meet students where they are with their finances, he said.
“Technology like this really helps,” Mauldin said. “You have to go through it to see how it's going to work for you, but many students take full advantage of what's out there on their smartphones.”
Thanks to a personal finance class he took in high school, UNA freshman Mike McGee felt prepared for the financial challenges he'd face in college.
The lessons he learned in banking, credit unions, stocks and mutual funds helped him realize the importance of saving after graduation, he said.
“I'll buy just what I need and save the rest of it,” McGee said. “If there's something I want to buy, I'll save for it instead of getting a loan or a credit card.”
Without that basic financial literacy, Cronin said students miss the point of a college education.
“If you're financially illiterate, you're in for a world of hurt,” he said. “You've gone to school and gotten a degree, but, if you're financially illiterate, it nullifies that degree because you're not equipped to take care of yourself or your family.”
Writer Lucy Berry
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