College News
6 Surprisingly Common Student Money Misconceptions
(BPT) - From sports teams and extracurricular
clubs to first jobs and first cars, high school
students learn new lessons every day, many away
from the classroom. But when it comes to
balancing their obligations, many students learn
some tough lessons for the first time as they dip
their feet into adult life, particularly with their
finances.
"Only 7 percent of high school students are
financially literate and fewer than 30 percent of
adults report being offered financial education at
school or college," said Brian Page, finance
teacher and personal finance adviser to H&R
Block Budget Challenge. "Personal finance can be
an overwhelming subject to learn, so many
students have developed money misconceptions."
According to Page, many students share these six
common misconceptions when it comes to money:
1. A person can save what is left over at the end of
the month. Those who save by making automatic
savings deposits right from their paycheck save
four times more than those who only deposit
directly into one account, according to CFED.org.
2. College is unaffordable. Most teens are well
aware of the surge in college costs. However,
many teens don't realize that, by comparison
shopping, seeking financial aid and looking at
alternative pathways to earning a degree, college
costs can be more manageable.
3. All debt is bad. "Borrowing now to improve your
future self can be a good idea," Page said.
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"Student loans not exceeding your first year's
anticipated income makes sense for most
everyday Americans." To find information on
anticipated salary, check out PayScale.com.
4. Overdraft protection is free to use. This couldn't
be further from the truth. The Consumer Financial
Protection Bureau found the typical overdraft
situation is comparable to a small-dollar loan with
a 17,000 percent interest rate.
5. I don't need to budget right now. Teens annually
spend nearly $100 billion, reports the University of
Illinois. Yet only 17 percent of teens maintain a
budget, states an H&R Block survey. Budgeting is
important now as small expenses can add up and
get you into trouble - for example, the average
American spends more than $2,500 a year dining
out, according to the Bureau of Labor Statistics.
Properly monitoring your spending habits can help
avoid overspending.
6. Never use credit cards. It depends. "If you're
unable to control credit card spending, steer
clear," Page said. "However, they can be ideal
credit building tools for young consumers who use
them responsibly." Consider starting with a
secured cred