Universities prepare students for money management
For college students, learning the basics of credit card and money management early can help them avoid major financial trouble in the future.
Area universities are working to teach students basic budgeting information, how credit cards and credit scores work, how loans work and why having money in savings is important.
Bobby Clark, the senior vice president of Worthington National Bank, works with the University of Texas at Arlington during fall semesters where he and others teach basic lessons on credit.
“Statistically, college students, when they leave college, they’ve got an average of at least $5,000 in credit card debt,” Clark said. “Often times they’re out charging pizzas and spending money with credit cards that accumulates a balance. They may think it’s free money when it’s not. We want them to understand that the choices they make with their first credit cards can impact them for life.”
Students are bombarded with credit card offers from the time they get out of high school until after they graduate from college, Clark said. Sometimes, credit companies use what are considered predatory practices to tempt students into applying for credit cards such as offering freebies such as food and T-shirts.
College students “are vulnerable just because they maybe don’t understand all the ramifications and responsibilities that go with credit, and if you’re out in a fun setting and there’s an offer there, something for free, well that’s pretty tempting,” Clark said. “Reaching out to them at this point in time, we can help them see some things.”
Clark breaks down information into 10 tips for students to remember: Students should take responsibility of their finances, watch their spending and understand the difference in needs and wants, understand the responsibilities and benefits of credit and credit card balances, get a bank account and make use of the services banks offer, apply for scholarships and take advantage of student discounts, buy used textbooks or order textbooks online, limit “hanging out” expenses, don’t take financial advice from just anyone, save money and ask for help and advice.
These same points are reiterated in Texas Christian UniversityÂ’s First Year Experience program. The 10-week program is designed to acclimate new students to college life and includes a course on how to handle finances.
“We have a group of about 20 first-year students led by two upper class students and a faculty member, and for that week they work on fiscal responsibility,” said Carrie Zimmerman, director of First Year Experience. “They start with a financial management game. Every student drew out of a hat what their monthly salary or stipend was, and the goal at the end of the game was to have money let over to put into savings or to just be in the black. At the end of the game there were things they had to purchase, or say their car broke down or their computer needed to be fixed, and this taught them the importance of planning ahead for unexpected events that come up and why you need money in savings.”
At the University of North Texas, students are exposed to financial information through the schoolÂ’s money management center.
The center opened in October of 2005, just after the schoolÂ’s administration put restrictions on predatory credit lending and marketing practices on campus, said Paul F. Goebel, director of the money management center.
The center hosts 30 to 40 workshops per semester, the most popular ones being on budgeting, credit cards and credit reports, he said.
This semester, the center launched a student-to-student counseling service for those who feel more comfortable speaking to other students about their financial problems instead of professors or parents, Goebel said.
While universities can help students manage financial problems, parents should begin teaching their children about money before they go into college and help their children avoid major problems in the future, Goebel said.
