Increase your Students' Financial IQ

Help your students and their parents develop smart spending habits

By: Hon. John C. Ninfo II 

“We lose more students to credit card debt than to academic failure,” an Indiana University administrator admitted in a May 2006 report by CQ Researcher on teen spending.
 
Addressing this same problem in December 2004, Dr. Robert Manning, a professor at the Rochester Institute of Technology and the author of Credit Card Nation, stated that, “Odds are [that] between 7 and 10 percent of college students will drop out because of consumer debt issues.”

As a school counselor, much of your time is devoted to helping students find and be accepted at a college that is a good fit for them.  

This is the focus for many juniors, seniors and their parents, and they frequently look to you for guidance in every aspect of the college process. As a result, you are in a unique position to emphasize that students are not only academically prepared for college, but also financially prepared.

As the founder of the Credit Abuse Resistance Education (CARE) Program (careprogram.us), I must inform you that too many young people don’t get personal finance education.

As a chief United States bankruptcy judge who has presided over more than 65,000 cases, I can also tell you that bankruptcy filings among young people between 18 and 24 years of age continue to be a major problem.

Every day, those of us involved in financial literacy education hear stories of young people who, because of their naive abuse of consumer credit and its negative effect on their credit scores, lose out on jobs, apartments, student loans, admission to graduate schools, car loans and other consequences.

Here are some things that you can do to help your students prepare financially for college and life:

Promote effective personal finance education
You would be shocked at what students don’t know about things like credit cards, credit terms, compound interest and fees. Even if your school does have a financial literacy program, if there is a local CARE Program in your area (check at careprogram.us), you could encourage your school to schedule a CARE presentation for your juniors and seniors. CARE makes bankruptcy professionals available to high schools and colleges in 32 states and D.C. to make presentations that raise students’ financial IQs and help them avoid unnecessary consumer debt.
Suggest a visit to the CARE Program Web site
Encourage your students and their parents to visit the CARE Web site. There, they can increase their financial IQ by reviewing handouts, videos and personal finance articles, including a series of articles from The Next Step Magazine. The Web site also has links to other helpful financial Web sites and books.

Encourage students and parents to work together to create a college budget
Sixty-eight percent of students say they never really spoke with their parents in any detail about finances, and few college students say they worked with their parents to create a college budget.

On the CARE Program Web site, you will find a handout, “Creating a Realistic College Budget That You Can Stick to.” Print off copies for your students—then encourage them to go home and work through it with their parents.

Provide your students with important financial tips
Also online is CARE’s “Top 10 Financial Tips for High School and College Students.” This is a set of important lessons, tactics and techniques that you can encourage your students to read and keep in their college folders.

It includes tips such as the importance of having savings for emergencies, looking for little ways to save money, avoiding credit card debt, using cash and avoiding trying to “keep up” with wealthier students.

Send this article to the parents of your juniors and seniors
What difference will it make? If you don’t help your students increase their financial IQ, you may find that even your academically accomplished students may have trouble in and after college. You are in the perfect position to help make sure this doesn’t happen.
 
I hope you will take up the challenge and promote personal finance education in your school district.