College Helping with Financial Literacy
Currently, financial literacy statistics in the United States are pretty bleak. Around half of American adults have less than $10,000 saved for retirement and over half of Americans also claim they have “no rainy day fund.” Student loan debt is over 1 trillion dollars and nearly 40 percent of millennials worry about the state of their finances at least once every week. This study discovered that millennials have the lowest financial literacy of any generation, at 24 percent. These statistics are particularly concerning as millennials begin leaving school and navigating numerous financial matters.
What one college is doing
One college, Louisiana State University, has taken on the challenge of teaching its students financial literacy. They offer a course known as Transit, which has been running for the last five years. LSU’s Cale P. & Katherine Smith Student Financial Management Center (SFMC) is responsible for Transit and helping students become financially literate. Freshmen complete the program sometime during their first year in order to better understand financial matters. Other colleges use a similar course with the goal of improving financial literacy as students begin making important financial decisions, such as paying rent, taking out student loans, and filing taxes, along with investing, opening and using credit cards, and making monthly payments for specific items and services. LSU also offers other financial literacy classes that are optional.
What are the benefits of financial literacy?
Once a person achieves financial literacy, it can greatly help him throughout his life. With financial literacy comes greater financial responsibility; you learn what a high interest rate is and how debt and loans work. Instead of taking out loans and swiping a card, you have a comprehensive understanding of how to avoid debt and also how to pay it off. Financially literate people are more likely to get themselves into negative financial situations with large amounts of debt. Becoming financially literate at a young age allows you to make wise decisions regarding your finances and successfully plan for your future, like with a retirement fund or investments. With financial literacy, you’ll also know how to craft a successful financial plan for your future and budget your expenses to avoid debt.