Financial Literacy for Youngsters - A Must in Economic Downturn
Today US is facing its worst recession in three decades, which should be a reminder to responsible parents that it is highly important to teach financial literacy to young adults in the family. In fact it would be a highly appreciable if it was included as a school syllabus and children were taught the nuances of financial management at an early age.
In the present day, college students are those who are relying more on their credit cards, compared to other segments that actively use them. Recently it has been found out that there is a steep 46% increase in the average amount of debt taken by college students, since 2004.
The primary reason for this sudden steep rise is due to the possession of four or more credit cards by a student. This leaves them with a huge $7000 balance by the end of their college year. The pity is that one-third of students rarely or never discussed credit card issues or usage with parents and do not care to learn to the nuances of using one.
The new Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, should mark a new turning point for American consumers, especially young people at universities. The act is primarily aimed at protecting college students and young adults, through the inclusion of a requirement that states that card issuers and universities disclose agreements with respect to the marketing or distribution of credit cards to students.
While the new Act can work in favor of those with huge debts, financial literacy is the key to make a universal impact on todays youngsters. It is important for young adults to learn how to build their credit without actually having a credit card. There are online personal money management softwarewhich is very simple to understand and use.
It is important for all college students to start using budget planning softwarefrom their early college days in order to help them save and then use the finances to pay for their college education. They can use online tools that will help them to visualize the earning-spending patterns and set realistic and achievable budget goals. These sites also provide instant mobile alerts on monthly purchases and current balances.
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