The fact that a large percentage of college graduates are split between looking for gainful employment and bankruptcy help at the same time is a sad reflection on today?s state of affairs. An economic environment that is unable to provide good employment opportunities is partly to blame for this situation, coupled with the huge amount of student loan and credit card debt students accumulate because of the prohibitive costs of their stay in academia.
The Importance of Financial Skills
Knowing how to make the right decisions regarding one?s finances allows the individual to attain financial security. In the case of the college student, financial literacy may comprise the ability to prioritize expenditures such as tuition fees, school materials, and other related costs without accumulating too much student loan or credit card debt. Student loans and credit cards, in the hands of the financially literate individual, are great additions to one?s money management tools, but these same tools can contribute to financial ruin if they?re used by a reckless spender.
Instilling the right practices and mindset involving money management allows your child to make better decisions, such as making some necessary purchases with a credit card or taking a student loan that he or she is sure to be able to pay. You can start teaching your kid lessons involving money by giving him a loan when he needs one, as long as it?s not a handout and he?s obliged to pay. You can also have your bank issue your child a debit card to be used without frequent overdrafts, or a credit card that has a relatively low credit limit ? these will help your kid practice sound money management and ensure that his debt doesn?t go too far. It?s never too late to teach your kid the basics of sound money management.
Will Work for School
Getting a job can help your child understand and internalize the financial lessons you wish to teach him by giving him a better idea of the value of money and hard work. You may suggest that your child find a full-time job over the summer or winter vacation, or work part-time on weekends or in between classes during the school semesters. The money saved from these efforts will help your child pay for some of the costs of going to college (and avoid incurring more credit card and student loan debt than he can handle) while pushing him into being more mindful of how he spends money.
Going to college can be a great opportunity for your child to learn, as well as prepare for the real world that comes after he graduates. Plan with your child and teach him about financial responsibility so it won?t be necessary to look for bankruptcy help post-graduation.
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Financial Literacy and Student Debt
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