Only 58% of students from four-year institutions said they were prepared to manage their money, while 12% of respondents said they never check their bank balances because they are too nervous. Additionally, 16% of student respondents lived paycheck to paycheck and yet only three-quarters stopped spending when their bank account balances were low.
The findings come from the results of Money Matters on Campus 2015 survey of 43,000 college students across the U.S.
Related to financial knowledge, students who reported having a checking account, especially an individual account, were more prepared to make healthy financial decisions than those who were unbanked. This was especially true among the community college sample, where banked students answered 2.54 (out of six) financial knowledge questions correctly compared to 1.97 (out of six) for unbanked students. This strongly suggests increased experience with “transactional” bank accounts early on would be of great benefit to promoting financial self-efficacy while in college.
Surprisingly, results showed that even as young adults are increasingly connected to digital devices, only 14 percent of students reported having used any form of money management app to keep track of finances.
In line with results from last year’s study, students who took a financial literacy course in high school were 10 percentage points more likely to report being prepared to manage money in college than those who did not report any previous financial literacy education.
For three years, EverFi and Higher One have conducted extensive research into the financial attitudes, knowledge and behaviors of college students.
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