CT Better Business Bureau urges students learn financial responsibility
Released on: October 21, 2008, 10:37 am
Press Release Author: Howard Schwartz, Better Business Bureau, CT
Press Release Summary: Fewer than half know how to manage credit & finances
Press Release Body: Wallingford, CT - October 21, 2008 - More than half of teenaged students get a failing grade when it comes to looking after their own finances, and the result for many is an unmanageable debt load.
According to Connecticut Better Business Bureau President, Paulette Hotton Scarpetti, parents can serve as role models for sound financial habits.
"It isn't enough for young adults to be prepared academically. Their success may hinge, to a large degree, upon their ability to handle money and manage debt. These everyday skills are as important as anything learned in the classroom."
According to a 2007 survey commissioned by Charles Schwabb, fewer than half of teens consider themselves knowledgeable about budgeting (41 percent), how to pay bills (34 percent), or how credit card interest and fees work (26 percent).
Another survey, by the U.S. Public Interest Research Group, reveals freshmen have an average credit card balance of over $1,300 a month.
Connecticut Better Business Bureau recommends parents discuss with their teenagers four critical rules for managing personal finances:
Build a solid credit history: This includes keeping the number of credit cards to a minimum, keeping a tight reign on spending and paying off balances monthly to avoid interest charges.
Start saving money: Even if it is a small amount every month, a college student will reap a lifetime of benefits by developing good saving habits early. If a freshman puts $50 a month into a high-yield savings or money market account, that amount will balloon to $2,660 by graduation, and in 25 years, they will have saved nearly $15,000 plus another $15,000 in dividends.
Pay Bills on time: Credit card companies may charge late fees as high as $40. When a late fee is combined with interest fees upwards of 30 percent, students will quickly see how much money is lost by not paying a bill in full and on time.
Protect personal information: Students should be encouraged to shred unnecessary documents that contain personal information such as social security, bank account and credit card numbers, and keep a close watch on checks, debit cards and bank books.
Almost 80 percent of the time, personal information was stolen by someone with whom they had contact, making it important to protect against identification theft both online and offline.
Parents and students may find more information on ID theft prevention measures and managing credit and bills at www.bbb.org.
Web Site: http://www.bbb.org
Contact Details: Connecticut Better Business Bureau 94 South Turnpike Rd. Wallingford, CT 06492 203-269-2700 ext 103