Chapman University sophomore Maggie Wright can exactly pinpoint her problem in saving money: It is her problem in spending. The creative writing major places herself squarely in the category of financially illiterate.
“My parents take care of everything,” Wright said.
Wright is far from alone. About 40% of college students say they are not financially literate and rely on their parents for financial knowledge, according to the National Bureau of Economic Research.
Financial literacy means knowing about money management or being completely on one’s own financially.
So what is the problem?
“This is always such a cheat word, but it really depends,” said Ketzia Abramson who supervises the new Residence Life financial literacy program for continuing student communities. This includes sophomore, junior, and senior students who live in on-campus housing.
Abramson and the Residence Life team got together and realized they could be more direct with their programming, Abramson said.
“We decided financial literacy was an area that students would greatly benefit from. Some people get out of school and they say ‘Why didn’t anyone teach me how to do taxes? I know how to do A-squared plus B-squared but not how to do that,’” said Abramson.
Chapman students’ financial knowledge ranges from people who are doing their own taxes, budgeting from week-to-week, and putting themselves through college to people who just do not know much about anything when it comes to money.
“Financial literacy can be as simple as budgeting. When you’re not forced to be in the cafeteria all the time, it gets harder,” said Abramson.
Sophomore political science major Haley Waldron believes she has some knowledge when it comes to budgeting.
“I budget in the sense where my parents give me money monthly, and I have to budget what I spend, how much I eat out, and other items I may want to purchase,” Waldron said.
For students, it is important to know how much they are spending in order to be able to pay off credit card bills.
“I have a credit card, and I try to pay it off as frequently as possible so that I make sure to never go over how much money I have in my checking account,” said Jake Bishop, a senior political science and sociology major.
And for others, it is easier to know about finances than to actually practice being smart with their funds.
“I know what I am supposed to do but I am really bad about practicing financial [literacy]. Like I don’t budget or save,” said Paris Armstrong, a senior psychology major. “I’m bad at money management because I like to keep up with my friends and do fun things, so I spend a lot of money even if I know I shouldn’t.”
There are students who know their money management skills are not great because of their socioeconomic status.
“I grew up more privileged than others, not to say my family is wealthy, but rather I was spoiled,” said Waldron.
Abramson believes the financial literacy program will help even though Chapman is a more affluent campus than others.
“Chapman seems to have a community that is somewhat well-off, but that doesn’t mean they shouldn’t be financially literate,” said Abramson.
Too many students, perhaps, are like Maggie Wright.
“I do not budget, but I should,” said Wright. “I spend too much at once and it is hard to come back from it.”