College is a tricky time, financially-speaking, but a new study shows that risky financial behavior among first-year students upon leaving the nest may be a contributing factor.
The study, which included 40,000 first-year college students, showed that attitudes about debt and money contribute to how students spend their income. The study found that 79.2 percent of the participants worry about debt. The study also showed many of these students also agree with statements that cite going into debt as okay as long as they can pay it off later.
The study indicates that these attitudes can become behaviors causing debt-related stress that affects mental health, academic performance and continued enrollment.
The study, while pointing out these issues and potential problems, concluded that a major cause of these behaviors may be a lack of financial literacy. A solution would be for students to be educated on finances or have financial resource.
Jace Brown, a junior from Spanish Fork studying English, said his freshman year was the first time he had a job and had his own money to spend. He said he had to pay for his tuition and housing but whatever he had left over he spent and didn’t save. While Brown has never gone into debt, he said now that he is older, he realizes how important it is to have money in reserve for emergencies.
“It’s nice to have something to fall back on without having to go to parents,” Brown said.
Brown said he was required to take a financial literacy class in high school, but it wasn’t taken seriously by the teachers or students. He said if both parties had put more into the class his first-year experience may have been different.
Ashley Kotter, a freshman studying psychology from Layton, had a similar experience, calling her high school financial literacy class “a joke of a class.” While her class didn’t impact her as much, she said it could be beneficial to require BYU students to take a finance class.
“I think that would be more helpful than biology as a requirement because finance is something everybody needs to be educated on,” Kotter said.
While BYU doesn’t require a finance class, it has made information given in those classes available to both students and non-students. In response to seeing a need for more general knowledge of finance, the Marriott School of Business at BYU created a personal finance website to help both students and non-students become more financially knowledgeable. The website contains manuals on personal finance, lectures and other resources that look at finances from a gospel perspective.
Bryan Sudweeks, a professor of finance who is in charge of the website, said he has never seen this kind of resource anywhere else. Part of the website is set up like a class with finance lecture videos set up in the style of the finance classes he teaches at BYU.
“In this class we have the goal to save people a million dollars over their lifetime,” Sudweeks said.
The website, http://personalfinance.byu.edu/, is scheduled to be changed in April to make it more user friendly.