While college students acknowledge the importance of being financially responsible, many don't actually have good financial habits.
While college students acknowledge the importance of being financially responsible, many don’t actually have good financial habits.
A new study highlights how many young adults have limited financial expertise, which can make them more prone to incurring debt.
Researchers conducted 3 studies involving college students and their thoughts toward credit cards and financial responsibility. While the results showed students understand that owning a credit card requires a need to be financially responsible, they had trouble assessing “conditional relations.”
In other words, associating financial responsibility with credit cards did not correlate with students actually showing responsible behavior. As a result, students may lack understanding of what financial acumen looks like and the consequences of being financially irresponsible.
The researchers pointed out that college students can be targeted by credit card companies because they know that students will eventually face expenses such as car loans and mortgages. Once in college and away from their parents (who could be good resources for financial questions), students may begin to rely more on credit cards.
“Credit cards have become a way of life, offering convenience and purchase protection, allowing for online shopping, and providing a cushion in case of emergencies,” the researchers noted in a press release.
They suggested that education about financial responsibility at college could be beneficial for students.
“If college students are to make wise financial decisions they must internalize the obligation to exercise financial responsibility,” the researchers stated. “It is their duty to spend prudently and to pay their bills when due, and a failure to do so is unacceptable.”
The study results were published in the International Journal of Behavioural Accounting and Finance.