Most college students are engaging in smart money habits but may need more guidance in managing their finances, according to a report released Thursday from Sallie Mae.
The company surveyed 800 currently enrolled college students ages 18-24 in December.
When asked about spending:
- 77% of students said they always pay their bills on time;
- 73% of students said they pay their bills on their own;
- 60% of students said they never spend more money than they have;
- 55% of students said they put some savings away each month; and
- 25% of students said they have an emergency savings fund.
Fifty-six percent of students said they had a credit card, carrying an average balance of $906, while 85% said they used debit cards. Respondents were particularly concerned with building a strong credit history, with 60% of students saying their top reason for getting a credit card was to build credit. Two-thirds of credit card holders said they reviewed their credit reports, and 63% said they pay their balance in full each month.
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Sallie Mae's CMO Charles Rocha says the survey results are "surprising and reassuring." He notes that the students participating in the survey were between 10 and 16 years old at the beginning of the financial downturn, and watching the adults in their lives struggle during that period influenced their financial decisions.
Students also said they were interested in learning more about money management, with the most desired topics being:
- Savings (37%);
- Budgeting (32%); and
- Paying off student loans (30%).
However, the report highlighted some areas in which students may need more help managing their money. For example, 40% of students said they sometimes or often buy things with a credit card without knowing whether they will have the money to pay it off. One-quarter of students feared that their credit card debt was "out of control."
While 65% of students rated their money management skills as good or excellent, a multiple choice quiz on credit basics suggested otherwise. Less than one-third of students answered all three questions correctly, and those who rated their skills the highest were the least likely to earn a perfect score (Reuters/Fortune, 3/10; Mulhere, Money, 3/10).
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