67 Percent of College Students Confident About Money Management

New Haven, CT – May 19, 2008 - According to a new survey by Higher One, 67 percent of college students reported they are confident or very confident about their ability to manage their own money. Nearly half of students are saving at least 5 percent of their income, and 22 percent of them are investing in some way.

“College students are remarkably savvy about money management and they understand the impact it can have on their lives,” said Miles Lasater, chief operating officer and co-founder of Higher One, a financial organization that works with universities. “More than 97 percent said developing good financial management is an important or very important skill.”

Based on the survey, students who rated money management as highly important were, on average, 18 percent more confident in their financial skills than students who were neutral about the issue.

Individuals who save more of their income tend to have more confidence in their financial management abilities. Men tend to be slightly more confident than women and are more likely than women to save a percentage of their income.

Other findings from the survey suggest that debit cards and online tools are the backbone of students’ money management:

• 72 percent of students are likely or very likely to use a debit card when making a purchase.Only 16 percent are likely or very likely to use a credit card.
• More than 70 percent of students check their account balance online at least once a week, with more than 33 percent of them checking at least once a day.
• More than 11 percent of students have never been to a physical bank to make a transaction.

“This generation of students uses different tools to manage money than their parents did,” Lasater said. “The fact that they’re using debit cards and tracking their spending online shows they understand the core principals of budgeting.”

• More than 73 percent of students learn about money management from their parents.
• For 60 percent of students, parents are the most important source of financial information. Students with more educated parents begin banking earlier. On average, students whose parents completed college began banking before they turned 16. The average age climbs to 18 among students whose parents only completed high school.
• Students who make their first financial transaction, such as a deposit or withdrawal, at a younger age are more likely to have a savings account and to own bonds, stocks, or money market accounts.
• 22 percent of students own at least one of stocks, bonds, mutual funds, and money market accounts.
• Most individuals seek out additional sources of financial information, including friends, school presentations, books, and online resources.
• Students reported that they took responsibility for their own finances at an average age of 18.8 years old—about the same age that they enter college.

This offers an opening for schools and other outlets to offer financial instruction to students.

"With adulthood comes financial responsibility and temptations,” explained Patti Noren, director of student financial services and bursar at Dowling College on Long Island, New York. “Dowling College is building a freshmen seminar/workshop to help make our freshmen students more aware of the good & bad of credit. We want to prepare our students by educating them with information on how to balance the future and make the responsible & mature financial choices."

“Students are always looking for ways to learn more about managing their money,” stated Lasater. “As a result, it is important for financial service companies working with students to work with institutions of higher education to continue to provide new ways for students to obtain this information.”

The Higher One survey was conducted among 1,547 students nationwide in March 2008. All students are enrolled in four-year universities, community colleges or two-year vocational schools in the last four years. Each of these students is enrolled in an institution of higher education that distributes refunds through Higher One. Response frequencies were measured for each of the questions and the data was analyzed using the SAS statistical package.