Financial survey determines students' spending habits

With rising college costs, it is important for students to manage money.

By Katie Lees

Published Oct. 17, 2008

During the spring semester, a financial survey was given to MU students in order to receive information regarding students' financial knowledge and credit behavior in previous years.

University of Florida professor Michael Gutter conducted the study in accordance with MU personal finance professor Deanna Sharpe.

"Our department and our colleagues recognize that knowing how to make effective financial choices is an increasingly important life skill for today's college students," Gutter said. "Financial education is a critical part of virtually every important life choice that students are making or will make as they become independent adults."

Sharpe talked about her concerns regarding student debt and education.

"Rising education costs put many students in debt for years when they borrow to pay for an education," Sharpe said. "Although that can be a good investment from an economic standpoint, it does present some constraints on future spending during the years the loans are repaid."

Sharpe stressed making important choices regarding how to invest money, how much to invest and what to do if markets were to slump.

"Credit in general, and credit cards in particular, can benefit students in several ways," Sharpe said. "For instance, they can serve as a temporary emergency fund, they are easy to carry and less risky than cash when traveling, and they make online purchases easy."

Sharpe also said if credit terms are abused and not managed properly, the costs can be quite high.

Sharpe discussed how with the changing global economy, the importance of educating students is greater.

"Educating students about the selection and use of financial products, as well as about how to avoid abuse, fraud or misallocation of resources is vital to their future economic success," Sharpe said. "As part of that endeavor, personal financial professionals strive to learn more about what college students understand about personal finance and economics, where they have learned it, when do these teachable moments occur regarding finances for college students, how are college students managing their financial choices and resources and what are the implications of those choices. We use what we learn to develop more effective education and training programs."