The Biggest Financial Threats Facing College Kids

Posted on 08/24/2011

According to a 2010 study, five times as many college and high school students deal with anxiety and mental issues now than compared with youth from the Great Depression era. Experts say many of those anxiety issues are due to financial stress. If you know a student heading to campus for the fall—or if you are one—take note of these financial threats facing college kids.

Unreal Earning Expectations - A 2008 poll of freshmen at UCLA found that more than three in four feel being wealthy was either “essential” or “very important.” Holding on to high expectations when it comes to finances can set well-meaning students up for major disappointment.

Skirting the Rules - More young adults feel the rules don’t apply to them. That’s actually a behavior called “psychopathic deviation” and around one in four young people have it. This can be a threat to finances if the rules being broken include not paying bills on time or piling on school debt without regard to consequences.

Ignoring the Future - With the cost of tuition increasing annually at the majority of institutions, getting a degree without piling up debt can seem impossible. But students who spend tens of thousands of dollars earning a degree with little earning potential are setting themselves up for financial disaster. It’s important to do the math and make sure you’re investing wisely in your future.

Not Being Competitive - While the job market may be slightly better for college graduates now as compared to recent years, it’s still highly competitive. According to USA Today open positions increased which meant employers had half as many applicants per job compared to last year.

Using Credit Cards - Experts say the easy access to credit is one of the causes of overspending. Studies show college students can use credit cards to reduce anxiety or display power, but racking up debt while earning a degree is risky. A study from Sallie Mae found that nearly one-third of students put tuition on their credit card and 92 percent use plastic to pay for textbooks, school supplies and other expenses. More than eight in ten college students have at least one credit card, but on average students hold 4.6 cards in their wallets. Experts suggest only applying for the amount of credit you need and paying off the balance each month—two smart moves for every college student to consider.

By Alison Storm

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