Well it's that time of year again- Graduation. Whether you, your children or even grandchildren have graduated from high school, the stats are very alarming. America is the most marketed to country in the world. Everyday we are bombarded by things we 'should' buy, consume and finance to pay for later, because we 'deserve it'. As a result, many of our young people fall into the idea that they have to have everything at once. These ideas just cause a real mess!
The average 18 year-old leaving for college is one of the most susceptible and vulnerable groups simply because they are young, inexperienced and have never had any training on personal finance, in school or from their parents. Thankfully, some states, seeing the need, have started to change their high school curriculum to include a semester of personal finance required for graduation. Utah is one of those states. A few years ago when the state was deciding what course to use, Zions Bank (a local bank) stepped up and paid to have Dave Ramsey's high school course put into every high school in the state. The competition?- curriculum put out by the credit card companies. Talk about a conflict of interest.
In the past, these young freshman have been subjected to a mine field of credit card offers on college campuses. You probably remember the tables set up the first week of school- sign up for a card and get a free t-shirt or pizza. Talk about being sent to the slaughter. Thanks to the legislation passed last year, it is now illegal to get a credit card if you are under 21 without income verification and a parent co-signer. This in effect is cracking down on the marketing on college campuses. We have yet to see if this is actually working, but I hope it will help somewhat. Sadly, some enabling parents will gladly co-sign for their college student to give them 'experience' and to use for 'emergencies'. First of all, for the inexperienced college student, going out with friends every weekend is an emergency. Secondly, this is like giving your child a loaded gun, it could kill their financial future. Many students end up dropping out of college to get full-time jobs to pay for the credit card debt they have accumulated. Of course doing so activates repayment of any student loans they have taken out. So it ends up being more of a burden. As you send off your freshmen to school this fall, please remember that nationwide only about 50% of those starting college actually get a degree within 6 years. Looking back, and I'm sure many of you can relate, I only wish I new then what I know now. That is partly why offer a counseling package for graduates and newlyweds. After all an ounce of prevention is worth a pound of cure, isn't that how the saying goes?
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