By Chuck Jones, Special to the Guard
“Foundations of Personal Finance” is a relatively new course that is providing important knowledge and tools to help college students avoid personal financial disaster.
The University of Arkansas Community College at Batesville is offering this much-needed program to teach young people the fundamentals of personal and family budgeting, banking services, income taxes, credit and credit cards, automobiles and other major purchases, insurance products (health, life, property, liability), investments and retirement planning, real estate, and estate planning.
“Everyone wants to take advantage of so many entertaining activities and lifestyle diversions, but we seem to forget that they all cost money,” said Phil Baldwin, Citizens Bank CEO. “We applaud the new UACCB curriculum that will help our young people understand the financial factors impacting their lives, and the importance of handling their affairs responsibly.”
The new course is critically important at this time because our young adults of the so-called “Generation Z” are racking up massive amounts of consumer debt.
“Gen Z’ers,” defined as people born since the mid-’90s, have used digital technology since a young age and are comfortable with the Internet and social media. However, researchers say they are not necessarily digitally literate.
Nor, apparently, are they very financially literate.
Due to an obvious lack of knowledge about money matters, Gen Z members began signing onto a consumer credit train wreck as soon as they became old enough to take out loans and credit lines, and are piling on even more debt every day.
They seem to be unaware that they are seriously risking their financial futures, with many postponing financial independence by years.
A major credit agency recently found that 14 million Gen Z consumers – 44% of the entire generation! – were carrying some type of consumer credit balance; and that number represented a one-year increase of 27%. And another 13 million consumers will become credit-eligible (over 18 years old) over the next three years.
Credit cards are the most common form of consumer credit used by Gen Z, which comprises only about 5% of the U.S. population carrying card debt, but 55% of Gen Z cardholders have an outstanding balance.
These numbers should be horrifying to every generation, starting with the Baby Boomers, and extending all the way through to the end of the alphabet, to Gens X, Y, and Z.
Financial education of our next generations is absolutely essential.
“Early adults today carry unprecedented levels of student and credit card debt,” according to another study. “Starting salaries aren’t rising, but cost of living continues to. Many struggle to find meaningful work that pays well. Most rely on their parents for continued financial support to make ends meet and maintain their lifestyles.”
One ray of hope, the study reported: “While 19% of respondents define financial success as being rich, 60% say being debt-free would mean success to them.”
These financial pressures, and outstanding student debt, appear to be creating a situation where many early adults would like to be financially independent of their parents, but they aren’t there yet. And that goal was the top factor given when respondents were asked “what it takes to become an adult.”
Fortunately, UACCB plans multiple offerings of the “Foundations of Personal Finance” course to be available every semester, according to Brian Shonk, Vice Chancellor for Academic Affairs. It is a one credit hour course that will cost about $100, depending on residency status.
To register or to obtain additional information about the class, contact the Admissions Office at UACCB, 870-612-2139.
Chuck Jones is Chief Communications Officer at Citizens Bank in Batesville.