Higher Ed Utah

(Mark Larson, Daily Universe) — As the nation approaches the debt ceiling, lawmakers are attempting to fix a multi-trillion dollar budget crisis, but a national trend shows the personal finance crisis may be just as big of a problem.

Financial literacy is understanding and practicing good financial habits, and it has become a topic of major concern everywhere from BYU campus to the U.S. Senate in recent years.

A recent study by the National Foundation for Credit Counseling reported two in five Americans carry credit card balances from month to month.  About the same proportion of Americans said they would give themselves a grade of C or lower for their understanding of personal finance.

David Feitz is the executive director of  the Utah Higher Education Assistance Authority. Feitz said basic financial literacy is important for college students.

“Being financially literate is a key element in understanding how to pay for college in the most economical ways,”  he said. “They should understand interest rates and paying down loans. Most of the time students using loans for school is their first exposure to credit.”

Feitz explained a big part is understanding when to use debt and when to avoid it.

“You know the saying: the only thing more expensive than paying for school is to not go to school,” he said. “A degree increases your earning capacity.”

Feitz warned, however, against a few common pitfalls for students.

“I think there are a couple things that gets students into trouble: credit cards and cars,” he said. “It’s good to have a car but your decision needs to be economical.” More…