Academic journal article Journal of Family and Consumer Sciences

Empowering Young Adults to Control Their Financial Future

Academic journal article Journal of Family and Consumer Sciences

Empowering Young Adults to Control Their Financial Future

Article excerpt

Tomorrow's financial decision-makers need information and opportunities to build their personal financial management skills. Equipping individuals with the knowledge and skills necessary to make rational financial decisions creates the opportunity to shape a more informed, confident citizenry. The Commonwealth Credit Project (CCP) was designed to educate freshmen and sophomores on credit card issues and to assess their knowledge, attitudes, and behaviors related to credit cards and other money matters. Evaluation results indicate that a narrowly defined financial education program can be a positive step toward increasing students' knowledge, developing skills, and influencing attitudes that empower them to take control of their financial lives.

The mass media and academic journals report frequently on the financial illiteracy of Americans, especially college students (Chen & Volpe, 1998; Mack, 2001; Mandell, 2004). Many of these reports create images of young adults spending rampantly until they reach a crisis. Although these portraits are somewhat realistic, there is an untold side of the story. Some students choose not to have credit cards and some students with cards do manage them responsibly (Davis, 2002; Munro & Hirt, 1998; Newton, 1998). The bottom line, however, is that society's financial future lies in the hands of young adults who have had little or no education on managing personal finances.

Couple the lack of financial education with increasing frequency of corporate scandals, ethics violations, and fiscal irresponsibility and the ingredients for a national financial disaster are in place. Tomorrow's leaders need opportunities to build personal finance knowledge and skills (General Accounting Office, 2004). Educating young adults about financial matters that their generation will face is a viable way to increase financial security in homes and communities (Duguay, 2002; Financial Literacy and Education Improvement Act, 2003) and to develop an informed, confident citizenry. Providing information and building skills are essential steps in fostering long-term social, economic, and environmental change (Bennett & Rockwell, 1994).

The Pennsylvania State University Commonwealth Credit Project (CCP) was designed to introduce positive, extrinsic motivators and to assess the knowledge, attitudes, and behaviors of college freshmen and sophomores related to credit cards and other money matters. This interactive, two-session intervention was developed because of concern that students had easy access to credit cards but little access to educational programs about using them. Also of concern were reports that students' credit card debt keeps rising and is causing negative life-altering events (Hoover, 2001; Lim & Benjamin, 2001).


Lee (1996) reported that students hold strong beliefs about being responsible for their financial decisions, yet many of these students lack money management skills. Behaviors such as not balancing checkbooks and not making credit card payments on time puts young adults at risk for late fees and over-spending. However, educational interventions early in their college career-when many experience their first taste of financial freedom-can prevent mistakes linked to credit card debt and can start undergraduates on the road to a secure financial future.

From the time they arrive on campus to graduation, students double their average credit card debt and triple the number of credit cards they own (Nellie Mae, 2002). In addition, Nellie Mae reported that graduating students, on average, have $20,402 in educational loan and credit card debt, and roughly $2,327 of this amount is linked to credit cards. When compared to debt in the population overall, young adults' increasing debt is more prevalent, and the effects are surfacing and forming societal trends. For example, adults ranging in age from 25 to 34 have the second highest rate of bankruptcy following those who are in the 35-44-year age range (Draut & Suva, 2004). …

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