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The Need for Financial Literacy Among Young Adults
With US is facing its worst recession in three decades, parents should consider this as a warning signal and teach financial literacy to their children from an early age. In fact teaching nuances of financial literacy to children at an early age is highly critical and needs to be implemented in all schools across the country.
A steep 46% increase in the average amount of debt taken by college students has been recorded in the last 5 years only. This shows that more number of college students are relying on their credit cards instead of their parents or other sources of income, in the last few years.
The main cause for this steep climb is because most of them use four or more credit cards at a time. So, by the end of the last year, on an average, a student is left with a debt of $7000. Even with such a bad financial condition, it is a pity to note that one-thirds of them never discuss about credit cards to their parents.
There has been a new act formulated with regard to the usage of credit cards to save the current economy from slopping down further. The new Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 is primarily aimed at protecting college students and young adults, through the inclusion of a requirement that states that card issuers and universities disclose agreements with respect to the marketing or distribution of credit cards to students.
Although the new Act can help to reduce large debts, financial literacy is an important factor to be addressed now. It is highly vital for young adults to learn to build their credit without actually owning a credit card. There are many online personal money management software, that offer free registration, and is very simple to understand and use.
Using budget planning softwareright from early college days can help them to save well and use their finances to pay for college education. Online tools help young adults to visualize their earning and spending pattern; set realistic budget goals and follow the budget regularly. Most of the personal money management sites provide instant mobile alerts on purchases and monthly balances.
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