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There Is A 'Definite Need' For More Education On Finances

Oct 12, 2007
Young people attending higher education need more financial education, an industry expert has declared.

Speaking earlier this week, Becky Boden-Wilkes, spokesperson for the National Debtline, claimed that those going to university for the first time are becoming evermore used to a culture of borrowing. With debt now "an expected way of life" for those from the age of 18 onwards, owing money is something young Britons are no longer frightened of, but instead see having a loan or overdraft as "acceptable". As a result, she reported that those completing university are set to leave some 15,000 pounds in the red.

Overall, she claimed that attending higher education can be "very expensive" as a result of numerous expenses such as tuition fees and rent costs. "There are all those set up costs of moving out for the first time. There are lots of reasons why young people are more susceptible to debt," the representative commented.

However, she said: "It's not seen as anything to be worried about, because it's student debt and hopefully you're going to increase your earning potential in later life, but it gets you used to being overdrawn." Despite this, Ms Boden-Wilkes urged of the need for greater financial awareness to be promoted among students, especially those living away from home for the first time.

She reported that those just starting university may find themselves under "difficult" pressures to spend high amounts of money. During freshers' week, the National Debtline representative claimed that the initial period of higher education is all about going out, making friends and meeting new people. And although this may at first seem fun, by consistently not keeping a track on their spending, undergraduates could well see themselves struggling with their money management both during and after university.

Consequently, it was stated that providing financial advice as they begin higher education could aid young people in becoming more proactive in handling their money. One particular method by which this could be done is in the drawing up of a budget which could see consumers establish how much disposable income they have at the end of each month, as they can see their level of regular expenditure in addition to what money they have coming in.

Ms Boden-Wilkes asserted: "There definitely needs to be more talk about budgeting and people working out what they need each week. Then you know what you can spend rather than spending it all in the first few weeks and not really having much to live on." As a result, it is possible that doing so may help students take a more responsible attitude towards paying back personal loans and servicing other areas of their finances in later life.

The news comes after a report carried out by This is Money reveals that the interest charged on student loans has increased from 2.4 per cent to 4.8 per cent in the 12 months leading up to March this year. Due to facing increased student loan costs upon graduation, consumers may see pressure on their money management, for instance paying off personal loans, rising. As a result, those people concerned about their ability to manage their finances may wish to consider taking out a debt consolidation loan as a means of combining numerous debts into a single low-rate loan repayment.

Overall, some 12.7 million adults have opted for a personal loan as a means of getting to grips with their finances. However, Tim Moss, head of loans and debt for the price comparison website, warned those thinking about getting a debt consolidation loan against going further into debt, as some two-thirds of such borrowers will eventually go deeper into the red.
About the Author
Tom Dawson writes for Essentially Home Loans where visitors can apply for personal loans online, and also focuses on secured loans for UK residents. Visit Today: http://www.essentiallyhomeloans.co.uk
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