The Budget Room

Today US is facing its worst recession in three decades, which should be a reminder to responsible parents that it is highly important to teach financial literacy to young adults in the family. In fact it would be a highly appreciable if it was included as a school syllabus and children were taught the nuances of financial management at an early age.

In the present day, college students are those who are relying more on their credit cards, compared to other segments that actively use them. Recently it has been found out that there is a steep 46% increase in the average amount of debt taken by college students, since 2004.

The sudden steep rise can be contributed to the possession of four or more credit cards per student. So, this leaves them with a large $7000 debt balance by the end of their college education. It has also been found that one-thirds of students rarely or never discussed credit card issues with parents.

A new Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 has been passed in May this year. This is to protect the American consumers, especially young people at college level. The act 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.

While the new Act can work in favor of those with huge debts, financial literacy is the key to make a universal impact on todays youngsters. It is important for young adults to learn how to build their credit without actually having a credit card. There are online personal money management softwarewhich is very simple to understand and use.

Budget planning softwarecan be used from early college days. This will help students to save and use the same finances to pay for their own education as well. Online tools provide young adults with features that will help them to visualize their earning and spending pattern; set realistic budget goals and also stick to the budget always. Personal money management sites also provide mobile alerts on purchases and monthly balances.