Study Examines How Students’ Financial Behavior Is Formed, and How It Affects Their Future

In the article below from today’s Chronicle, researchers at the University of Arizona are exploring financial patterns in college and long term success in college, career and life. To do this, they are looking at students’ spending patterns in high school and the role that parents and schools may or may not play in financial education.

Three things are clear: One, if students get exposure in high school or before to managing money, delaying gratification, controlling their spending influences and planning ahead, they are likely to apply the same strategies to other areas of their life like being smart about not having sex or using birth control or delaying the impulse to insult someone or incite an argument.

They are also are more likely to apply the same critical thinking skills they use for managing their finances to other areas of their lives like planning for college and career success, which requires a great degree of self-knowledge and discipline.

Two, if students are in a home where smart money decisions are modeled, including living within your means, saving and staying out of credit card debt, they are more likely to form those patterns as adults. If students see a pattern of debt and heavy spending with their parents, they are likely to adopt those same behaviors. So, schools would do well to help parents with financial literacy and college planning beginning when their students are freshmen in high school.

Three, some students will not have a model at home of anything positive to follow financially or otherwise. These students will need to rely on this material being part of their student success course in the freshmen year of high school and other stair-step success classes throughout their high school career. If students realize and master these skills early in life, it can mean the difference between living in the housing projects and living successfully in a Habitat Home. It can mean the difference between not being hired for a minimum wage job and starting in a minimum wage job, then moving up the ranks to manager with a company who will pay for your college. It can mean the difference between a workforce that can solve problems creatively and one that doesn’t see problems in the first place. It can mean the difference between graduates and workers who have strong thinking and leadership skills and people who are waiting around wondering why opportunities don’t approach them. Let’s change that dynamic.

by Beckie Supiano

For most traditional-age students, beginning college marks a new level of financial independence. It’s a time when key financial habits are formed, but relatively little is known about how that happens or what impact those habits have on a student’s future. A new longitudinal study aims to find out.

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