This is Money Smart week designed to bring the Bloomington-Normal community up to speed on financial literacy issues.
WGLT's Willis Kern sat down with Illinois State University professor Tamra Davis to talk about financial literacy. Davis is an assistant professor of business education, and created a general education course for her students to help improve their financial literacy.
Davis said college students' lack of knowledge on finances could be due to their parents lack of personal financial knowledge.
"It could be that the parents themselves need to work on personal financial literacy, and it could also be that the parents were in charge and took care of everything for the student so that they didn't have to take care of it themselves," said Davis.
A rise in online banking has caused many people to stop balancing their checkbooks, since they rarely write checks. Davis strongly advised against this.
"We should all be reconciling our checking accounts, if not monthly, at least once per quarter to see if any bank errors are happening," said Davis.
Student loan debt is a big issue on college campuses. Many students don't realize the magnitude these loans cause to their personal finances. Davis said the average Illinois state student is $26,000 in debt when they graduate. Creating a budget based on a student's current income will make sure they have enough money to afford essentials year-round.
Davis said students without a budget could spend all their money in the first two weeks and run out of money for essentials, like food and gas. Davis had students track their money for a month to give them an idea of where their money is going.
"Typically by the end of the budgeting assignment...they get the big picture," said Davis.
Her Gen Ed course covers a variety of topics from career planning, to job finances, to taxes. After students complete the course, they have the skills to do their own taxes. She found students were afraid of credit, believing it would lead to debt.
"They've been told credit cards are evil..yet without a credit card, it's very difficult to rent a hotel room, or rent a car, or even build your own credit score," said Davis.
She ends the month long class by breaking down the benefits of insurance, especially for their home and vehicle. Anyone is welcome to take the course to improve their financial literacy.