It's Your Money: Financial responsibility for new college students - WKOW 27: Madison, WI Breaking News, Weather and Sports

It's Your Money: Financial responsibility for new college students

MADISON (WKOW) -- It's that time of year: College freshman are getting ready for school, many of them preparing to live on their own for the first time. In our It's Your Money report, Greg Jeschke explores the one thing parents need to send along with their college student: money advice.

It's knowledge even straight-A students often lack: how to handle money and debt.

UW-Extension Financial Specialist Michael Gutter says while college students are doing pretty well, they're increasingly having more student loan and credit card debt and they're not necessarily well-equipped to mange this.

Financial literacy can escape students from freshmen to Ph.D's. A common pitfall is the dreaded credit card.

Student loan provider Nellie Mae reports the average college senior graduates with about $3,000 in credit card debt, and before they graduate, almost a quarter of undergrads carry a credit card balance of more than $3,000.

Gutter compares that debt to having a car payment after graduation, without having a car.

And he says parents and students need to be on the same page when it comes to money.

Will the student have access to a bank account at school?

How much can he or she withdraw at any one time?

Will the student have a credit card?

Who will pay off the balance?

Experts recommend parents supervise that first credit card, and they suggest the card not be one of the many offers the student will receive at school.

Following a few simple rules can keep students from digging themselves into debt, such as charging only specific items and not using the credit card for things like coffee or a night out. Also, no cash advances on the card because that's where you get hit with high interest rates. And, paying off the balance each month is also a good habit for the financially literate college student.

Only half of the nation's high school students passed a recent test about saving, budgeting and retirement.

Jumpstart Coalition surveyed 5,575 high school seniors across the U.S. for its annual survey of financial literacy among high school students.

The average score was 52.4%.

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