Newswise — While college students control $200 billion in national buying power each year, most students are poorly educated on how to budget their money, according to Hendrix College senior Eric Bell.
With little or no experience in budgeting, college students can easily sink into debt around the holiday season by taking trips to the mall, buying plane tickets home or other activities that pinch the wallet.
Bell knows it will be difficult to get students to budget wisely during the coming weeks.
"It is hard to get young people to think long term," said Bell, founder and chairman of the board of the Hendrix chapter of Future Investors, an organization that helps students learn about personal finance management and investing.
"If we can change this mindset for some, it will mean the difference between financial security in the long run as opposed to potential burdens."
"Young people go to college in hopes of creating a better future for themselves," said Bell, who is getting a double major in English and economics and business. "Unfortunately, many are forced to discontinue their education because they did not prepare for the financial decisions they would encounter as students."
With the average college student already $2,748 in credit card debt upon graduation, Bell said "college students must have a greater understanding of finance, banking and investment in order to survive."
Collaborating with financial and professional educators from around the state, Bell and a group of Hendrix students created a non-profit corporation dedicated to helping students combat financial threats and achieve financial freedom.
The primary program of the organization is the Future Investors University. The program sponsors events that are open to everyone, such as a six-part speaker series, bi-weekly workshops with financial professionals and opportunities to take part in the Stock Market Challenge.
Professionals who are invited to speak discuss topics ranging from improving debt management skills, creating personal financial statements and developing student budgets.
Along with the discussions, students also participate in the Stock Market Challenge, a competition between all Future Investors chapters in which teams of students manage a $100,000 mock portfolio.
Students are also able to participate in the Future Investors Academy which allows college students the opportunity to share their financial education with various classrooms and youth groups around the state. These students can receive college credit for helping the next generation of Future Investors become financially literate.
The Hendrix chapter of Future Investors has developed chapters at the University of Arkansas, University of Central Arkansas and University of Arkansas at Little Rock.
The Hendrix chapter, launched with a $6,000 grant from the Hendrix Center for Entrepreneurial Studies, recently became a fully-funded subsidiary of the center, a consolidation that will ensure increased media opportunities, increased ease in fund raising and the ability to focus more on the Hendrix chapter.
The Future Investors Web site, www.MyFutureInvestors.org, offers tips on how to start investing and lists these top 10 student money mistakes:
"¢ Making poor choices about which credit cards to get. "¢ Letting friends pressure them into spending money. "¢ Not setting up a budget. "¢ Not seeking out the best bank rates. "¢ Overpaying for schooling. "¢ Not keeping track of bank account balances. "¢ Lending money to friends. "¢ Failing to research product pricing before making purchases. "¢ Not planning for the future. "¢ Not having a job, even when they have time to do so.
Bell's goal for Future Investors is to expand to more universities statewide and reach more than 3,000 students by 2008. With events planned for this school year alone, Bell estimate an average of 1,360 hours of education for the current chapters. "Our results have been a positive testament to our hard work," Bell said.
Hendrix, founded in 1876, is a selective, residential, undergraduate liberal arts college in Conway that emphasizes experiential learning in a demanding yet supportive environment. Selected this year by the Princeton Review as the nation's No. 4 "best value" college, Hendrix is a member of Project Pericles®, an organization that promotes civic engagement among college students. Hendrix has been affiliated with the United Methodist Church since 1884. For more information, visit http://www.hendrix.edu.
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