Financial Education Classes Key to Preparing All Students for Post-High School Money Management Responsibilities
MCLEAN, Va.--(BUSINESS WIRE)--Jun. 24, 2009--
With high school graduation and summer just around the corner, many
young adults will soon be experiencing newfound freedom and heading out
into the world on their own. For many, this next chapter in life also
means taking on the new financial responsibilities without the help of
their parents. Capital One Financial Corporation (NYSE:COF) recently
surveyed high school seniors to see how prepared they are to manage
finances on their own.
Although the survey data shows the majority of soon-to-be male graduates
believe they are ready to take on these new challenges, the female
students are less certain of their ability to manage their finances on
According to the survey, two-thirds (65.4 percent) of the male students
rated themselves as “highly knowledgeable” about personal finance
compared to less than half (49.2 percent) of the young women who
participated in the survey. While the gender differences are surprising,
these numbers also show a striking correlation between the students’
confidence about their financial knowledge and whether or not they had
participated in a financial education class, with 45 percent of the male
students surveyed and 61 percent of the female students reporting that
they have never taken a personal finance class.
Overall, one-third of the students (33.8 percent) said that they were
either unsure or unprepared to manage their own banking and personal
“It’s clear that financial education, or the lack of it, has an impact
on students and the level of confidence they have in their ability to
manage money on their own,” said Diana Don, Director of Financial
Education at Capital One. “"Basic money-management skills are important
building blocks for economic self-sufficiency and success and it’s
important that all students understand the fundamentals of personal
finance when they graduate from high school."
Early practical experience with money and banking helps establish
Real world experience also prepares seniors for the financial challenges
and independence they will face upon graduation. Eighty percent of the
high school seniors surveyed report that they have had a bank account
for one to two years and that they are regularly checking their account
balances. Most of those with checking accounts (73 percent) balance
their checkbooks at least once each month and one quarter report that
they check their bank account balances weekly for activity and errors.
The vast majority (85 percent) of the students also said they at least
periodically set money aside in savings. However, only half of the
students surveyed (50.6 percent) use a budget to manage expenses and
Parents are a primary resource
The majority of the student’s participating in the Capital One survey
(70 percent) reported that they, at least occasionally, look to their
parents for advice about money management and personal finance. However,
only 27 percent said that their parents are their primary resource for
For seniors who will soon be graduating and experiencing more financial
freedom, Capital One offers the following tips for a healthy financial
Establish financial goals – As a first step to financial
freedom, consider and establish your own financial goals. Short-term
goals could include setting aside money to cover everyday expenses or
saving toward a vacation with friends. Long-term financial goals might
include planning to repay student loans or saving to buy a new car.
Develop a realistic budget that you can stick to – After
graduation, many seniors may be responsible for a number of bills and
personal expenses for the first time. Once you’ve established
financial goals, create a budget of expenses you expect to incur.
Gather recent receipts and be sure not to forget bills or things that
may be automatically deducted from your bank account. Then determine
your expected income. Determining your expenses and your income will
show any gaps and will allow you to allocate your money properly,
ensuring you are in control of your income and on track to meet your
Prepare for the unexpected – When creating a budget be sure to
set aside money for emergency situations or unexpected fees.
Balance your checkbook – It is one of the easiest ways to keep
track of your finances and avoid unnecessary fees that will eat away
at your budget.
Simply pay attention – Thoroughly read all bills, contracts and
fine print. This is one of the most important keys to financial
responsibility. It’s important to know your interest rates on all
credit cards and loans. You should also check your bills closely for
mistakes each month and report any erroneous charges immediately.
Pay on time – Paying your bills on time is the most important
step toward establishing a good credit history. If you anticipate that
you will be late on a payment, contact your lender in advance to make
them aware of your situation and see if there is any room for
Be smart about credit – Look for ways to establish a good
credit history early on as your credit rating will play an important
role down the road. If you choose to apply for a credit card or loan,
be sure to read the fine print and understand any fees associated with
the card. Also be sure to check your credit report at least once a
year; regularly checking is one of the best ways to protect against
identity theft and credit fraud. Consumers are eligible for one free
credit report every year from each of the three major credit reporting
agencies. Individuals can request their free credit report online at www.annualcreditreport.com
or by calling 1-877-322-8228. Consumers should also be sure to correct
any mistakes on their credit report right away. You can do so by
contacting each of the three major credit reporting bureaus – Equifax,
TransUnion and Experian.
Save, save, save – While it might be challenging to put aside
money in savings, this is an important habit to establish. No matter
how little you put away, every little bit helps so don’t wait to start
saving. Put aside anything you can today. One way to do this is to
have money automatically transferred to savings. This is one of the
easiest ways to begin saving. Set up automatic transfers in regular
increments to ensure that money goes directly to savings.
More information about personal finance and money management is
available on the Capital One website, including a free interactive
online tool developed in partnership with the non-profit consumer
advocacy group Consumer Action, which is available at http://www.capitalone.com/financialeducation/cbt/launcher.htm.
MoneyWi$e program arms consumers with financial tools and
Education is the key to a healthy financial future. To help consumers,
Capital One and Consumer Action created the MoneyWi$e financial
education program. The MoneyWi$e eLearning tool provides
interactive modules, worksheets and calculators to help consumers with
various personal finance topics, including saving, budgeting, and
rebuilding credit. The program includes a special section dedicated to
“Talking to Teens About Money.” Through interactive modules, parents can
learn how to teach teens about saving, talk to them about credit, help
them set financial goals and dispel myths about debit cards and writing
checks. Consumers can access the MoneyWi$e eLearning tool in
English and Spanish at http://www.capitalone.com/financialeducation/cbt/launcher.htm.
The findings reported in this release are from an online panel survey
conducted by the opinion research firm, Braun Research of Princeton, New
Jersey. The survey was sponsored by APCO Worldwide in Washington DC.
Braun Research completed 500 interviews with High School Graduating
Seniors throughout the United States. The interviews were conducted
between May 13, 2009 and May 18, 2009. The margin of error for this
study is ± 4.38 percentage points at the 95% confidence level. Sampling
for this study was supplied by invited panelists.
No statistical weighting was accomplished as all samples were drawn at
random and designed to fall proportionally to the population of High
School students in the United States by Census region.
About Capital One
Capital One Financial Corporation (www.capitalone.com)
is a financial holding company whose subsidiaries, which include Capital
One, N.A., Capital One Bank (USA), N.A., and Chevy Chase Bank, F.S.B.,
collectively had $121 billion in deposits and $150 billion in managed
loans outstanding as of March 31, 2009. Headquartered in McLean,
Virginia, Capital One offers a broad spectrum of financial products and
services to consumers, small businesses and commercial clients. Capital
One, N.A. and Chevy Chase Bank, F.S.B. have approximately 1,000 branch
locations primarily in New York, New Jersey, Texas, Louisiana, Maryland,
Virginia, and the District of Columbia. A Fortune 500 company, Capital
One trades on the New York Stock Exchange under the symbol "COF" and is
included in the S&P 100 index.
Source: Capital One Financial Corporation
Capital One Financial Corporation
Diana Don, 212-580-0161