Back to School: Students “Ace” Financial Basics, but Continue to Give Themselves a “C” in Money Management

U.S. Bank’s Second Annual Student and Personal Finance Study Examines
the Attitudes and Philosophies of Financial Literacy of High School and
Undergraduate Students

MINNEAPOLIS–(BUSINESS WIRE)–School is back and in session and when it comes to financial literacy,
students have confidence in the basics, but continue to give themselves
a “C” when it comes to money management. These are the overall findings
of the 2016
U.S. Bank Student and Personal Finance Study which examines the
attitudes and philosophies on financial education among high school and
undergraduate college students ages 18 to 30 years old.

“This is the second year we have checked in with students to see how
financially literate they are,” said Robyn Gilson, U.S. Bank Coach for
Student Financial Education. “What we found is that students continue to
know the basics like budgeting and savings – but when the conversation
shifts to credit and investing, the grades drop. We want students to
know it’s not too early to understand credit or how to make solid
financial investments for their futures. It’s so important to start
young.”

In the 2016 study, students report they feel knowledgeable about the
basics of saving and checking accounts (42%) and about saving money in
general (39%). But when it comes to their knowledge of understanding
credit, there are a lot of misunderstandings. Most students (54%)
incorrectly believe having too many credit cards can negatively impact
their credit score and 44% incorrectly believe using checks and debit
cards helps to build credit. And, less than half (46%) of students have
checked their credit score.

“College is a good time to get your first credit card because
establishing a strong credit history can set you up to get a loan for a
major purchase – like a car – on your own once you start working,
instead of relying on a parent to co-sign,” said Gilson. “We recommend
using your credit card responsibly by paying for bills and everyday
expenses – without overspending – and then paying off the balance in
full on time each month.”

Beyond understanding credit, students also lack knowledge of investing
money (15%) and how to save for retirement (11%). They also report a
struggle to keep up with their day-to-date expenses, but they are
getting a little bit better. Last year, 67% of students reported that
they are barely keeping up in managing their daily finances, while this
year that number improved slightly to 60%. And there are slight
differences when it comes to gender. Male students report they are more
comfortable and feel extremely prepared to meet their financial goals,
describing themselves as ‘savers.’ Female students more often describe
themselves as ‘spenders,’ feeling ‘not at all prepared’ to meet their
financial goals.

The study also measured students’ views on what success looks like.
Success to students doesn’t necessarily mean owning a home or having a
high income. Most students cite personal happiness (72%) and health
(66%) as very important measures of success in life, while home
ownership (35%) and high income (23%) are considered less important.

Finally, students are not great at protecting their identity, despite
being hyper-connected and tech-savvy. Though 57% keep their passwords a
secret, 22% use passwords that are easy to remember and only 27% change
them regularly. About 45% of students monitor their credit card account
activity regularly and only 41% verify a business’ legitimacy before
sharing financial or personal information with them.

As part of U.S. Bank’s dedication to financial education, students and
parents can access advice, tools and resources on Student
Union. Students can also apply to win an up-to-$20,000 scholarship
for completing a series of short online personal finance courses
covering credit, budgeting and more.

About the Student and Personal Finance Study
The 2016 U.S.
Bank Student and Personal Finance Study was an online, quantitative
survey of 1,615 high school seniors and undergraduates (ages 18 to 30
years old) to assess their financial literacy, concerns and goals in
comparison to their parents. The survey was conducted in May.

About U.S. Bank
Minneapolis-based U.S. Bancorp (NYSE: USB),
with $438 billion in assets as of June 30, 2016, is the parent company
of U.S. Bank National Association, the fifth largest commercial bank in
the United States. The Company operates 3,122 banking offices in 25
states and 4,923 ATMs and provides a comprehensive line of banking,
investment, mortgage, trust and payment services products to consumers,
businesses and institutions. Visit U.S. Bancorp on the web at www.usbank.com.

Contacts

U.S. Bank Corporate Communications
Susan Beatty, 612-303-9229
susan.beatty@usbank.com