04/19/2013 01:33 pm ET Updated Jun 19, 2013

Thoughts During National Financial Literacy Month


The need for financial literacy on college campuses is of paramount importance in the United States. Having a nationwide goal to increase the number of college graduates is important, but it must be paired with a companion goal for understanding and building students' financial health. National Financial Literacy Month serves as yet another opportunity to discuss how to make this a national priority and reality.

Some colleges and universities are helping their students hone their personal finance skills. Wake Tech Community College, for example, is hosting 15 events, including a Financial Awareness Workshop for future students and their parents. Similarly, the University of Tennessee kicked off a month-long series to promote financial stress awareness and better decision-making about borrowing.

Many of these young adults will no doubt benefit from hearing about the importance of limiting student loans, budgeting, being cautious with credit and protecting their identity. But we are learning that acquiring financial knowledge is not enough. It's more than just knowing that the way to gain wealth is by living below your means or the benefits of compound interest. It includes understanding your relationship with money and what triggers your spending, and learning how to control those urges.

A recent study sponsored by Higher One, Money Matters on Campus, found that young adults entering college were already exhibiting troubling and risky financial behaviors, with 20 percent having more than $1,000 in credit card debt and nearly 25 percent admitting that others would be horrified if they knew about their spending habits.

Similarly, recent articles by Dan Kadlec and J.D. Roth, two well-known personal finance writers, observed how important attitudes and behaviors are to financial wellness and wealth accumulation, suggesting that financial literacy education should focus more on the "behavioral finance" aspects of money management. I couldn't agree more.

Of course, more research is required to better understand the interplay between basic financial knowledge and the decision-making process. But a good place to start includes knowing more about students' financial inclinations at the outset of their college career, perhaps as part of overall wellness assessments that many institutions employ.

Likewise, I see broader benefits in providing more "mental money moments" for students and young adults in general. During Higher One's Financial Literacy Month Challenge of the Week, for example, students were asked to estimate their student loan payments using a simple calculator provided on the blog. Several expressed surprise about what their monthly payments will be and commented about the need to be more careful about the amounts borrowed. These kinds of interactive activities serve to increase awareness and reflection, and should be provided more often during the college experience.

I am reminded of that recurring public service commercial, "It's ten o'clock do you know where your children are?" Messaging aimed at personal finances would also be appropriate -- "It's ten o'clock, did you spend more than you should have today?" or "Have you started your emergency fund yet?"

There's plenty of opportunity to develop creative and engaging opportunities to help young adults develop positive financial attitudes and behaviors, so let's get started!