What's the Cost Of Financial Ignorance For Young People? Or Why Personal Finance Should Be Required for Graduation!
Answer: $795 Million ANNUALLY in checking fees
- You could buy 2 fidget spinners for EVERY American and still some money left over with that amount that young people pay in banking fees
Here were the two key takeaways based on recent research from NerdWallet (spoiler alert: It’s all about the overdraft fees):
- The median bank overdraft fee in the U.S., including university-affiliated accounts, is $35 , and the average college student overdraws his or her account 2.2 times per year, compared with 2.07 times for the average American. With over 11 million full-time undergraduate students in the U.S. as of 2016, most of whom have bank accounts, that could mean overdraft fees of more than $722 million . That’s an increase of almost $19 million over the previous year .
- One-third of students who will be graduating soon and who have a credit card have paid a bill late, and the average late-payment fee on the student cards we analyzed was $35. If one-third of the full-time undergraduate population with a credit card misses a payment, that’s almost $73 million in late-payment fees .
So, how as educators can we help students avoid these penalties? Here are a few resources from NGPF to help:
- Project: Overdraft Fee Analysis
- In this Common Core Standards-aligned project, students will mathematically assess the overdraft fees associated with major banks’ checking accounts and write a brief argument based on their analysis.
- Activity: What Text Alerts Should I Set Up On My Checking Account?
- Let your students decide how they want to track their checking account activity with this mini-activity
- Research: Opening A Checking Account Web Quest
- Research which financial institutions offer the best services, what needs to be done before opening a checking account. This will include having the right materials, and knowing the right questions to ask.
- Role Play: Basic Banking Activities
- Navigate through a series of simulations to practice using an ATM, writing a check, depositing a check, using a debit card, and paying bills. Each simulation has a narration that will guide and prompt students to conduct various transactions.
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.
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