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New Generation of Convenience Users?

A new study shows that 61% of students responsible for paying their credit card bills pay the whole amount each month. The ‘1997 Phoenix Student Fiscal Fitness Survey’ of 1,200 students nationwide also revealed that 24% of students have a credit card for personal use with 77% being the sole bill payers. Only 15% say their parents pick up the tab.. Interestingly, while three in five said having enough money is important to their happiness, 74% said not owing money was very important.

For the 1997 Phoenix Student Fiscal Fitness(R) Survey, 1,200 students nationwide — from seventh-graders through college seniors — were interviewed by telephone in June 1997. Respondents were from households in which at least one parent earned $40,000 or more annually.

Students Said Schools Should Teach Money Management

While students are satisfied with the amount of financial advice they get from parents, most are open to learning about money matters in school.

– 92% said they get parental guidance about money; 30% said they get a
– 93% of students said they get enough or more than enough parental
advice; only 7% said they would like more advice.
– 73% think schools should teach students how to manage money.
– Only 10% said they learn about money management in school.
– 26% said no one teaches them money management; they figure it out on
their own.
– 37% said they learn about money management by watching their parents’
example; 26% said their parents have an active role in teaching them
about money.
– 12% said their major source of financial information is the media.
Financially Optimistic, but Uninformed
This generation seems optimistic about its professional and financial future.

– 58% of college students predict they will find a job within three months
of graduation.
– 49% of college students expect a starting salary of at least $30,000;
one in five expect to earn $40,000 or more.
– 54% of all respondents expect to be wealthier than their parents.
Yet students do not seem to have a clear idea of how to meet their financial objectives, and they are not taking steps to educate themselves on financial matters.
– 88% said they are either very good or pretty good at managing their
– 30% said they are not at all interested in financial topics or money
matters; only 13% said they are very interested in such topics.
Many respondents did not know basic financial terms.
– Only 28% could precisely define buying on credit.
– Only 28% could precisely define mortgage.
– Only 25% could precisely define budget.
– Only 7% could precisely define life insurance.
– Only 4% could precisely define Social Security.
– Only 5% could precisely define compound interest.
– Only 3% could precisely define mutual funds.
Working Hard, but at the Expense of Studies
Students said they spend so much time on the job that their homework suffers.

– 52% of students had a part-time job during the 1996-1997 school year.
– Working students averaged 18 hours per week; 70% of college students
worked 20 hours or more per week.
– 58% of students who had a job admitted that their work interfered with
their studies.
– 89% of students who worked said they got a job on their own initiative;
just 2% worked only because their parents wanted them to.
– 96% said they are willing to work hard to earn enough to buy things they
– 22% said they have more than enough money relative to their needs or
wants; 58% said they have just about enough.
Show Self-Reliance, Report Less Financial Help from Family
A significant number of students demonstrate responsibility and independence in handling their day-to-day personal finances.

– 75% of students have a savings account; 86% of those with a savings
account contribute their own earnings.
– 29% of students have investments; 27% of those students purchased them
on their own.
– 24% of students have a credit card for personal use; 77% of them are the
sole bill payers, and only 15% said their parents pick up the tab.
– 61% of students responsible for paying their credit card bill pay the
whole amount each month, compared with 45% of adult credit card holders
in families with comparable incomes, according to the 1997 Yankelovich
Asked how college would be paid for, junior high and high school students plan to help.
– 91% expect to work.
– 77% plan to contribute their own savings.
– 43% expect to borrow money themselves.
Current college students make significant contributions to their education costs.
– 73% work during summer and vacations; 62% work during the school year.
– 59% contribute their own savings (up from 53% last year).
– 33% borrow money themselves.
Students may be developing this financial responsibility as families begin to experience the “squeeze.” Since 1994, according to the Phoenix Fiscal Fitness7 Survey, the percentage of middle-aged Americans that either support an aging parent or expect to has nearly doubled – from 22% to 40%. Parents and grandparents seem to have scaled back financial help to children.
– 42% of students reported receiving an allowance, a 4-point drop since
last year.
– 22% reported receiving monetary rewards for school performance, a 5-
point drop.
– 68% reported receiving gifts from grandparents, a 9-point drop.
– 11% of college students said grandparents help pay for school, a 5-point
– 51% of students with investments were given them by their parents, a 9-
point drop.
Financial Concerns and Aspirations Are Practical, Not Extravagant
Asked to cite their aspirations, most students spoke of happiness and love.

– 92% said being happy was very important.
– 91% said having children who love them was very important.
– 84% said having a job they love was very important.
While three in five said having enough money is very important to their happiness, their money-related aspirations are not extravagant.
– 84% said being able to pay for their children’s education was very
– 74% said not owing money was very important.
– 74% said having enough money to retire was very important.
– 71% said owning their own home was very important.
– Only 11% said having a million dollars was very important.
– Only 7% said having an expensive car was very important.
Their short-term financial goals also are practical.
– 64% of high school students and 39% of junior high students said paying
for college was their biggest short-term financial concern.
– Only 15% of students said buying or owning a car was their biggest
financial concern in the next five years.
Prepared for Phoenix Home Life Mutual Insurance Company by Yankelovich Partners Inc.

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