4 Things to Know About College’s Impact on Your Bank Account
If you’re interested in going to college or you just want to learn more about the sizable population of college students in the United States right now, it’s important to understand these students’ current financial situation. Collegiate finances have turned into a common political and social debate, and you might want to know more about how those debates directly draw on students’ current financials. With information from a recent survey by OneClass, you can learn more about how college impacts students’ bank accounts directly.
1. Most Students Don’t Have Enough to Cover an Emergency
One of the most startling things to learn from the basic survey data is that most students don’t have enough money stashed away to create an “emergency fund.” Here’s the raw survey data, collected from 399 students across 82 schools who were asked the question, “How much money do you have in your bank account right now?”
- $0-$50: 13.5%
- $51-$500: 22.8%
- $501-$1,000: 10.5%
- $1,001-$2,000: 10.3%
- $2,001-$5,000: 20.1%
- $5,001-$10,000: 13%
- 10,001 or more: 9.8%
Experts suggest that an emergency fund should be enough to cover 3-6 months’ worth of expenses, so you can stay afloat in case of a serious emergency, such as having a medical accident or losing your job. Even at a very conservative three-month estimate, individuals should have at least a few thousand dollars. But according to this survey, an incredible 57.1% of people don’t even have that amount in their saving and checking accounts combined.
2. It’s Common to Not Have Enough to Cover a Night Out
But what about an even smaller amount? This survey split smaller amounts of money on hand into even smaller groups, which means that you can see how many people responded as currently having $0-$50 in their bank accounts.
Overall, 13.5% of people, which is just over one in eight, responded that they currently have less than $50 in both checking and savings. That’s worrisome because it can barely cover a night out, much less any emergencies that may arise. Although this may be simply because they just paid bills or otherwise made a large purchase, it’s a pretty substantial number of students.
3. Your Major May Matter
Unsurprisingly, the answers did vary between majors. As you may have expected, Mathematics and Business majors overall responded as having more on average than the other categories, which included Science, Engineering, and Arts and Education. This trend holds true with both the mode and median measurements.
Again, there might be secondary factors in this measurement. It may be that Mathematics and Business majors are more likely to have higher socioeconomic status before entering the major, especially since these majors often hold a reputation for being more difficult and more expensive. Or, because they’re typically seen as more prestigious degrees, they may receive more financial aid, leaving their bank accounts freer. Regardless of the reason, it’s a good thing to pay attention to.
4. The Longer You’re in College, the Worse Off You May Be
Finally, an interesting conclusion through the study is that third-year students by and large had the least amount of money. This study only turned up enough responses to draw conclusions for first, second, and third-year students, and regardless of the measurement type, third-year students tended to have the least amount of money.
In both median and mode measurements, third-year students turned up last place. This may very well be that as college continues and you accumulate more student and general debt, most of your money goes toward paying this debt off.
You shouldn’t draw too many conclusions just from one study; this is only one piece in the huge variety of studies that look at students’ financial situations. However, there are some interesting things that you might learn through this study, including insights into general student financial wellness. Whether you’re preparing yourself for your own collegiate experience or you’re just interested in the numbers, this picture of college wellness may be an interesting part of your research.