College students are getting increasingly worse at managing their personal finances, according to new report called “Money Matters on Campus,” conducted by EverFi, a technological critical skills company. The report stated that students struggle to pay credit card bills on time, review bills, follow a budget and balance a checkbook.

According to the report, 39 percent of four-year college students budget their money compared to 60 percent of two-year college students.

The research for the report was sponsored by Higher One, a student financial aid company.

Kara Johnston, president and CEO of United Equity Credit Union, said students’ lack of financial literacy can impede their ability to manage finances and make wiser financial decisions.

This could also be credited to the decrease in use of cash and the rise of electronic banking, Johnston said.

“It is okay to go into debt to pay for school as long as you are making an investment,” said Jeffrey Brown, professor of finance. “People just need to be careful of borrowing against their future simply to pay for consumption today.”

He said costs can rise quickly through routes like credit card spending because of high interest rates.

EverFi’s report surveyed over 42,000 college students nationwide about their banking, credit habits and student loans.

The survey found that “in general, responsible planning behaviors decreased over time, but risky financial moves such as using payday lenders or taking out cash advances on credit cards, remain stable.”

Brown said failing to budget and maintaining a good credit score can be “extremely costly.”

“You will pay higher interest every time you borrow money,” he said. “There are some insurance companies that have found that credit ratings are correlated with other types of risks that they might want to insure against.”

Therefore, Brown added, if you have a bad credit rating, it may be more difficult to receive insurance.

The report also stated that 17 states require high school graduates to take courses on personal finance to improve their financial literacy; however, only six of those states test the students on personal finance.

Worldwide, 9.4 percent of American students are considered to be “a top performer in financial literacy,” according to a study conducted by the Programme for International Student Assessment by the Organization for Economic Cooperation and Development.

Alex Fung, senior in LAS, said he uses different budgeting techniques to help stay on task.

“Usually at the beginning of the month, I have kind of a plan. I just write out and decide how much I’m going to spend on food at home, food out, stuff like that,” Fung said.

It is important to create sound spending habits while in college, Johnston said.

“The younger they are started, the better,” Johnston said. “Your credit score and debt ratio are really important.”

Johnston said students can use mobile applications such as Mint, Concur and Goodbudget to help them with their financial transactions and budgeting.

“It is just setting up a system that allows you to impose some discipline on yourself,” Brown said.

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