Students' confidence exceeds their financial skills

College can be a confusing stage of life, but you wouldn't know it from how students rate their financial knowledge.

About 57 percent gave themselves high marks for their financial literacy in a new survey commissioned by the American Institute of Certified Public Accountants, compared to just 12 percent who rated their money smarts as poor or terrible.

That would be nice if it matched reality, given the $1.27 trillion outstanding in student loans. But unfortunately, the AICPA survey found that often students behave like financial illiterates.

Almost half—48 percent—reported having less than $100 in the bank at some point in the last year, the survey found. And 38 percent said they had borrowed money from family members or friends.

Not surprisingly, another survey by GoBankingRates, out this week, found 1 in 4 Americans think about money more than anything else on a daily basis, and thoughts about money are most common among people aged 25 to 44.

Millennials and others "have been careless with either their money, their lack of knowledge, or putting wants before needs," said Ernie Almonte, chair of the AICPA's National CPA Financial Literacy Commission. "This is a great opportunity to teach the next generation how to handle their finances."

The findings in the AICPA survey bear out earlier findings on millennials' lack of financial literacy. In 2014, the Investor Education Foundation of the Financial Industry Regulatory Authority, or FINRA, released a study on the financial capability of young adults that found they "exhibit a number of problematic financial behaviors, display low levels of financial literacy and express concerns about their debt."

The millennials in that survey were more likely to go without bank accounts and spend more than their income, and while they were more likely to have rainy day funds than Gen Xers, they were less likely than older generations to do so. Some of that behavior is a function of their stage in life, but FINRA also found that theirs was the generation least likely to indicate high levels of financial literacy.

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In Almonte's view, the new data point to opportunities for parents to convey simple lessons about money.

"Budgeting is such a great thing to teach them at this age," he said. "If they mess up, it can be a small thing that can be fixed." By the same token, he said, college can be a time for a student to learn to manage a credit card—provided the credit limit is low. It can be a tool to teach them the difference between needs and wants, and a low credit limit will cap the damage they can do to their finances.

Almonte knows the hubris of college students from firsthand experience, he said. And it has driven home for him the importance of providing financial education in college, or sooner.

"I have five sons," he said. "I have had to live through them being confident in everything they did."