Financial Literacy Workshop
On Tuesday, Oct. 13, Cory Cole from the College of Business presented a financial literacy workshop called “Financial Literacy and Money Management.” The goal of the workshop was to help college students become more financially literate because approximately 67 percent of undergraduate students leave college with student debt Former college students with debt “still have to pay back that debt,” even if they did not complete their degrees, Cole said. He also said that being financially literate is important because at some point or another everyone has to face a financial decision that will affect their future.
For money management, everyone needs to know each individual has a money personality, which Cole described as “your financial habits.” Everyone has their own money personality because we do not all spend our money on the same things. Cole’s advice to manage your money is “to define your financial goals,” then make a plan to complete these goals. Also, it is important for the goals that are created to be both short and long term; this will allow you to solve your current financial issues and prepare for ones in the future. An example of short-term financial goals would be to buy or pay off a car or go on a vacation, while long term goals would be paying off student loans, buying a home, and saving money for retirement.
The next step is creating a budget based on the money one is making and spending on a regular basis. It is important to divide your money into categories, and “get as detailed in your spending categories as possible” when tracking your spending, Cole said. Tracking your spending is the best way to know how much money you have spent and how much you have left. Cole also said the most important part of creating a budget is “separating the needs from the wants,” and “using this as a foundation” for creating that budget. It is also important to plan for other expenses, such as taxes and car insurance, and plan for the unexpected by creating an emergency plan.
In the workshop, Cole also explained the difference between debit and credit, and the importance of establishing credit early on. Debit come from a debit card; a debit card allows you to deposit and withdraw money into and from a checking account that is linked to the card. The money that is spent on a debit card is money that you already have. Credit is borrowed money that is similar to debit, but with a few exceptions. Credit has to be paid back to the lender, and the longer it goes without being paid back, the more interest is charged. The longer you have good credit, the better interest rates you can get and better car insurance rates, amongst other things. Some tips Cole gave to manage credit include advice to not take on large amounts of credit that you cannot pay off immediately and to not do so early in life. Also, another tip would be to never just make the minimum payment on a credit card; paying more will pay it off sooner and cost less in interest.
Another general tip he gave was recommending investing money in an IRA, also known as a retirement account, early on to have longer to save; he also suggested checking your credit card statements to be sure there are no charges that were not made by you.