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Financial Literacy and College Students

Published: April 18, 2022
 

If you’re a college student or hope to become one, you need to know how to afford both your college and living expenses. You need to understand financial literacy. Financial literacy is the basic knowledge of key financial concepts such as balancing a checking account, knowing how much you earn and pay in taxes, and when and how you should borrow money. As you plan to invest in your education, one important financial decision is how you will pay for it, and whether you should accept a student loan. With the right financial know-how, you can handle that decision and others with confidence.

College and Financial Literacy

Did you know that among all their responsibilities, college students are least prepared to manage their finances? And that the majority of students have never taken a personal finance course? But financial literacy can help you manage your money, make sound financial decisions, and plan for the future. If you need to brush up on your financial knowledge, here are a few key concepts to start with:

College Student Loans

Taking out a student loan is a big decision and should not be taken lightly. Unlike other types of student financial aid like grants and scholarships, loans need to be paid back. And there are many different kinds. As you research loans, be sure to compare terms and rates. Federal student loans can be a better option than private loans because they may offer lower interest rates that are fixed. But that’s just one key piece of information. You also need to learn the difference between subsidized and unsubsidized loans, what the different repayment plans are, and what can happen if you can’t make a payment. Be sure to research your financial aid options before taking out a loan.

Budgeting

About 40% of students surveyed don’t regularly check their account balances and roughly 60% don’t budget their money. Yikes! How can you spend money if you don’t know how much you really have or what you owe? When you’re in college, money is tight. To ensure that you have enough to pay your bills on time, and that you have enough left over for essentials, you need to budget. You need to know your net income, your monthly expenses, and what non-essentials, such as subscriptions and streaming services, can be cut.

How to Become Financially Literate

It doesn’t take a degree in finance to become financially literate. Anyone can learn these key concepts.

  • Access Government ResourcesThe Financial Literacy and Education Commission offers resources to help you learn about finances. Several are geared toward college students.
  • Take a Finance Class—Even if you don’t major in business, try to take a finance class that can teach you the basics of money management.
  • Use Your School ResourcesYour financial aid office has staff that can answer your questions and help you broaden your knowledge about finances.

At Charter College, we understand that your finances are important. That’s why we have a team of trained education loan specialists who can help you navigate financial aid and determine what’s best for your individual situation. To learn more, fill out the form today.