Campbell University has compiled some financial literacy resources to help ensure you are making smart financial decisions. It is never too early or too late to learn and grow your financial literacy. Below you will find a good starting place to learn about financial literacy, but you can find many more resources online as well. So what is financial literacy? Financial literacy is the ability to make smart and informed financial decisions by using your own financial knowledge and skillsets.
Below, you will find we cover five financial literacy topics.
- Saving and Investing
- Student Loans
- Preparing for the Workforce
Financial literacy can help prevent students and their families from making poor financial decisions that can have lasting negative results on their life and their financial security.
- Income: the amount of money received on a regular basis through work or investments.
- Expense: The cost of something.
- Loan: A sum of money that is borrowed and expected to be repaid with
- Interest: money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.
- Grant: A sum of money given by a government or other organization for a particular purpose and is normally not expected to be repaid.
A budget is a financial plan for a set period of time to help regulate your expenses and income.
A budget helps you save and avoid spending money you don’t have. Budgeting is a way to meet your financial goals.
- Start by calculating your income. Find out how much you’re making or receiving after taxes have been deducted.
- List your necessary expenses such as rent, car payments, groceries, etc.
- Set your goals whether that be saving, investing, or leaving more towards general spending or standard expenses. Having financial goals when deciding how much to set aside and how much to spend sets the boundaries for your money.
- Adjust your spending habits to accommodate your budget.
For more information on budgeting and resources to help with setting a budget you may visit the Consumer Financial Protection Bureau webpage.
Saving and Investing
As a student, the concept of saving and investing money might not be a primary focus. By beginning to save money now on a regular basis, it will begin to instill the habit of saving for years to come.
- Set a Plan: A good place to start after making the decision to begin saving money is to write out a plan. Take into account the amount of money you receive each pay period (income). Then decide how much money to take from your income and how often you will put money into savings.
- Hold Yourself Accountable: To create a lifelong beneficial habit, you have to be consistent in placing your money in a savings account on a regular basis.
- Provides financial stability in the future
- The money can grow with interest
- Gives peace of mind
- Can offer financial protection during emergency situations
- Creates opportunities for the future
- Personal Savings Account: A short-term savings account that pays interest to the owner for keeping money in the account and is easily accessible for withdrawals.
- Retirement accounts, such as a Roth IRA, 401(k), etc. are designed for long-term investing and savings to plan for future financial well-being.
- Consider speaking with a financial planner about your financial goals and how to achieve them.
For more information on financial planning and investing, visit the SEC website.
A student loan is a loan that either a student and/or cosigner borrows to pay for tuition, living expenses, and other fees associated with being a student. Payment is normally required after the student graduates or drops below half-time enrollment status.
- Federal Direct Subsidized Student Loan: A federal student loan where the government pays the interest on the loan while the student is at least enrolled half-time. Will have a grace period of 6 months after student graduates or drops below half-time enrollment before repayment begins.
- Federal Direct Unsubsidized Student Loan: A federal student loan that begins accruing interest from the date of disbursement. The interest can be paid either by the student while they are enrolled in school or with their regular payments. Will have a grace period of 6 months after student graduates or drops below half-time enrollment before repayment begins.
- Federal Direct Parent PLUS Loan: A federal loan taken out by the parent of a dependent student. Interest begins being incurred immediately after first disbursement to the university.
- Private Loan: A student loan acquired through a private loan lender or bank that requires the applicant to be creditworthy.
- For more information on other types of loans available: https://www.campbell.edu/financial-aid/available-aid/
- Grace period: Normally a 6 month period of time after a student graduates or drops below half-time enrollment status before the loan enters repayment. The amount of time can depend on the loan and the servicer providing the loan.
- Prepayments: Payments can be made on the loan borrowed at any time during enrollment.
- Monthly payments: Monthly payment amounts will be determined once you graduate, withdraw, or drop below half-time enrollment and complete the Student Loan Exit Counseling. For more information on Student Loan Exit Counseling, visit: https://studentaid.gov/exit-counseling/
- Research all of the loan options available and then decide which option(s) will work best for you.
- Don’t borrow more than the amount you need. Allow for a little wiggle room with your requested amount but don’t stray far from the value you need.
- Choose loans with low interest rates.
- Make prepayments while still in school to lower your balance due once you leave school.
- Always accept Federal Direct Subsidized Loans before accepting Federal Direct Unsubsidized Loans.
- Make sure you prioritize your monthly loan payments.
- Don’t be afraid to ask questions about loan options available to you!
- The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future. Making sure you have a good credit score will help you secure funding when you go to make larger purchases such as renting an apartment and buying a house or car.
Make sure you do your research on any potential cards to compare annual fees, interest rates, special rewards, and credit limits. Always pay your bills on or before the due date. Make at least the required payment, but paying in full is always best, if possible.
- Payment history. Make consistent, on-time payments. Making payments more than 30 days late can result in showing up on your credit report for 7 years and possibly a 90 point or more reduction in your credit score.
- Amount of debt. Manage your debt by setting a goal of how much to use on credit cards each month. Keep your debt utilization ratio below 30%. Debt utilization is the total debt divided by your total credit limit.
- Length of credit history. All things being equal, the longer you’ve been using credit, the higher your credit score will be. A long history of good credit shows other lenders you are a responsible consumer.
- New credit. When opening a new credit account, a lender does a “hard pull” on your credit report which may lead to a reduction in your credit score.
- Credit mix. A credit mix includes the different types of credit a borrower has. Lenders typically look for a variety of credit accounts with a prompt payment history. This shows the level of responsibility a borrower possesses. Students may not have access to different types of credit so lenders also keep that in mind.
- Request your FREE credit reports
- You can request a copy of your free credit report once every 12 months from each of the three reporting companies (TransUnion, Equifax, Experian) here: https://www.annualcreditreport.com/
- Visit the Consumer Financial Protection Bureau website for additional consumer resources.
Preparing for the Workforce
Preparing for the workforce is an important part of maintaining financial stability, even in college. Getting a head start on preparing for the workforce will help set you up for a successful future.
- A great way to earn money as a student and an excellent way to obtain new skills and build your resume.
- A great way to learn how to manage your finances before you step into the real world.
- A pathway to becoming financially independent.
- Taxes are a mandatory fee imposed by government institutions in exchange for services or certain rights. A portion of what you earn will be paid in taxes to support federal and state government agencies as well as local municipalities.
- For more tax information you may visit: https://www.irs.gov/individuals
- Net Worth
- Tracking your net worth is a financial tool that can give you a picture of your financial progress over a period of time. While budgeting hacks and savings tools are great, sometimes it’s easy to get off-track while using them. Tracking your net worth can be a good way to analyze where you’re currently at and how far you’ve come. This can provide more motivation to continue improving your financial picture while moving forward.
- Interview Knowledge
- Fun fact: You can negotiate more than just your salary at a job interview. You can negotiate your work hours, official title, maternity and paternity leave, vacation time, and which projects you’ll work on. These non-monetary benefits can still add real value to your quality of life.
- For additional resources for resumes and interviews, visit our Career Services resource page.