Financial literacy is important because it means that you know where your income is coming from and at what cost. Financial literacy means that you know where your money is going…and the cost. Being literate about your finances means that you have a plan to reach financial goals and do not deviate from your plan. SWIC wants to see you succeed and confidently be in charge of your finances. We want you to achieve your dreams of a college education without harming your financial future. These are just a few of the reasons we have started a Financial Literacy program. The goal of this program is to have you graduate from SWIC with the knowledge and understanding of your personal finances to be successful in your future!
Financial Literacy Classes
The Financial Aid and PALS departments have teamed up to offer Financial Literacy classes! These classes are an overview of general financial literacy topics that are important to the average college student. Topics covered during the class range from creating a budget to student loan repayment. If you are an instructor who is interested in having us speak in your class, contact Andrea at 618-235-2700, ext. 5425.
Steps to Financial Success
1. Create a Budget
While budgeting can be a daunting task for a new college student it is a key to success and will save you a significant amount of time and money by letting you focus on your classes! Budgeting will help you see how you really spend your money.
Prefer to budget electronically? Using a budgeting app on your phone makes it simple! Try one of these popular apps:
- Mint:This is the most popular app for budgeting. This app connects directly to your bank account and will update your spending automatically. You can set your budget amounts for each category to keep yourself on budget.
- LearnVest:This app links to your bank account and will automatically file all purchases in pre-named folders such as Entertainment, Groceries, Bills, etc. You can set a budget for each folder to make sure you stay on track.
- PocketBudget:This is a very basic budgeting app that displays your budget in a pie chart form. Very simple and straightforward.
- Mobile Banking:Typically banks offer an app to track your checking and savings account activity. This is especially valuable because most also offer budgeting services for free as well! Ask your personal bank for more information about the resources available to you.
2. Use Credit Wisely
Learning about credit and how to use it correctly will save you significant debt after graduation. Credit cards are both a tool and a weapon. U.S. News conducted a survey to better understand student financial literacy in regards to budgeting, credit card use, and student loans. What they found was that 44.2% of respondents were never taught about basic financial topics by their parents or educators. Their website offers a wealth of information to help students understand credit and how to make it work as a tool rather than a weapon. (https://creditcards.usnews.com/student#2017-survey).
Here are some important points to keep in mind when thinking about signing up for a credit card.
- Advantages+ convenience+ emergencies+ building good credit
- Disadvantages– high-interest rate if the balance is not paid monthly– hidden fees (annual fees, late payment charges)– create bad credit
- Are You Ready for a Credit Card?Do you really need one? After creating your budget, you should be aware if you are in need of a credit card for occasional expenses.Do you have the self-control to use it responsibly? There is a lot of temptation to use your credit card for things you want. Can you resist?Will you be able to pay the balance in full each month? You don’t want to carry debt from month to month and accumulate all of the high-interest rate charges.If you answered yes to these, you might be ready! Be sure to research for the best credit card for your personal situation.If you answered no, you might need to wait. There are alternative options for credit cards such as prepaid credit cards and debit cards.
3. Student Loan Borrowing
According to U.S. News, many college students need student loans to pay for educational expenses. Although federal student loans are typically the most affordable, they may not be a complete solution for every student. (https://loans.usnews.com/student-loans)
Do you need a student loan?
After creating your budget, you should be aware if you need a student loan or not to pay for education-related expenses.
Evaluate your expenses based on your program.
Include any regular living expenses if needed.
Research the average salary of jobs in your program
You can do this at payscale.com. Understand that you will need to make student loan payments within that pay grade.
Only borrow what you need!
Don’t over borrow and get in over your head with debt! It is very easy to borrow more student loan funds than what you need to pay for your expenses. They add up quickly! Remember that all of the loan funds will need to be paid back to the Department of Education after you graduate or drop below halftime.
Understand your loans and their obligations.
Make sure you understand the type of loan you take out, the interest rate, repayment date, and any other important information.
Know your loan servicer and repayment information.
If you need assistance with current student loan information? Need to contact your loan servicer? Trying to find what repayment option is best for you? Visit studentloans.gov for more information.
Don’t default on your student loans!
When repayment begins, there are multiple options available to you. Be sure to stay in contact with your loan servicer and communicate with them if you cannot make your payments. Student loan default is very serious and should be avoided at all costs.
Questions? Please contact the Financial Aid office for more information at 618-235-2700, ext. 5288, or email@example.com.