Chapter 63: Introduction to Financial Literacy
Amy Baldwin
Student Survey
How financially literate are you? This survey will help you determine how the chapter concepts relate to you right now. As we are introduced to new concepts and practices, it can be informative to reflect on how your understanding changes over time. Take this quick survey to figure it out, ranking the statements on a scale of 1—4, 1 meaning “least like me” and 4 meaning “most like me.”
- I actively and regularly plan and/or monitor my finances.
- I understand the benefits and risks of credit.
- I have a plan to repay my student loans.
- I regularly take steps to protect my identity and assets.
You can also take this chapter’s survey anonymously online.
STUDENT PROFILE
“A big part of the college experience for many students is the art of the student loan process. This has been both a painful and challenging experience for me over the course of the first semester. The biggest struggle for me has been simply understanding what everything means and what I’m supposed to do. Another challenge has been determining how exactly I’m going to pay these loans back while also saving for rent, utilities, additional expenses, and a study abroad fund with a part-time job that I don’t even have yet.”
—Hanna Moyster University of Central Arkansas
About This Chapter
In this chapter, you will learn to reach your personal life goals by implementing financial planning and strategies to protect yourself, manage your money today, and put yourself in a better position for tomorrow. How you act today impacts your tomorrow.
By the end of this chapter, you should be able to do the following:
- Align your personal and financial goals through smart financial planning.
- Create a saving and spending plan and track your performance.
- Identify best practices and risks associated with credit cards and other debt.
- Determine the best opportunities for you to finance your college education.
What Would You Do?
Think about this scenario: Everything was working out for Elan. They got into the college they wanted to, and some friends were planning to attend as well. They felt like an adult and were looking forward to new freedoms and opportunities. Elan’s parents let them get a credit card after high school graduation. Elan shared an apartment with their friends just off campus, and was able to get where they needed to go because they had a car. Elan had also saved over $1,000 from gifts and a summer job. They needed a new laptop.
Elan planned to stay within set limits. They went to the store and found a very knowledgeable salesperson, Jermain, who said he knew exactly what Elan needed. Jermain pointed out that the laptop in Elan’s budget would do schoolwork just fine, but it was not as powerful as the best unit with advanced gaming features. Plus, the better computer came with new headphones! Jermain suggested that Elan could later sell the computer to incoming students. (Most first-year students bought used c