Financial Literacy — Money I.Q.

Education is a good investment!

Education can increase your earnings but you must finish your degree. A college degree will get you $10,000 to $20,000 more a year than a high school diploma. A professional degree (accountant, engineer, lawyer, etc.) will earn you the most. Education is a good investment. View the chart below (click on the image to enlarge it as a PDF file) for 2007 median income and unemployment rates based on education level.

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The Power of Education

Why Should I Care Now?

  • The average loan indebtedness for a student graduating with a Bachelor's degree from a 4-year public institution is $17,277 (source: FinAid.org external link)
  • The average national credit card debt at graduation is $2,169 (2004) (source: Nellie Mae external link)

Will This Negatively or Positively Impact Your Future Life Goals?

The choice is yours-read on to ensure you are making positive financial choices now for your future life plans:


Financial Literacy Information


Where Am I Now and Where Do I Want to Be? top

Set goals - work backwards from long-term to short-term

Long-term:

  • Own a home
  • Buy a car
  • Have a family
  • Children's College Tuition
  • Travel
  • Hobbies
  • Retirement Plan
  • Donate to favorite charity
  • Career - How much money will you make? How much schooling will it take? More schooling = higher cost which should (but not always) = higher wage
    • Remember: not all careers pay the same
      • Example: Lawyer versus social worker
    • What are your values?
      • Make lots of $$ (higher extrinsic/less intrinsic return)
      • Social activism (lower extrinsic/higher intrinsic return)
      • Family
      • Work Close to Home
      • Combination of the above

Note: your values are neither right nor wrong - just different. Choices you make now will affect whether your life later on reflects your values and goals.

Short-term:

  • Education - what education is needed now to obtain your long-term goals? College does cost money but there are cost-saving actions you can take now to help achieve long-term goals.
    • Live like a student now so you don't have to live like a student after you graduate.
    • Search for Maximum Free $ First - grants and scholarships
    • Plan on working part-time during school year (and full-time during summer breaks) to help reduce college expenses.
      • Studies show students who work 10-20 hours per week while in school do better academically than students who do not work at all because they learn time management skills.
    • Use student loans responsibly
      • Only borrow what you need - not necessarily the maximum offered
      • Always take out federal school loans first before private alternative loans
      • Do not use credit cards to finance educational expenses - including living expenses.

Saving Money top

  • Reduce living expenses while in school - options:
    • Roommates
    • If possible, continue to live at home while attending college
    • Use public transportation
    • Buy older car so you do not have a car payment
  • Make a budget.
    • A budget is not about self-deprivation - it IS about making choices.
    • A budget is a tool to get where you want to go.
    • A budget give you control - tells you where you are and predicts where you are going.
    • A budget is a mathematical confirmation of your financial situation. (Idaho State University - Financial Common Cents Presentation)
    • Budgeting Golden Rule: Pay all bills on time!
    • Most Important: When money runs out stop spending!

Fun Ways to Test Your Knowledge top