Stephen F. Austin State University

Financial Literacy Training

Financial Literacy Training

What is Financial Literacy & Why is it Important To Know?

According to Investoedia.com financial literacy is the education and understanding of various financial areas including topics related to managing personal finance, money and investing. It is important because this topic focuses on the ability to manage your personal finance matters in an efficient manner, and it includes the knowledge of making appropriate decisions about personal finance such as investing, insurance, paying for college, budgeting, retirement and tax planning.

CashCourse

SFA has teamed up with CashCourse which is your real-life guide to taking charge of your money. You can also explore financial topics, practice money skills, complete assignments for school and plan for your future. CashCourse is complete with presentations, informational guides and how-tos on everything from banking accounts to investing.

Visit Cash Course and create a student account to access the features.

Budgeting 101

Budgeting lies at the foundation of every financial plan. It doesn't matter if you're living paycheck to paycheck or earning six-figures a year, you need to know where your money is going if you want to have a handle on your finances. Unlike what you might believe, budgeting isn't all about restricting what you spend money on and cutting out all the fun in your life. It's really about understanding how much money you have, where it goes, and then planning how to best allocate those funds. Here's everything you need to help you create and maintain a budget.

Start With Your Income: The most important step when creating a budget is to determine how much your monthly income is. This would include your monthly pay, cash contribution from family, financial aid refund or any other type of income you might be receiving.

Track Your Monthly Expenses: The 2nd part of creating a budget is by adding up all your expenses for the month. It is easiest to start with your fixed expenses because those cost do not fluctuate from month to month. These expenses would include rent, car payments, insurance, dues and subscriptions. Once you have entered your fixed expenses it's important to track all your variable expenses which can change month to month based on what you are paying.

Create Your Budget: After you have your total income and your total expenses for the month you just subtract your expenses from your income. You should have money left over once all you have done this. Any left over money could be used to build up your emergency savings fund or help pay down debt or any other outstanding payments. If you are spending more money than you are earning in a month you might need to adjust your budget or seek a 2nd job to help you with the expenses. When completing a budget the table below gives you the average spending range on most categories.

Category Range
Housing 25-35%
Utilities 5-10%
Transportation 10-15%
Food 5-15%
Insurance 5-15%
Entertainment 5-10%
Miscellaneous/Personal 5-10%
Debt Payment 0-10%
Saving 10%-15%

Top 5 Ways to Save Money

1. Spare Change Challenge - Time to pull out that old piggy bank and start saving all your loose change. Anytime you receive any coin change rather that is a penny, nickel, dime or quarter put it in your piggy bank or "Spare Change Challenge Jar". At the end of the month deposit your collections into your bank savings account and be amazed with how much money you have saved.

2. $5 Savings Challenge - In the challenge it is your job to save every $5 bill you come across over the course of the year. Whenever you receive a $5 bill don't spend it and save it.

3. 365 Day Money Challenge - Have you ever been curious on how much money you could save by just starting off with 1 penny and adding one to that each day for 365 days? Start off with $0.01 the first day, $0.02 day and so forth until you get to the last day when you save $3.65. If you do this for 1 year at the end of the 365 Day Money Challenge you will have saved $667.95. That is a lot of pennies and money saved!

4. The 52-Week Money Challenge - This challenge is done weekly instead of daily but it still last for a year. Start off by depositing $1 into your savings account at the end of Week 1. On the 2nd week deposit $2. Continue increasing the amount you deposit until Week 52 where you will save $52. By the end of the 52-Week Money Challenge you will have saved $1,368 for a special event or a big upcoming purchase. If you are up for an even bigger challenge start off with $2 to earn $2,736 after 52 weeks.

5. Monthly Saving Challenge - This challenge happens once a month for 12 months over the course of the year. This involves saving an increasing amount for the first 6 months of the year and then goes down the rest of the year. Start off by saving $25 in January, save $50 in February, until you reach June and July when you save $150 for each of those months. After that it goes down $25 each month until you reach December which is $25. Over the course of the 12 month you will save $1,050.

Additional Resources

Other valuable resources may be found on the following websites:

Private Student Loans Guide

This website offers information on Private Student loans.

Hands on Banking

This website offers resources for managing money.

Tips to Budgeting

This website offers helpful tips for saving money and budgeting while in college.

Texas Council on Economic Education

This website educates viewers on spending money wisely.

Students and Financial Literacy

This website provides resources for college students on managing their money.

Debt Calculator

This website can help college students calculate their debt, and understand their debt.

Ultimate Guide to Financial Literacy

Student Loan Consolidation

This website offers resources on student loan consolidation lenders.

At the conclusion of reviewing financial literacy resources, students should be able to: