Managing our money is one of the most critical decisions that can be made in life and taking it “lightly” can be a danger to our pockets. It all starts from knowing about Financial Literacy and its principles.
If you are a student who does not understand what Financial Literacy is, do not feel bad, as many students still struggle with money.
It is all about our decisions.
Donald Ross, Professor of Business and Economics at Oklahoma City Community College, has 12 years of experience as a teacher and has worked as a program manager for the AT&T company for about twelve years.
He explained the “why?” of the biggest flaw in our economic management.
Ross said that the handling of Financial Literacy falls into three categories: “Budgeting, basic line accounting, and the basis of economics.”
So why does it get so complicated if it is based on these three categories?
According to Ross, the answer lies in how good our decisions are.
How much do some shoes cost? How much does it cost to buy new clothes?
Being able to understand how much money things cost and being able to know how much they cost us is when we value our financial decisions.
Even experts are bad at first.
“When I was young, I set up my first checking account and went to buy some tennis shoes. For some reason, I was under the assumption that if I were a dollar short, the bank would cover me, and in fact, they do not. They charge you an extra $20 bucks.” Ross said.
Ross also mentioned experience makes perfect, and the younger we are, the more we tend to have financial problems.
Now let us dive into the danger of loans.
“It’s not dangerous if you are responsible for it,” Ross said about student loans.
A survey by Melanie Hanson entitled “Student Loan Debt Statistics,”indicates that “Among today’s college students, 65% graduate with student debt,” this shines a light on the unfortunate reality students from this generation will expect when they come out of college.
Ross says the solution to this problem is to be conscious and make good decisions again when getting a loan.
“Student loans absolutely can pay off, if you take the right amount out, and then get the degree that would pay off on that,”
Some degrees may have higher pay than others factoring on the decision if you want to take out a loan. A degree in nursing will pay more right after college than a general degree.
Another factor Ross talks about is deciding between starting in a 4-year university or a community college.
When we talk about a university, costs are much higher than jumping into a community college right off the bat.
Of course, it’s each student’s preference, but if you can save money for two years and transfer and get a loan, it may be better to pay for two years rather than four years.
There are a lot of tools right at our fingertips that could help with money management.
You can download a budgeting app free of charge and track your spending, some bank apps even have a way of tracking your spendings in certain categories to make sure you choose the best decisions.
Suppose you are a student who has not taken financial literacy and has several questions on better managing money.
In that case, Ross recommends reaching out to the Bursar office, your financial advisor, or even your economics professor to point you out in the right direction, as money is no joke.