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Financial Literacy

Financial Literacy. Quiz. What is the best way to build your credit score while avoiding fees?. Pay off the “minimum payment” each month on your credit cards Pay off your entire balance each month on your credit cards Open multiple credit cards and pay the full balance on some of them.

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Financial Literacy

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  1. Financial Literacy

  2. Quiz

  3. What is the best way to build your credit score while avoiding fees? • Pay off the “minimum payment” each month on your credit cards • Pay off your entire balance each month on your credit cards • Open multiple credit cards and pay the full balance on some of them

  4. How much should you spend on housing? • Around 30% of your income • Around 50% of your income • Around 70% of your income

  5. How much money should you keep liquid in your emergency fund? • Enough to cover 1 month of expenses • Enough to cover 3-6 months of expenses • Enough to cover 9-12 months of expenses

  6. How often can you get a free credit report from each credit bureau? • Once a month • Once every six months • Once every year

  7. Which of these will not improve your credit score? • Pay your bills before the due date • Have a credit card balance that is less than 30% of your credit limit • Use a prepaid credit card and don’t overspend on it

  8. So What?

  9. Financial Practices of Students • Credit card behaviors are indicative of overall financial practices. • Chen & Volpe (1998): only 53% of college students passed a financial literacy exam • Lyons (2004): 66% of students use credit cards responsibly • 33% at risk for financial crisis

  10. Future Implications • Robb & Woodyard (2011): positive correlation between financial knowledge and improved financial behaviors • Yates & Ward (2011): 34% of American consumers would give themselves a C, D, or F grade in regards to financial literacy • Record numbers in spending, student debt, bankruptcy, and mortgage foreclosures

  11. What can we do? • Curriculum: general education requirement • Programming: orientation, first year experience courses, senior colloquiums, events • Financial counseling: peer or professional

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