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