Financial Literacy and Your Students- A Winning Combination

Takeila HallFall 2011 NCASFAA

What Is Financial Literacy? Why Is It Important?

• The ability of individuals to make appropriate decisions in managing their personal finances

• Financial Literacy is critical for a healthy, sustainable economy and culture

• Understanding financial responsibilities and managing money can have a positive impact on repaying education loans!!!!!

Financial Literacy – or Illiteracy Statistics

• The majority of high school students were unable to answer basic financial questions regarding credit, savings, interest, and insurance. (Jump$tart Coalition for Personal Financial Literacy, 2006)

• College students’ survey results:– Correctly answered 62% of the questions– College freshman correctly answered 59% of

the questions– College seniors correctly answered 65% of the

questions. • (Jump$tart Coalition 2008 survey)

2010 Financial Literacy Statistics – North Carolina

Financial Literacy Resources And Tools

• NEFE Tools • America’s Promise Alliance• Federal Government Resources• Mapping Your Future Tools• Cash Course• Other Resources• Get Financially Fit• CFNC Resources

National Endowment for Financial Education (NEFE)

• Educate high school students about money management and financial planning

• Help teens develop positive behaviors• Curriculum materials• Sponsors Include

– Cooperative State Research, Education & Extension Service

– USDA– Credit Union National Association, Inc.– America’s Credit Unions

America’s Promise Alliance

• Teach middle school and high school students about financial responsibility

• Set of curriculum materials• Founded in 1997

– General Colin Powell is the Chairman– Partnership of over 400 organizations

Federal Government Resources

• U. S. Treasury– National Financial Capability Challenge

(annual)– Educator’s Toolkit

• mymoney.gov

Mapping Your Future

• Budget Tools• Calculators• Show Me the Future Game (geared for younger

students)

Cash Course

• Financial education resources for colleges• Cashcourse.org• Sponsored by NEFE

Other Resources

• practicalmoneyskills.com• financiallit.org• nslp.org• tgslc.org• usafunds.org• mygreatlakes.org

Get Financially Fit

• “How-to” Guide – to develop a financial literacy program on campus

• newyorkfed.org/regional/projects.html• Funding for this project provided by:

– American Council on Consumer Interests– Federal Reserve Bank of New York– Association for Financial Counseling and Planning

Education– Direct Selling Education Foundation

Financial Literacy Education Components

• What is financial health?• Budget tools• Calculators – savings, credit card debt, loan

repayment• Using credit responsibly• Borrowing to finance an education• Setting financial goals• Information about financial institutions, identity

theft, etc.• Assessment tool

An Example: CFNC.org Financial Literacy Tools

Elementary Students – Financial Literacy

• Videos– Goals– Money Grows– Spend or Save

Financial Literacy

• On-line, interactive course• Tools to help you make wise money management

decisions• Calculators • Fact sheets

Building Blocks Of Financial Health

Budgeting 101

• Identify income• Identify expenses• Remember the different types of expenses

– Fixed– Variable– Periodic

• Pay Yourself First!– Funds transfer to a savings account– Payroll deduction– Internet transfer– Envelope method

Budget Calculation Tool

Real World Calculator

Credit Cards - The Good, The Bad, And The Ugly

• When it is appropriate to use credit (for example, an emergency)

• What happens if you only make the minimum payment or run up the balance

• What happens if you fail to make payments• Credit Card Calculator

Credit Report Basics

• Know what’s on your credit report!• You should check it at least ONCE per year!• What creditors are looking for:

-On time payments-Your mortgage payments -Available credit on your credit cards-Total debt outstanding

• Missing even one credit card payment can knock your score down 50-100 points.

Credit Card Repayment Calculator

Investing in Your Education

Education Loan Repayment Calculator

Smart Borrower Calculator

Set Your Financial Goals

Write your goals down!

Additional Resources - Text

Additional Resources - Fact Sheets

Assessment

• On-line test• Certificate of completion

Financial Aid Administrator Access – Master Control Panel Homepage

View Student-Level Detail

• Student name• Login date• Year in school• Percent of material covered• Percent of correct answers• Completion code

Financial Literacy Reports

• Pre-Completion Survey• Post-Completion Survey• Aggregate Usage Data • Easy to use Report Toolbox

On Your Campus

• Consider using a combination of several programs– Some students respond best “in person”– Some prefer working at their own pace on-line

• Integrate financial literacy education into your debt management plan

• Your current financial literacy education activities?

• Your future financial literacy education plans?

Questions?