Financial Literacy
Attribution
College Success by OpenStax is licensed under Creative Commons Attribution License v4.0
College Success by OpenStax
- The following content is derived from the College Success Textbook by OpenStax and is licensed under a Creative Commons Attribution License 4.0.
- OpenStax is part of Rice University, which is a 501(c)(3) nonprofit charitable corporation. Our mission is to improve educational access and learning for everyone. We do this by publishing openly licensed books, developing and improving research-based courseware, establishing partnerships with educational resource companies, and more.
How financially literate are you?
- Check Your Financial LiteracyHow financially literate are you? These questions will help you determine how the chapter concepts relate to you right now. As we are introduced to new concepts and practices, it can be informative to reflect on how your understanding changes over time. We’ll revisit these questions at the end of the chapter to see whether your feelings have changed. Take this quick survey to figure it out, ranking questions on a scale of 1 – 4, 1 meaning “least like me” and 4 meaning “most like me.”
Introduction
In this chapter, you will learn to reach your personal life goals by implementing financial planning and strategies to protect yourself, manage your money today, and put yourself in a better position for tomorrow. How you act today impacts your tomorrow.
By the end of this chapter, you should be able to do the following:
- Align your personal and financial goals through smart financial planning.
- Create a saving and spending plan and track your performance.
- Plan for emergencies.
- Identify best practices and risks associated with credit cards and other debt.
- Determine the best opportunities for you to finance your college education.
- Articulate specific ways to secure your identity and accounts.
Personal Financial Planning
Questions to consider:
- What simple steps do I take to create a financial plan?
- How do I use financial planning in everyday life?
- How is the financial planning process implemented for every purchase?
- If you fail to plan, you are planning to fail.
Savings, Expenses, and Budgeting
Questions to consider:
- How is the flow of money best measured?
- How do I keep things balanced?
- “Do not save what is left after spending; instead spend what is left after saving.” —Warren Buffett
Banking and Emergency Funds
Questions to consider:
- How do I plan appropriately for a financial emergency?
- What do I need to keep in mind when it comes to the banking system?
Credit Cards and Other Debt
Questions to consider:
- What do I need to know about student loans?
- How dangerous is debt?
- What should I think about when getting and using a credit card?
Education Debt: Paying for College
Questions to consider:
- What choices should you consider when taking on student debt?
- How do you match debt to postgraduate income?
- What types of financial aid are available?
- How do you apply for financial aid?
- What are the best repayment strategies?
Defending Against Attack: Securing Your Identity and Accounts
Questions to consider:
- How should you manage passwords and online security?
- What’s the best way to deal with identity theft?
- How can you get help and avoid scams?