Financial literacy refers to learning and implementing a variety of financial skills that empower you to make responsible decisions with your money.
At the core of financial literacy is an appreciation for the value of your hard-earned dollars and an understanding of the risk factors that can lead to the loss of the money you earn.
Being financially literate allows people to use money as a tool for creating a better future for themselves and their family while resisting the urge for instant gratification. It also entails an understanding of the consequences of mismanaging money.
If you’re like most college enrollees, you’re probably looking to go back to school to pursue a career that will both interests you and allow you to earn more money. While earning a college degree can open doors to many interesting and financially rewarding job opportunities, not knowing how to manage your finances can make your academic efforts futile or even counterproductive.
Why Financial Literacy Matters in and out of College
When people don’t know how to manage their money, they typically end up wasting a lot of it on things they don’t need while neglecting to save for emergency expenses, college or retirement. Spending money on superfluous things you enjoy isn’t inherently bad. What gets people into trouble is usually financing nonessential purchases with credit and failing to pay them off, after which they can become buried in interest.
Estimates suggest more than 60 percent of Americans live paycheck to paycheck and have no money left over to save. Many people who live without a financial safety net are doing the best they can with the income they’re able to earn, but there’s also a large contingent of those who have made avoidable mistakes due to financial illiteracy.
If you’re thinking about going to college or have already enrolled in a program of your choice, congratulations! You have made the first step toward creating a better future for you and your loved ones.
At this point it may be in your best interest to take stock of your financial situation so you have a clear plan on how to support yourself and your family while attending college. The financial skills you develop and hone during your academic journey, paired with your hard-earned degree, will help you achieve a secure and financially balanced future.
Increasing Financial Literacy as a College Student
As a college student, you will likely be responsible for paying for your education. Tuition can feel discouraging, which is why it’s useful to remind yourself that tuition is a financial investment, not a money-gobbling black hole.
A clear-headed acknowledgement and understanding of the high cost of school is good in the sense that students who truly appreciate the gravity of this financial commitment are more likely to devote themselves to study.
Grants and Scholarships
There are numerous institutions, companies and private parties donating money for education. Both grants and scholarships are considered educational gifts. The difference between the two is that grants are given based on financial need, while scholarships are usually awarded based on academic, athletic and artistic achievements. Many grants and scholarships have strict deadlines and are awarded on a first-come, first-serve basis to applicants who meet the necessary requirements.
Get in touch with your school’s financial aid representative to learn more about grant and scholarship offerings.
Students who serve or have served in the military and their dependents are usually eligible for various academic financial benefits as well as on-the-job training. Whether you’re a service member, veteran, military spouse or the child of a servicemember, you may have access to generous tuition assistance that can help pay for your education.
Employee Tuition Reimbursement
Some employers offer employee tuition reimbursement, which means they help pay for some or all of your tuition costs. In many cases employees are reimbursed after they have paid for classes.
There are usually certain stipulations. Your employer may only reimburse you if you’re pursuing a degree related to their industry. You might also be required to work for the company for a specific number of years after you graduate. Failure to do so may result in you needing to pay your employer back.
While some companies do offer tuition reimbursement for altruistic reasons, there are also real financial benefits for them as well. For example, they can deduct a significant amount from their taxes for each employee they reimburse for continuing education.
If you’re looking to pursue a career in a particular field, such as healthcare or education, consider working for a company that will help you cover college education costs related to your area of study.
Good Habits of the Financially Literate
Improving your financial literacy isn’t as hard as you might assume. It doesn’t require you take a lot of accounting or finance classes. There are countless free resources online that can help you make better financial decisions.
There are a handful of things nearly every financially literate person does. Even if you’re not intimately familiar with financial best practices, you can start adopting some of these habits to live a less stressful life with fewer debts and more peace of mind. These financial literacy steps include:
- Budgeting: Planning your expenses and spending less can help you save money and break the cycle of living paycheck to paycheck. While this may seem obvious, a surprisingly small number of people actually take the time to add up all their expenses and make a conscious decision to cut costs and control their spending.
- Open a savings account: It’s a good idea to put money in a savings account that you don’t touch unless there’s an emergency, such as unforeseen medical bills or car repairs or loss of income. It’s a good idea to have an emergency fund in addition to your other savings, like a 529 education savings plan, Roth IRA or 401(k).
- Pay off debt: Pay off your high interest debt or speak with your local bank or credit union about consolidating high interest debts into a lower interest personal loan. Interest is often crippling for people who are struggling with seemingly insurmountable debt. Finding ways to reduce the amount of interest you’re paying each month is likely your best path towards becoming debt free.
- Reduce spending: Fight the urge to spend money on items you want but don’t need, such as clothes, makeup or electronic devices. Try to cook your meals at home instead of eating out. Look for opportunities to buy used instead of new. These seemingly insignificant changes can add up to significant savings in the long run.
- Investing in retirement: Invest in a retirement savings plan, like a 401(k) or Roth IRA, as early as possible. If you invest in an employer-sponsored plan your contributions are typically automatically withdrawn so you don’t have to make a conscious effort to put a percentage of your income aside for retirement purposes. Wisely invested dollars you save at a young age can potentially experience massive compound growth over decades, so the sooner you start the better.
Explore Your Financial Aid Options While Pursuing a Degree in Healthcare
At the St. Louis College of Health Careers in Missouri, we help students from all walks of life pursue a rewarding career in ever-growing healthcare fields. When you choose to study at SLCHC, not only are you getting an exceptional healthcare education, but we’ll also assist you with exploring and applying for various financial aid options.
To learn more, call 866-529-2070 or send us a message.