PROF ED01 FINANCIAL LITERACY

• Financial Literacy is the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial wellbeing.
• For our purpose, Financial Literacy is the ability of college students to use knowledge and skills to make good decisions related to managing finances.
• Needs are items for survival, including food, clothing, shelter, and medical care.
• Wants are things people desire for reasons beyond survival and basic comfort, including vacations, new car, a large wardrobe, and luxury items.
• Financial Resources are money or other assets used to acquire goods and services, which are often limited and most people do not have enough resources to meet all needs and wants.
• Discretionary income is the amount of money a person can spend after needs are met.
• The number one rule in financial planning is to make a budget and live by it.
• Savings should be a part of your budget.
• Investing is about making your money work for you.
• A budget is a spending plan used to control your money, showing you how much money you have, where it needs to go to meet your needs and wants, when will you reach your financial goal, and savings should be a part of your budget.
• A good starting budget consists of 20% Savings, 50% Needs, and 30% Wants.
• Buy now, Pay later payment schemes usually have hidden charges.
• To avoid scams, follow three basic rules: Think, Examine, Study.
• A common way to manage your savings is placing it in a savings account in bank.