Financial Literacy

Growing wealth over the long term through assets like stocks, bonds, or real estate to meet goals like retirement.

Whether earning it or paying it, interest can have a large impact on your finances.

Paying it

If you have a loan, the interest the lender charges is calculated based on the principal balance of the loan plus interest that has accrued since the last payment, creating a compounding effect.

For example, let's say you borrow $15,000 with a 6.75% interest rate and a five-year repayment term. In this case, your monthly payment would be approximately $295.00. The total paid interest would be $2,700. Your total repayment would be about $17,700.

Earning it

On the other side, if you're saving money for retirement, investing $100 per month for 30 years with a 7% return in the stock market would give you a $116,945 investment account balance. But if you wait ten years before you begin, you'd only have $50,754.

Budgeting is the process of creating a plan to know where your money goes.

• Monthly Budget Worksheet

"Live as a college student now, so you don’t have to later."

Consider setting aside part of your income in a savings account and setting limits on non-essential spending. Small, everyday purchases can add up quickly.

For example, your annual spending might look like this:

Daily Beverages:

• Coffee: 4× per week at $2.50 → $520/year
• Soda: 3× per week at $2.00 → $312/year

Food & Entertainment:

• Quick late-night snacks: 3× per week at $6.50 → $1,014/year
• Weekend fun: $25–30 each weekend → $1,560/year

TOTAL YEARLY SPENDING: $3,094

Over four years of college, that’s $12,376—enough to buy a used car.

Keeping this in mind, be intentional about how you choose to spend and save your money. Small changes now can make a big difference later.

Understanding different types of debt (loans, credit cards) and creating strategies to pay them off effectively.

Differences between Debit (my money), Credit (money I borrowed), and Debt (money I owe).

5 tips to manage debt:

• Track your spending
• Prioritize your debt
• Keep good-standing accounts IN good standing
• Consolidate your debt
• Grow your savings

Building and maintaining a strong credit score for better loan terms, based on factors like payment history and amounts owed.

Credit Scores

A credit score is a three-digit number, typically ranging from 300 to 850, that predicts how likely you are to repay debt on time

Credit Reports

A credit report is a detailed summary of your personal credit history, including loan repayment, credit card balances, and payment habits, typically covering the last 7–10 years. https://www.youtube.com/watch?v=HXgMLpc7ivE

What impacts your score?

• Payment History details how you have paid your debt accounts over time, on time, late, missed, and in collections.
• Credit usage, commonly referred to as the credit utilization ratio, is the percentage of your total available revolving credit that you are currently using, such as credit cards or lines of credit.
  • The calculation to find your ratio is: (Total Revolving Balances ÷ Total Credit Limits) x 100 = Credit Usage %
• Credit History, a record of how you manage debt, including credit card usage, loan repayments, and payment punctuality.
• Credit Mix reflects how diverse your credit accounts are. Successfully managing different types of credit shows lenders you’re reliable, and over time, a strong mix can help push your credit score into the excellent range. Two of the main types of credit available are revolving credit and installment credit.
• New Credit (Inquiries), how recently and how often you apply for and open new credit accounts.

Credit Bureaus

• Experian
• Equifax
• TransUnion

https://www.youtube.com/watch?v=HXgMLpc7ivE

• Protect Your SSN: Don't carry your Social Security card; ask companies to use a different number if possible.
• Secure Documents: Shred financial statements, tax forms, and medical bills before tossing them.
• Strong Passwords & MFA: Use unique, complex passwords for each account, and enable multi-factor authentication (MFA) everywhere you can.
• Monitor Accounts: Regularly check bank statements and credit reports for unfamiliar charges or accounts.
• Be Careful Online: Avoid public Wi-Fi without a VPN, use antivirus software, and be suspicious of unsolicited calls/emails asking for personal data (phishing).

Growing wealth over the long term through assets like stocks, bonds, or real estate to meet goals like retirement.

By budgeting your money and understanding where you spend it, you can cut back on costs. For example, if you save money by not buying coffee every day, you can use that money to buy a coffee machine and a good thermos.

Setting clear financial goals (retirement, home purchase) and planning how to achieve them over time.

Your goals may change as time goes by.

Some other resources to look into are:

• 529 Saving Plan
• https://smartwithmymoney.nd.gov/
• https://www.myfico.com/credit-education