Entering college is an exciting part of every student’s life. It is the start of the journey toward academic progress, independence, and self-growth. However, in this excitement, many students forget the important part of this journey, which is financial literacy.
Despite all the charms of college life, students often feel stressed about managing their finances. Therefore, it is important to understand financial literacy for college students so they can manage their money effectively and overcome financial challenges.
In this article, we’ll share the importance of this finance subject for students. But first, let’s get to know what financial literacy is about.
Table of Contents
What is Financial Literacy?
Financial literacy is information about various financial tools, practices, and concepts that assist individuals in making informed decisions about their finances. This subject encompasses many money-managing topics such as savings, investing, budgeting, borrowing, or planning. Moreover, this knowledge helps individuals navigate the complex world of finance and make good financial choices that meet their goals.
Why is Financial Literacy Important for College Students?
Financial literacy equips students with the essential life skills that enable them to manage their money effectively throughout their lives. Additionally, with this knowledge, students learn budgeting, which assists them in managing their tuition fees, accommodation expenses, and everyday costs while saving them from overspending.
If you are a student and want to enhance your knowledge of financial literacy, you can opt for this subject. However, finance is an energy-draining subject, and sometimes, writing an assignment on this subject can be challenging for you. We recommend you ask professionals to write my assignment to overcome this challenge.
8 Reasons to Teach Financial Literacy to College Students
Financial literacy is like a roadmap to navigate the complexities of financial challenges. It empowers students to manage their finances themselves and become financially independent. In this section, we’ll share the top 8 reasons to teach this subject to students during their college life. Before jumping on them, first, read some core highlights of the subject matter.
Points to Remember:
- With financial literacy knowledge, students can make informed decisions about their budget and savings.
- This subject matter lessens the chances of being the default and draws a line between needs and wants.
- Students get financial independence and avoid scams when they understand this concept.
- To become financially successful, students need to learn financial literacy skills.
The reasons to teach this subject to learners in college are:
1. To Give Them Financial Knowledge
It goes without saying that most college students don’t have elementary knowledge of financial concepts such as student debt or loans. They even don’t know the answers to basic questions like:
- How to create an emergency savings account?
- How to craft a student budget?
- What is the procedure for tax filing?
- What is the interest policy on an ATM card?
Every student should know the answers to these basic questions but unfortunately, they don’t. That is where financial literacy comes into play which provides the essential knowledge and training to manage finances effectively. With this subject learning, students also get to know about health insurance and loans that are necessary for successful student life.
2. Reduce Loans Defaults Chances
The Education Data Initiative revealed some striking facts in its report about student loans. According to iGrad for Schools:
- In the first year of the loan repayment, almost 10% of the graduates defaulted.
- 75% of students usually make one late payment in the five-year repayment period.
- 20% of graduate students neglect the repayment of their loans.
The main reason for these delinquencies is that most students are unfamiliar with loan policies. It is commonly observed that students who are involved in any financial subjects pay their loan instalments on time, and there is a lower chance of defaulting.
3. Lessen Financial Anxiety
Needless to say, if students are unable to manage their budget and fulfil their expenses then this will eventually bring out stress to them. This stress further leads to many other issues such as insomnia, poor academic performance, stomach problems, and low self-esteem. Ultimately, these issues become a reason for bad grades and higher dropout rates.
Giving education on financial literacy to college students enables them:
- Keep a check on their spending, which empowers them to manage their budget without any stress.
- With financial literacy, students can pay their credit card bills timely, saving them from falling into any financial debt.
- With emergency savings funds, students can reduce their stress levels.
4. Differentiate Between Needs and Wants
It is hard for students to differentiate between their needs and wants. They often confuse these terms and fall into the trap of financial crises. Our needs are food, clothes, and other living essentials, while what we want can include a brand-new phone, a summer vacation, an exotic dinner, and more.
Financial literacy tips for college students highlight the difference between their needs and wants, eventually saving them from financial debt. Teachers often assign homework using financial literacy tools to students so they understand it better. However, for some students, it is difficult to understand the numbers. They can get assistance from professional assignment writing agencies in the UK to make this academic task effortless.
5. Help in Decision Making
During college life, students have to make many decisions and making financial decisions is most important for them. They have to know how to save money, where to spend, what is preferable and what’s not. To make the right decision about all of these, they have to know the financial literacy concept.
This subject matter equips them with the knowledge that guides them on how to manage their money. Furthermore, this will aid them in how to make the budget, where to invest, and how to manage their debts. In a nutshell, financial literacy for college students reduces the chances of impulsive spending which ultimately saves them from potential financial crises.
6. Practise Financial Independence
Everyone wants freedom in their financial decisions and when we talk about college students then they want this independence more than anyone else. It is alluring for them to make their decision without the interference of anyone.
To help them out, some mobile applications are being introduced with the Smart Card Cash. These applications are designed to empower students to make their own decisions while spending their money. Furthermore, students get financial skills by knowing what to purchase or how much money they should spend. Teachers often conduct financial literacy activities for college students that polish their finance managing skills.
7. Avoid Scams
In this digital world, where everything has been shifted online, students are now more vulnerable to cybercrimes. Cybercriminals mostly target students to access money because most of them are unaware to avoid these scams. Knowledge of financial literacy enables students to avoid these scams by teaching them how to protect their online financial accounts and encrypt their passwords.
Further, with this subject matter students learn the danger of opening suspicious links from unknown sources. They also gain savvy consumer attitudes and ask questions when buying anything from online platforms. This inquiry lessens the risk of potential online scams that can put them in financial instability.
8. Make Financially Successful
Financial success is not about getting enough money for expenses but it is determined by how successfully a person can manage and control his expenses. Financial literacy is an essential skill to make college students financially successful. This skill enables them to learn how to manage their expenses and get financial stability during their college life.
For instance, if a student eats out thrice a week during his whole four-year journey, then it will cost $8000. Undoubtedly, this is a considerable cost for students and can put them in debt. When they enter their professional lives with this debt, they are ultimately unable to make sound choices for their career.
As you have learned about the reasons for teaching financial literacy to college students, we hope you understand it well. With the help of all these reasons, you can definitely write well on such topics. However, if you face any difficulty in writing your financial literacy homework, you can buy an assignment online from legitimate writing firms.
Take Away
In conclusion, it is important to learn about financial literacy for college students as it is the fundamental step toward financial independence. The knowledge of this subject matter empowers students to manage their budget effectively which will also help them in their practical adult lives.
In this article, we have discussed some reasons to teach financial literacy which every student should know. These reasons include getting financial literacy knowledge to make informed decisions, drawing a line between needs, avoiding online scams, and achieving financial success.
