Proper managing of finances can help students learn more about the value of money and gain money-management skills. Out of the 50 states, North Dakota was ranked 4th on a financial literacy assessment, as 55.5% of its respondents claimed that they had an emergency fund. There are many ways to increase financial literacy in students to help them manage their money today and throughout adulthood. With this, the public values the importance of financial literacy before pursuing higher education.
Pay Debts Off Early
The main purpose of student finance education is to help the young generation become successful without the ties of debt. The first step in repaying student loan debt is knowing exactly what you owe, which are private, and the interest rate for each loan. If you've borrowed money to pay for school, there are ways to pay off debt easier. Consider making monthly payments toward the total amount or at least the interest due during your grace period. If you need flexibility, consider an income-driven repayment plan that calculates your monthly payment based on your household size and income.
Students Should Prioritize Saving
While retirement is far from now, students should prioritize becoming debt-free and saving money. These are vital parts in life and saving early can help them gain money-saving skills that they can use through life. Students may work on this principle in the basic sense, for example, saving money for high-ticket items they want to buy. Students must understand the value of saving money and paying for essential things because there will always be bills to pay. The qualities to master the savings skill set of students come with patience, diligence, and practice, ultimately giving them peace of mind. The goal is to save money now and use skills that their old selves would thank them later.
Build Up Investments
Students need to know the difference between saving money in a bank and investing. They should also know the value of an index fund, mutual fund, and stock. This is where financial education comes in. Planning for retirement early will also help them meet their goals. One way to engage young adults is to connect finance education with the money decisions they are making. Students may have allowances and jobs and need to decide regarding college savings, shopping, and car insurance. People who've received financial education during high school claimed to have higher savings and net worth when they reached their 30s. With this, educators have a big part in tying financial education to the decisions that students face daily, which will impact on their future in higher education.
Applications In Daily Lives
When gaining financial skills, there are certain things that students can apply to their everyday lives. One crucial lesson that students must learn and apply within themselves is to differentiate their financial needs and wants. For example, students can talk about establishing a budget with their parents, or how to save money by saving energy in their household, reduce costs on monthly bills, groceries and more.
Learning proper personal finance will have a significant effect on the life of a young adult. It is vital to make the right choices early on, as it could mean the difference between struggling in debt at a young age or having a good work-life balance.
