K-State programs look to provide solution to lack of financial literacy

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Stability. That’s the word that Brandon Jacobs, senior in finance, would use when describing what being financially literate gives him.

“It opens up so many doors and helps you make logical, informed decisions,” Jacobs said.

Being financially literate is described by the National Financial Educators Council as, “possessing the skills and knowledge on financial matters to confidently take effective action that best fulfills an individual’s personal, family and global community goals.”

A 2009 study conducted by the Financial Industry Regulatory Authority’s Investor Education Foundation found that fewer than half of Americans could answer two basic questions about inflation and interest rates. A 2010 study conducted by Northwestern Mutual insurance group backed up this statistic — more than two-thirds of Americans surveyed flunked a financial literacy quiz.

The lack of financial knowledge is a dangerous status quo for American society to accept, and, according to Tomaz Bogovic, peer financial counselor for K-State’s Powercat Financial Counseling and senior in economics, this lack of knowledge can drastically affect lives of young Americans.

Being financially literate is very important to our everyday lives, because financial issues are often accompanied by stress and relationship issues,” Bogovic said. “Early adulthood is very important to our overall financial health, because often, financial issues later in life stem from actions in the past.”

As an effort to make these topics more of a priority for Americans, the U.S. Senate officially declared April as National Financial Literacy Month in 2004, as a way to encourage Americans to continue to learn about financial issues.

According to Jodi Kaus, director of PFC, the issues that most students struggle with concern student loans, credit and personal budgeting.

“As students, you generally have very limited resources, but you have a lot of expenses that you have to take care of,” Kaus said. “That can be very challenging, especially if you are not well-informed about these kinds of problems.”

In 2013, a study done by FICO, the biggest credit-scoring firm in the country, found that the total outstanding student loan debt in the U.S. jumped to $1 trillion. Jacobs, who is set to graduate in May, said that student loans and other forms of debt are one of the biggest reasons that it is especially important for college students to be well-versed in financial concepts.

“Getting rid of debt is one of the most important things for me, because as a finance major I know what holding onto debt can do to you over the long run,” Jacobs said. “But you have to be aware of these facts or they can ruin you.”

PFC provides various personal financial planning tools such as SALTmoney.org, and also holds programs to give students helpful tips to manage their money.

“PFC holds several activities where students can interact with our peer counselors and learn about numerous topics related to personal finance management,” Bogovic said. “Some of our most popular activities are ‘Spring Break Not Spring Broke’ and ‘Marriage and Money’ programs.”

The group also co-hosts speakers to give insight on related topics. For example, PFC was among several groups that brought in Rachel Ramsey Cruze, daughter of well-known money expert Dave Ramsey, to speak about financial management.

Free resources such as these, Bogovic said, could help students understand and become more interested in making sound decisions.

Financial stability can be a great asset, especially because of recent economic instability,” he said. “It can enable us to live full and happy lives.”

Jacobs agreed, saying that although money can’t necessarily buy happiness, financial literacy and knowledge can provide a long-term vision for life and a clear-cut plan of what direction to go in the future.

“Going forward, I know I am going to want to buy a house, start investing in a retirement plan and probably even stocks and options,” he said. “There are so many resources out there, but we as students have to go out there and take advantage of them. The best thing you can do as a student is read, watch the news and stay informed because, when it comes down to it, you can’t count on anybody but yourself.”

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