...Financial Planning and Literacy: A College Student’s Guide The American Dream of the 20th century is considered dead by most of today’s college students and recent graduates who find that getting a job that they are not vastly overqualified for is almost just as difficult as graduating. For those few students who gratefully find themselves at the bottom of the corporate ladder, the next difficult task is appropriately managing their new $45k salary. Financial literacy is defined as “the ability to make informed judgments and to take effective actions regarding current and future use and management of money” (LaBorde, Mottner, and Whalley 2014). Financial literacy and planning have long been considered issues in the US, but more now than ever, in the wake of a recession, they are of critical importance to those entering the work force. My research has led me to make three primary claims: (1) the US is mostly financially illiterate, (2) financial literacy and financial planning are positively correlated, and (3) good financial habits must be developed early. Financial Literacy All of the data supports the claim that a large portion of the US is financially illiterate; also, young adults and college students have even lower levels of financially literacy than the general public. Research indicates that college students today have an exceptionally low level of financial literacy. One financial literacy survey found that only 53 percent of students...
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...The Impact of Financial Education in High School and College On Financial Literacy and Subsequent Financial Decision Making by Lewis Mandell Kermit O. Hanson Visiting Professor of Finance and Business Economics Foster School of Business, University of Washington Senior Fellow, Initiative on Financial Security, Aspen Institute Presented at the American Economic Association Meetings San Francisco, CA January 4, 2009 The Impact of Financial Education in High School and College On Financial Literacy and Subsequent Financial Decision Making Abstract: Many consumers appear to lack the financial literacy needed to make financial decisions in their self-interest. A growing number of analysts and politicians are blaming the intersection of low levels of financial literacy with complex, financially-engineered products for the current economic meltdown and have proposed a number of solutions to this problem. These solutions range from mandatory education in personal finance to required simplification of financial products and greatly increased regulation. This paper examines evidence on the effectiveness of personal finance education on both financial literacy and financial behavior. If the problem can be solved through education, it is likely to reduce the perceived need to limit choice in the marketplace for retail financial products. If education is shown to be ineffective, the future of financial product innovation and financial engineering may be greatly limited. Supporting...
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...Chapter 2 Review of Related Literature This part of the study includes reading in literature and studies which have bearings on the present study. This covers the discussion on the sex, age, program and the financial literacy of STA in terms of savings, budgeting and spending. Financial literacy is mainly used in connection with personal finance matters. The majority of college students do not budget their money. Researchers, educators, and policy makers would generally agree that lack of financial knowledge and skills have contributed to the latest economic and financial crisis (Klapper & Panos, 2011). Hogarth (2002) described the consistencies in behavioral terms, stating that individuals who are financially literate are: 1) knowledgeable,...
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...Determinants of Financial Literacy among Youth: Case of Amritsar City Dr. Arwinder Singh Assistant Professor/Department of Commerce Guru Nanak Dev University Regional Campus, Gurdaspur, Punajb, India #08968092299 arwinder.gndu@yahoo.com Nitika Bhandari (Corresponding Author) Assistant Professor/Department of Commerce Khalsa College for Women, Amritsar, Punjab, India #08146993589 Nitika3088@gmail.com Determinants of Financial Literacy among Youth: Case of Amritsar City Abstract Financial markets around the world have become increasingly accessible to everyone but financial products are becoming more complex and difficult to grasp for an average individual. Therefore it is of paramount importance to equip the Youth with Financial Literacy so that they can manage their own finances and securing their financial future. The present study is carried out with the objective to find out the determinants of financial literacy of the youth. The major determinants that influence the financial literacy are required to be sought in order to deal with the complexities of current financial markets and products. Data has been collected through primary sources by framing questionnaire answered by 100 respondents in Amritsar. Factor Analysis has been used to analyse the data. The analysis revealed five underlying dimensions namely Interest in Financial Issues, Financial Behaviour, Saving habits, Financial Attitude and Financial Awareness. The results...
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...2008 was the public’s overall lack of financial literacy, in addition to unchecked mortgage and investment industries. To fend off further economic mishaps, school districts have been compelled to teach financial literacy. While there is broad agreement on the importance of teaching financial education and capability to children and youth, there is little agreement about what constitutes effective financial education and capability initiatives. Without regulation, curriculum is taught differently in every school and can be outdated and irrelevant when applied to a rapidly changing global economy. Although the concept of Common Core State Standards (CCSS) in education has met with debate, most states have adopted the standards for mathematics and language arts, and require students to think mathematically about real-world issues. Therefore, including financial education within existing Common Core curriculum – rather than a standalone class or graduation requirement – is an appropriate solution to financial literacy concerns in American education. A blending of courses addresses an immediate need, provides readily implementable standardization and establishes funding and research for financial education, using an existing program as a catalyst for change. Resolves an acute need “Financial literacy” was first championed by the Jump$tart Coalition for Personal Financial Literacy in its inaugural 1997 study “Jump$tart Survey of Financial Literacy among High School Students.” In this...
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...The articles “Working Financial Literacy in with the Three R’s,” “Financial Education Leaving Americans Behind,” and “Financial Literacy, Beyond the Classroom” all discuss the pros or cons that taking financial literacy classes have. From my perspective, taking the class should be required because it not only prepares you for life’s demand for money management, but it gives you an understanding of how money and systems dealing with money work as well. In source one, “Working Financial Literacy in the Three R’s” it is stated that college students were more likely to budget and save if they had taken financial literacy classes before. The article goes on to discuss an economic professor at Dartmouth College and his prospective on this topic....
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...Teaching Kids about Money Lionel Z. Gutierrez III Excelsior College Introduction Where has the middle class gone wrong and so far in debt? A constant barrage of ads for products and services, a promise of easy financing, and the "Hollywood" spin on the advertisements all make spending hard to resist. Understandably an individual's attitudes, behaviors, and decisions ultimately affect their financial and social well-being; parents need to take responsibility for providing early instruction on financial literacy and responsibility. Because of gross overconsumption, student loans, and a lack of adequate parental guidance on financial literacy; children are facing a lifetime of debt and little to no understanding of how to handle it. Overconsumption Americans have made some progress, since the financial crisis of 2008, which is considered, by some economists, to be the worst since the great depression (Haverman, 2008). Debt is still nearly double than that of 1989 (Editorial Board, 2015) and private debt overshadows government debt by one hundred and fifty percent (Nutting, 2014). American debt is in part due to overconsumption. Our parents were largely one income families. They lived in modest homes, most drove one car and had minimal educations. Today’s upper class is constantly getting bigger and better homes and cars, and taking lavish vacations, and a strong desire for those amenities has driven some in the middle class to incur unreasonably high debt. Thomas...
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...Students Need Financial Literacy Our economy is a system that produces and consumes goods or services and we, as a society, should carefully manage those resources to the best of our ability. This is where being financially literate becomes valuable because it guides the planning, budgeting, and accounting of all resources. It also provides stability with saving, spending, and debt management. Financial lessons can be useful in other aspects of life, such as, knowing how to prioritize deadlines and making sure to utilize time effectively. These lessons could also assist in saving a relationship or help differentiate between right and wrong, and that is why students need financial literacy. Each state throughout the country has their own policies for integrating financial literacy into their curriculum. However, some states are more superior to others with regards to teaching this topic. Jump$tart Coalition, a non-profit organization interested in advancing financial literacy among students, shows a map of only five states that “Requires at least a one-semester course devoted to personal finance” (Jump$tart). Most schools offer economics, advanced math, accounting, or current events as electives. Yet, many schools disregard financial literacy and it should be considered a requirement because students need to understand the basics of money. They need to understand how it works, the consequences of misuse, and the accomplishment of succeeding. A lot of students have...
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...The financial decisions the students make in universities can significantly affect their financial situation during and after university. These decisions can also affect other aspects of their lives, including their academic performance, health status and future employment Chen and Volpe (1998, 2002). Unlike the previous generations, the youths today are growing up in a culture of debt facilitated by expensive lifestyles and easy credit (Dugas, 2001). The youths being a major consumer market, emerging trends and fashions are some of the reasons the youths have fallen prey of financial mismanagement. A good number of the 21st generation is under influence of expensive purchase as an indicator of conformity to a particular social group or class....
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...Socio-economic characteristics of financially illiterate people To draw out about which people is the most lack of financial knowledge, we turn to an assessment of the data. We briefly review the evidence of age, sex, race, income, employment types, and other factors of interest. * Financial literacy pattern in age Figure A: The financial literacy by age group (percent providing the correct answers to the question) Figure A: The financial literacy by age group (percent providing the correct answers to the question) The survey data confirm that financial literacy is lowest in the youth and the elder. This finding is occurring across countries as shown in figure A. However, it is in our interest that older people give themselves very high scores regarding their own poor scores on basic financial literacy question. In this case, Finke, Howe, and Huston (2011) had developed a multidimensional measure of financial literacy for the old and confirmed that, financial literacy falls with age, but peoples’ confidence in financial decision making abilities actually increase with age. The imbalance between real and perceived knowledge might explained why financial scams are often happened to the elder people. * Financial literacy pattern in gender (Figure B) Not only older men are generally more financial knowledgeable than older women but the same patterns hold across every respondents and countries. Researchers are seeking the explanation of the difference between male...
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...Jackeline Bonilla speaks on how universities are offering financial literacy programs outside of the classrooms. The University of North Texas, The University of South Carolina, and Texas Tech University all offer programs that educate students in topics ranging from budgeting to debt management (Bonilla, May 2013). Although the names of the programs differ, they all serve the same purpose and that’s to start young adults on the smart path to a secure financial future. Not all campuses are offering these types of programs but the students sure could benefit from them. According to Bonilla a 2009 survey by the Center for Economic and Entrepreneurial found “54% of college students had overdrawn their bank accounts and 81% had underestimated the amount of time it would take to pay off a credit card balance by a large margin”(Bonilla, May 2013, p. 8). Because of the scarcity of financial literacy programs, I made the same mistakes as these first year college students. Bonilla suggest such ideas as having financial awareness events or creating a budget workshops for first year students to promote budgeting campus programming boards can promote Financial Literacy programs at those Universities who have yet to get on board (Bonilla, May 2013). I believe it is an excellent idea to have financial awareness programs to teach students to strategies for managing finances. Such programs will definitely help with achieving the financial goals and securities discussed classroom lessons. References ...
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...Should We Have Mandatory Financial Literacy Classes In Order To Graduate? Financial literacy classes would be an excellent idea. In source #4 the article titled Finance Course Prompts Debate, Patricia Hummel states that “Unless this class is mandated, students will not take advantage of the class.” That statement in some ways is highly correct, but the finance class does not have to be mandatory in order for students to take it. In some cases many students want to take the course and get a better understanding of the financial world and should have that opportunity. In source #1 the article from the New York Times “Working financial literacy in with the three R’s” written by Tara Siegel Bernard, Dartmouth College Economics Professor Annamaria...
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...Public Disclosure Authorized WPS6107 Policy Research Working Paper 6107 Public Disclosure Authorized Financial Literacy around the World An Overview of the Evidence with Practical Suggestions for the Way Forward Lisa Xu Bilal Zia Public Disclosure Authorized Public Disclosure Authorized The World Bank Development Research Group Finance and Private Sector Development Team June 2012 Policy Research Working Paper 6107 Abstract Financial literacy programs are fast becoming a key ingredient in financial policy reform worldwide. Yet, what is financial literacy exactly and what do we know of its effectiveness? This paper collects insights from the literature thus far and summarizes global evidence on financial literacy, its correlates, and existing and upcoming causal investigations. The authors conclude with a synthesis of policy advice and practical suggestions for the way forward in this fast growing area of research. This paper is a product of the Finance and Private Sector Development Team, Development Research Group. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The author may be contacted at bzia@worldbank.org. The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development...
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...Financial Literacy Group Project After learning more about financial literacy and managing your money, you will be placed in a group for a group project to research two of the following topics: * Public College or University in the State of Florida * Private College or University in the State of Florida * Public College or University out of State * Private College or University out of State Working together, you and your team will develop a presentation sharing the information you collected and provide insight regarding the financial process students will need to complete to successfully transfer and complete their degree. Note: No two groups can present on the same college Requirements: * Throughout the presentation, each student from the team will be required to present one portion of the topic to class. Each student will demonstrate knowledge of the research, and will present using his/her own words (no reading from index card or PowerPoint/Prezi). An electronic visual aid will be required (a minimum of 6 slides). One “you tube” video is allowed, or create your own (no more than 2 minutes). Each group will be given 15 minutes to present their findings. * Groups must use credible sources (using data bases from Library) and provide a works cited list. Each group will need to answer the following questions in the presentation: * -What is the cost per credit hour for the college or university? Does it differ for in-state or out of...
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...FINANCIAL LITERACY AS A TOOL OF FINANCIAL INCLUSION A SUMMER INTERNSHIP REPORT Submitted by KHUSHBOO VERMA Registration No: 11400462 In partial fulfillment of Summer Internship for the award of the degree of MASTER OF BUSINESS ADMINISTRATION School of Business LOVELY PROFESSIONAL UNIVERSITY Phagwara, Punjab July, 2015 1 ACKNOWLEDGEMENT: I am very much obliged to Mr. Vikram Jain (Chartered Accountant) for his valuable suggestion to take up the project in Appu International Ludhiana. This project report could not complete without the guidance of Mr. Vikram Jain and their timely help and encouragement helped me to complete this project successfully. I am thankful to Vikram Jain for their suitable guidance at every stage of my training. I thanks to Mrs. Rimpy, Sangeeta jangra. And miss. Pushpa Mehta for giving me opportunity to work at Accounts, Records, purchases and sales items maintained of Appu International as a finance trainee. 2 (INDEX):Chapters Name Page No. 1. Executive Summary 7 2. Industry Introduction 8-9 3. Organization Introduction 10-19 4. Literature Review 20-23 5. Introduction To Financial Literacy As A Tool Of 24-33 Sr. No. Financial Inclusion 6. Hypothesis 33-34 7. Research Methodology 35-39 8. Result And Discussion 40-73 9. Finding 74-77 10. Suggestion 78-79 11. Limitation 80 12. Future Scope 80 13. ...
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