Developing Financial Savviness

Tue, 01 Mar 2022 13:08:04 -0500
freshman, junior, senior, sophomore

We get it: the financial struggle is REAL at times! Taking out student loans, paying bills, managing expenses, and saving money require strategic planning and decision making. Developing financial savviness takes knowledge, but starting now, as a student, can have a life-long impact!

With that in mind, we interviewed Hannah Sadollah, the Programs Specialist for FinancialSmarts @ UMBC (which she'll talk about in her interview), to shed some light on this important topic.

Extra Credit: Why do you think it is essential for college students to build up their "financial savviness" right now?

Hannah: Education is an investment in yourself. College is an experience and an investment, so make sure you get a high return on investment (ROI) or benefit relative to the cost. Your college experience can still be amazing while you become more financially savvy. There are ways to make lasting memories while saving money, and saving money now will seriously impact your future.

College can be stressful; balancing classwork, extracurricular activities, and social life makes it easy to get overwhelmed and stressed out when throwing personal finances into the mix. Becoming financially savvy can help reduce this stress. For example, hanging out with friends doesn't always have to break the bank. The UMBC Student Events Board (SEB) hosts multiple events (online and in-person) every week like; Karaoke Nights, Yoga sessions, or Glow Dodgeball! Another example is FinancialSmarts @ UMBC which hosts events during hybrid Money Smart Week, where students can win prizes just by attending an event. These are great ways to hang out with friends, meet new people, and save or even win money! Try following groups like FinancialSmarts on social media to learn more about their free events.

Extra Credit: What is one financial topic you recommend college students learn more about?

Hannah: Managing money, specifically savings. As a current student, unexpected costs come up all the time. Whether it's an extra book that you need for class or replacing a missing campus ID, it's crucial to prepare yourself for unexpected or emergency expenses.

In January 2019, Forbes reported that 78% of U.S. workers live paycheck to paycheck. This means that these individuals use most of their monthly income on their monthly expenses with no money left over or in savings. This statistic has been exacerbated due to the COVID-19 pandemic. Don't be part of the statistic! Consider the 50/30/20 model when creating a monthly budget. Plan to spend 50% of your monthly income on fixed costs like; rent, groceries, or transportation. 30% on flex costs like; Eating out or going to concerts. And then allocate 20% of your monthly income to savings or paying back debt. This model makes saving and money management seem like an attainable goal and helps you create a plan to achieve it!

Extra Credit: What is UMBC FinancialSmarts, and what has been the most significant way you've seen undergraduate students utilize it?

Hannah: FinancialSmarts @ UMBC provides students with the tools necessary to make informed and effective decisions about their finances. Managing money is an integral part of your daily life, and we encourage students to be well versed in this vital life skill that many find challenging. The most significant way UMBC students engage with our content is by enrolling in the FinancialSmarts CashCourse. This is a free, self-paced, open enrollment blackboard course that allows students to learn about concepts like budgeting, saving, banking, and the working world. Students can find more information about enrolling in the course on our website.

In addition to the CashCourse, we encourage students to attend one of our many events during Money Smart Week. I encourage students especially to attend workshops led by our peer money mentors! These are free, fun, and engaging workshops related to budgeting, saving, banking, and repayment of student loans. Students can find more information about our peer lead workshops on our website. To learn more about these events and Money Smarts Week, please visit the FinancialSmartmyUMBC page.

Extra Credit: What would you say to a student struggling with budgeting their money?

Hannah: Don't give up, nobody's perfect, and we all struggle sometimes. If you're struggling to stick to your budget, try revisiting it and see what areas you might need to tweak to make it more realistic. You can try tracking your spending for a month to see how much you spend in each of your budgeting categories, and that will help you design a more accurate budget for your spending habits. You can even multiply your monthly spending by twelve to see how much you spend in a specific category on average per year! It may change your opinion on the impact of saving money that’s spent on nonessential expenses.

If you're still feeling overwhelmed, check out our CashCoach program. Visit our website to sign up today.

Extra Credit: What is your best piece of financial advice?

Hannah: Keep learning and asking questions. No one person has all the answers, so there's always more to explore and learn about financial literacy. You will go through various seasons of your life where you will need a different set of financial skills, so it's essential to seek trustworthy guidance and leverage the available resources to you now for free as a student.