Personal Finance: The Basics

Personal Finances

Learn how to make the best financial decisions for you!

1. List Your Income

2. List Your Expenses

3. Subtract Expenses From Income

4. Track Your Transactions

5. Make a New Budget Before the Month Begins

Be sure to TRACK your spending and adjust the budget as needed!

Budget

The top-rated budgeting apps of 2024

Student Loans

How Student Loans Work

Application Process: Students apply for federal student loans by completing the Free Application for Federal Student Aid (FAFSA). Private loans often have a separate application process.

Disbursement: Once approved, the loan amount is disbursed directly to the school, covering tuition, fees, and other eligible expenses.

Repayment: Repayment typically begins after graduation, withdrawal from school, or when the student drops below half-time enrollment. The terms and conditions, including interest rates and repayment plans, depend on the type of loan.

Interest: Federal loans have fixed interest rates, while private loans may have fixed or variable rates. Interest may accrue while in school, and the borrower is responsible for repaying it.

Student Scholarships

How Student Scholarships Work

Application Process: Students interested in scholarships typically need to complete an application. The requirements and application process can vary widely, depending on the scholarship provider. Applications may include essays, letters of recommendation, transcripts, or evidence of specific achievements or skills.

Eligibility Criteria: Each scholarship has specific eligibility criteria that applicants must meet. This can include academic achievements, financial need, participation in certain activities, or belonging to a specific demographic group. Some scholarships may be open to students pursuing specific fields of study or careers.

Notification and Acceptance: Scholarship recipients are typically notified by the scholarship provider. Notifications can be sent via email, mail, or through an online portal. Once selected, students may need to formally accept the scholarship and provide any additional information required by the provider.

Use of Funds: Scholarship funds are generally applied to educational expenses, including tuition, fees, books, and, in some cases, room and board. Some scholarships provide funds directly to the student, while others disburse funds directly to the educational institution. Unlike student loans, scholarships do not require repayment.

Credit Cards

How Credit Cards Work

Credit Limit: Every credit card has a credit limit, which is the maximum amount you're allowed to borrow. The limit is determined by the card issuer based on factors like your credit history, income, and other financial information.

Making Purchases: You can use a credit card to make purchases at any merchant that accepts that particular card. This can include in-store transactions, online purchases, and other forms of payment.

Billing Cycle: Credit card transactions occur within a billing cycle, typically a month. At the end of each billing cycle, the card issuer generates a statement that details all transactions made during that period.

Minimum Payment: The credit card statement will indicate a minimum payment amount. This is the smallest amount you're required to pay by the due date to keep the account in good standing. However, paying only the minimum can result in accruing interest.

Factor in utilities and other related costs when budgeting for rent.

Utilities

Be sure to search for affordable housing options.

Be sure to understand your lease agreement before signing.

Rent

Rent & Utilities

Financial stability is influenced by how effectively one manages their finances. Budgeting, saving, investing wisely, and making informed financial decisions are crucial components of maintaining stability, regardless of income level. Additionally, adapting financial habits to changes in income, such as raises or career transitions, is essential for long-term financial success.

Benefits of Having a Job

Job

Government Websites: MyMoney.gov | Federal Student Aid (studentaid.gov)

Nonprofit Organizations: National Endowment for Financial Education (NEFE) | Jump$tart Coalition for Personal Financial Literacy

Financial Institutions: Many banks and credit unions offer educational resources on their websites, including articles, calculators, and tools to help individuals manage their finances.

Educational Platforms: Khan Academy - Personal Finance | Investopedia

Books on Personal Finance: "The Total Money Makeover" by Dave Ramsey | "Your Money or Your Life" by Vicki Robin and Joe Dominguez

Podcasts: "The Dave Ramsey Show" | "BiggerPockets Money Podcast"

Government Financial Agencies:
U.S. Securities and Exchange Commission (SEC) - Investor.gov | Consumer Financial Protection Bureau (CFPB)

Online Courses: Coursera and edX:

Credit Bureaus: AnnualCreditReport.com: Allows individuals to access their free annual credit reports from the three major credit bureaus.

Financial Literacy Apps: Mint | Acorns

Remember to verify the credibility of any resource you use, especially when it comes to online platforms and apps. Financial literacy is an ongoing learning process, and utilizing a combination of these resources can help individuals build a strong foundation for managing their finances effectively.

​Financial Literacy

Knowledge Check

Let's see what you remember!

Multiple Choice

What is the correct sequence for creating and managing a budget?

• List Your Expenses, Subtract Expenses From Income, Make a New Budget Before the Month Begins, Track Your Transactions, List Your Income

• List Your Income, List Your Expenses, Track Your Transactions, Subtract Expenses From Income, Make a New Budget Before the Month Begins

• Track Your Transactions, Make a New Budget Before the Month Begins, Subtract Expenses From Income, List Your Income, List Your Expenses

• Make a New Budget Before the Month Begins, List Your Expenses, Track Your Transactions, List Your Income, Subtract Expenses From Income

Multiple Choice

Why is it important to track your spending and adjust the budget as needed?

• Tracking spending helps you spend more without worrying about the budget.

• Adjusting the budget allows you to stick to a fixed plan, no matter what.

• Tracking spending helps identify patterns and areas where adjustments may be necessary.

• Adjusting the budget is unnecessary if your income remains constant.

Open Ended

Discuss the implications and potential consequences of consistently making only the minimum payments on a credit card.

Poll

Which specific personal finance topic did you find most valuable or impactful for your financial knowledge?

• Budgeting

• Student Loans/Scholarships

• Credit Cards

• Rent/Utilities/Job