The 2008 recession was basically the worst financial crisis since the Great Depression in the 1930s. In just over 19 months, the Great Recession wiped out trillions of dollars of wealth, decimated 8 million jobs, and robbed tens of thousands of people of their homes.
More than half of America’s adult population saw a cut in pay or hours, and almost everybody’s wealth fell. Although the Great Recession ended nine years ago, the American middle class is still feeling the effects. Millions of people have remained unemployed for years and millions more have faced huge drops in the value of their homes and face uncertainty about their future.
In fact, America’s family structure was changed drastically due to the Great Recession. Senior citizens were forced to stay in their jobs longer, and young adults were cocooned in their parent’s basements.
Many college students like myself are not nearly as financially literate as we should be at this age. The 2008 Recession has already put us at a disadvantage when we enter the workforce, and our school systems did little to prepare us for the world of finances. Most of us gained the little financial literacy that we have from our parents. In my experience, most of the information told to me by my parents was minimal with little detail.
In my writing of this article, I interviewed one of my peers to further understand how he was introduced to financial literacy. Jaime Mintz, a sophomore, has thought a lot about financial security now that he is in college. I asked him a few questions to try and understand his experiences with finances and money in general.
“I came to college to make sure that I would be financially secure in the future, and would be able to find a job after college,” he said. Though a good job after college can help with finances, Mintz also recognizes the importance of saving money. “Saving money,” Mintz said, “means putting money aside to ensure that I will have a safety net in case any type of emergency happens.”
I made the importance of parental guidance on financial literacy the main point of the interview. I asked Mintz if his parents left him with any tips to remain financially secure. “My parents told me to save, save, save,” he said. “Saving money was how they communicated to me how important money is. They made it known that money didn’t grow on trees, and if I truly wanted something badly, then I would have to save for it.”
I knew that saving would be one of the biggest tips that his parents would offer him, because most parents tell their kids to save money, even at a young age. However, I wanted to dig a little deeper into Mintz’s experience with finances, so I asked him if his parents offered him any other advice other than saving. “No, not really,” he said. “I never really asked them tips on how to remain financially secure.”
My brief discussion with Mintz was very informative on the reality that many of my peers face. We understand that money is a very important resource. However, we don’t understand the lengths that have to be taken to start good financial habitats.
Here are a few tips to get your finances in order before you graduate. First, build a budget. Start with your fixed expenses like your tuition and rent to see how much money you have left over. Then calculate money needed for one-time expenses like books and dorm supplies. Once you have paid those, the money left over can be budgeted for only items that are necessary.
The second tip is to open a checking account with a debit card. The debit card allows you to only spend the money that you have and you won’t build up debt like you might with a credit card.
The third tip is to try and find an on-campus job while in school. This will allow you to have a steady flow of income, which will allow you to practice budgeting.
The last tip is to get a credit card, but to use it wisely. When you’re in an emergency situation, it can be helpful to have a credit card. It’s also a great way to pay off monthly purchases. However, make sure that you do your research on credit cards and pick the card that matches your financial situation the best. Lastly, always be sure to pay off the balance or at least more than the minimum each month, so you don’t end up owing more than the original price of the charges with accrued interest.
Recognizing that college students often need some assistance in understanding finances, McDaniel recently added a new financial wellness coordinator. Julie Weaver, a former financial aid counselor at the College, has served in this new role since October of this semester to help students navigate their college finances. According to a McDaniel news release, the goal of the position is to help alleviate the financial stress of college and help advise students through their undergraduate career. Reaching out to Weaver can also be a good way to become more financially literate.