Financial Literacy

Budgeting is a necessary skill for navigating life both during and after your time at Grinnell. Creating a budget and implementing skills now will set you up for success as you make the transition from Grinnell to your first destination and beyond. You might even save a little money. 

To get started with the basics, check out this video from Khan Academy. It provides helpful information and reachable steps for students. If you like it, try the whole personal finance video from Khan Academy, check out their other resources, or try courses from LinkedIn Learning. With money matters, it’s especially important to find resources that present information in a way that makes sense to you.

• LinkedIn Learning: Understanding Basics Everyone Should Know
• LinkedIn Learning: Build Your Financial Literacy
• LinkedIn Learning: Budgeting in Real Life

[forage resources]

Ready to implement budgeting into your life? Here’s a budget sheet, [create new budget sheet] ready to print! Of course, there’s also an app!

Action Steps:

• Step 1: Create or print a budgeting sheet to track your incoming income, purchases, and savings. 
• Step 2: Record everything you earn and spend for a month or two. Keeping a clear record will demonstrate to you where your money comes from and where it goes. 
• Step 3: Once you have a clear picture of money coming in and going out, set priorities. Revisit one of the budgeting courses for tips and tricks.
• Step 4: More of a tip then a step: give yourself time and be patient. Creating and implementing a budget takes time and practice. It can be a challenging skill to develop. Everyone learns differently, so start with the basic steps and build from there. By starting early, you’re already one step ahead!

Remember, your expenses will vary based on whether you’re on campus or elsewhere. This budget forecasting tool can help, especially if you’ll be living and working off-campus for a summer or a semester.

Pay Yourself First

Creating good savings habits early in your earning career will manifest healthy bank balances, wise investment strategies, and a comfortable “emergency fund” or cushion as your salary increases. Financial experts suggest that students save 10–20 percent of their income if circumstances allow.

It may not seem like much, but if you work five hours a week at the College’s current rate of $13 per hour, you’re earning around $130 a paycheck. Put $25 per paycheck into savings, and you’re banking $200 a semester. Over breaks, when you’re likely to earn substantially more, you will see your savings grow even faster if you continue to pay yourself 10–20 percent first.

Where do you bank?

Know the differences among banks, credit unions, and online financial institutions and make certain that the places you keep your money fits your needs.

• Banks typically offer more branches regionally or nationally and generally roll out new tech options quickly. Interest rates on savings accounts may be lower while rates for loans may be higher. Watch for fees associated with your accounts.
• Credit unions are generally more local, and as nonprofit institutions have membership requirements. Interest rates on savings accounts tend to be higher and banking fees along with interest rates on loans are lower.
• Online banks and financial institutions may offer high-yield savings accounts in part because they don’t have the overhead costs of brick-and-mortar buildings for their patrons. If you choose to go this route, be certain to understand what restrictions, like monthly withdrawal limits, go with the accounts.

Investing

Building wealth over time often involves making thoughtful decisions about investing. For college students, it’s vital to understand your goals, your tolerance level for investing, and what you can afford. Learn all you can and work with a fiduciary (a trustworthy financial guide not selling you anything) to sort through the options that include putting your funds in CDs, opening an IRA, or investing directly in the stock market. Explore this Roth IRA Calculator to see how your money can grow over time. That should be enough to convince you that investing is worth exploring.

Taxes are a part of life.

Don’t know anything? Start here! This will give you the basic forms and requirements needed in order to file taxes. 

Action Steps:

• Step 1: Check to see if your paycheck has taxes withheld. While you may not have to file taxes (if you’re a dependent earning less than $12,000/year), the government may owe you money if taxes are withheld in your paycheck. 
• Step 2: Make sure you have all your documents ready and in one safe place. For most students, this is the W-2 form. 
• Step 3: Talk to someone who has done it before. Whether it’s your parents, a coach, or an advisor—a good way to learn is to hear someone else’s experiences. They’ll be glad to share their knowledge! 

Want to dig deeper into how taxes function? This “Crash Course: Economics” video explains the tax system and the obligation of students. 

Want to hear straight from the source? Visit the IRS website to find all the necessary information about how to file, where to file, and payment methods. 

Are you an international student? Use this website to learn about the forms necessary and resources available to you when you need to file. 

Need more help? The Volunteer Income Tax Assistance program works with individuals to help them complete the tax-filing process. 

Learn about Insurance

Like taxes, insurance is a part of everyday life. But just what is insurance and who needs it? And when? Check out What Is Insurance?

Khan Academy is extremely helpful in learning about the way insurance interacts with investments. To learn more, check out this link. 

Want a step-by-step guide to health insurance? This link will provide you with the different types of health insurance and how your situation relates to each one. The guide was last updated in 2010, but the general advice and processes remain the same. 

Worried about off-campus living? Use this guide to learn more about renter’s insurance and how it pertains to your life. 

Have a car off- or on-campus? This guide will help you navigate car insurance, discuss what states require it, and highlight best practices for attaining car insurance. 

College students are among the most targeted groups for scams and identity theft. Brush up on best practices to keep your online accounts secure and your identification numbers private.

Password Best Practices

• Never reveal your passwords to others.
• Use different passwords for different accounts.
• Use multi-factor authentication (MFA).
• Length trumps complexity.
• Make passwords that are hard to guess but easy to remember.
• Complexity still counts.
• Use a password manager.

Bank Accounts and Credit Cards

• Check balances frequently.
• Be creative with your security questions.
• Establish several ways of contacting your bank, including knowing how to talk to a real person should the need arise.
• Be cautious about logging in to financial accounts on public devices or via public wifi.
• Keep your electronic devices up-to-date.
• Install malware detection and ad blockers.
• If an offer sounds too good to be true, it probably is.
• Never give your bank account number or credit card number to anyone soliciting the information from you.

The Grandparent Scam and Why You Need a Family Password

Your grandparent or another relative gets a call from someone pretending to be you. The caller claims you’re in a foreign country and have been arrested. The caller then makes a demand that your relative must wire money immediately to get “you” out of the situation and back to Grinnell. If your immediate family has an agreed upon password, the relative receiving the request can ask the person pretending to be you, by name, “What’s the family password?” Make sure the password is easy to remember but unique and unusual. It should not be easily gleaned from other personal information about you.

Loans are helpful for affording an education, a home, or a car. They make seemingly out-of-reach goals attainable. However, loans come with interest that adds up quickly. It’s important to understand the overall cost of repaying the loan plus all of the interest. Use these resources and action steps to begin navigating the world of loans and interest. 

Action Steps:

• Step 1: Be aware of loans you have taken out. Create a document that allows you to track your loans and the interest on them. Microsoft Excel is a great place to put these numbers, and lets you see how much interest is collected over time. 
• Step 2: Look for loans with a low Annual Percentage Rate (APR). (A lower APR will translate to a lower repayment balance over time.)
• Step 3: Make sure to pay your bills on time. Not paying the monthly allotment due on loans will incur expensive late fees and harm your credit rating. 

Want concrete numbers? Use this calculator to find out how to navigate savings, credit cards, and loans. Want advice about loans? Check out this website for advice and even more resources. 

What’s the difference between a credit card, a line of credit, and a debit card? It is incredibly convenient to pay for everything with plastic, or a tap of your phone, but be sure you’re paying attention. Knowing what money you’re spending for which items (see budgeting above) is essential and the beginning of learning to manage your credit card spending. An understanding of credit cards, how to access your credit score, and building a plan to pay off your debt are the most significant skills needed to achieve a balanced, low-stress relationship with your money. The resources below can help you navigate credit scores, borrow on credit wisely, and make smart spending decisions.

Action Steps:

• Step 1: Build foundational knowledge. A lot of this knowledge can feel very overwhelming if you’re trying to learn and implement these strategies at one time. Right now, do some research by using the links above or a quick google search in order to help yourself learn what will be useful. 
• Step 2: Talk to someone! There is no need to go through this process alone or fearfully. Thousands of Grinnell students have had to go through the same exact process. Reach out to a professor, mentor, or advisor on campus to talk through your frustration, hear stories, or to get advice.
• Step 3: Consider a side hustle. Earning a little extra cash now can be useful in the long run. Companies like Lyft, Postmates, TaskRabbit, Nanny.com, and others will allow you to supplement your income or may be the first step to paying off debt. 

Want a whole lesson plan? Use this link to find a more thorough introduction and resources, so you can be well-equipped to deal with credit and debt. 

Want examples of how credit and debt can manifest? The Consumer Education Services, Inc. supplies resources for people deep in debt and educational materials to avoid falling into debt. Their tips range from buying a new car to financial goal setting. 

As a student, paying for college is likely your primary financial consideration. Here are some resources put together by the Grinnell Financial Aid Department. To make an appointment, visit Contact the Financial Aid Team.

• Student Employment
• Budgeting
• Saving Money