Transcript Building a Financially Savvy Student

Krissy Bhaumik
Assistant Director for Special Programs and Adjunct Lecturer
University of Michigan
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1 credit seminar course
Open to all undergraduates
Part of “Sophomore Experience” workshop series
Pass/Fail grading
Duration…depends on term but advocate for 16 weeks
Enrollment…depends on term but typically 20-35
Mostly word of mouth promotion, but some OFA flyers
and adviser recommendations
Students
Dean
Committee
OFA/Krissy
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Very short timeline from conception to first enrolled student
• Approx. 4 months
• If you name it, the content will come…
• Syllabus developed in 48 hours.
• Instructor hired after that.
• Total freedom with content and format.
“This one-credit course is designed to provide students with knowledge
and practice in financial literacy. Students in the class will develop skills in
managing money, making choices, and planning for the future, including:
safe and smart use of credit and debit cards; developing personal monthly
budgets and financial self-assessments; leveraging the financial aid and
scholarships; and funding study abroad, spring break, research, and
internships.
Student learning in the class is grounded in: economic history, for
understanding how family and personal wealth is accumulated across
generations; educational policy studies, for the evolution of federal and
state aid for higher education, scholarships and loans; and behavioral
psychology and behavioral economics, for insights into how individuals
make choices about money and their futures.”
• Administration’s Goals (in my estimation)?
 How do best we enroll students, deliver solid content and
produce a great press release?
• Instructor’s Goals?
 What does financial literacy mean?
 How is this different than a personal finance course typically
provided in College of Business?
 What do I think is important for a financially savvy student to
know?
• Student’s Goals?
 What will students enrolling in the course hope to get out of
the content?
“Now that you are at university, you have a lot of important decisions to make. Classes,
homework, social engagements, and friends are competing for your attention, your
time, and your energy. Underlying it all is your financial ability to support your
commitments. Are you prepared? Do you know if you have enough money to buy your
books for class and your coffee tomorrow morning? Have you thought about how much
a study abroad trip will cost you and what you need to save now to make it happen?”
Core Principles:
• Knowing how to manage your money, identify your goals and take steps to make
them happen are key to being financially savvy as a student.
• Knowledge and practice in financial literacy. You will work on developing skills in
setting financial goals, budgeting, financial self-assessments, leveraging resources,
safe and smart use of credit (and debit) cards, and avoiding financial hazards.
• Content is grounded in the broader frameworks of economic history, education policy
studies and behavioral psychology to name a few topics. There are no exams in this
class, so your grade will be based on your demonstrated engagement with the
material.
A financially savvy student doesn’t just understand
why and how to make healthy personal financial
choices, they see how those choices fit into the
larger picture, they practice those choices daily and
they help others in their families and communities
to cultivate financial wellness.
• Grading – Pass/Fail (for now…)
 10% Outside event participation
 15% Class participation
 35% Group project
 40% Weekly journals
• Pedagogy
 Lecture and discussion to deliver content
 Journal engagement to engage with content
 Group activity to teach content to others
 Outside activity participation to emphasize continued
learning
So, what is the content?...
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Needs and Wants
Setting financial goals
Budgeting and spending plans
Spending self-assessments
Banking basics
Saving and investing
Tax basics – what every
working student should know
• Leveraging student-based
resources
• The psychology behind saving
and spending*
• Intergenerational wealth
accumulation*
• Evolution of student financial
aid, a policy perspective*
• Financial hazards
• Credit basics, uses,
management*
• Loan repayment
• Financial life after school
• Primary materials
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Reading materials
YouTube
Infographics
• Supplemental reading
• Target audience considerations
• College students
• Need-blind format
• Not “counseling” session or workshop
Coursework Examples
Inspire
Save and
Invest
Budget
Organize
Set Financial Goals
• Fundamental Truth – Dreams are possible if you are
savvy about managing your money.
• Understanding is the first step
• The process:
• Set a goal
• Develop a plan
• Take action
• Prioritize
• At stake: money, time, energy, family, friends
Specific
Measurable
Attainable
Realistic
Time bound
Be clear in what you want.
Set a specific dollar amount.
Think seriously: wants vs. needs
Don’t sabotage yourself.
Start the countdown.
SMART Goal
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Not SMART
I want to go to Panama City for Spring Break.
I want to go somewhere fun over Spring
Break.
I’ll need $150 for my share of the hotel room
for the week.
I want to save a bunch of money so I can have
fun on the trip.
I’ll split the driving with my friends and take
$200 more for gas, food and other spending.
I want $500 to fly there and $700 for
spending money.
I’ll save $60 a month from my paycheck for
the next six months.
I’ll go to the casino each month until the trip.
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I want to save all the money by March 1, 2014.
I want to save all the money by spring.
Goal
SMART or Not
I want to study abroad next year.
I want to study abroad in Florence for the 2014-15 academic year.
I’ll need $3000 for spending money while I’m there for the year.
Not
SMART
SMART
I want to have fun, so I need to save a lot for the trip.
I’ll live in provided housing, use public transportation and take advantage
of student discounts to keep my costs down. That way, I can spend $500
a term on “fun” trips while I am there.
Not
SMART
I may not be in Europe again, so I will take advantage of my time abroad
and travel to a new city every weekend while I’m there.
Not
I will go to the casino every other week to win my spending money for
the trip and will borrow for everything else.
I’ve spoken with Financial Aid and a combination of scholarships, grants
and loans will meet my mandatory program costs. I’ll save $100 a month
from my paychecks for spending money while I am there.
Not
SMART
I want to save all the money by the end of summer.
I want to save all of the money by July 1, 2014.
Not
SMART
• Map out what you know
 One time income
 One time expenses
• Take care of “mandatory” costs as soon as you can.
• Casual spending is a significant factor in sticking to
your budget.
• Keep it simple.
Financial Aid for this term:
$3,600
(after tuition was deducted)
Plus other anticipated income
+ $2,800
(from job, savings, parents)
Total Income for the term:
$6,400
Books and course packs:
Supplies/copies/fees:
Housing:
$500 x 4 months =
Heat / Electric:
$125 x 4 =
TV/Internet:
$50 x 4 =
Cell phone:
$55 x 4 =
Furnishings/Electronics:
Visa:
$50 x 4 =
Travel:
Emergency fund:
1 TERM’S EXPENSES TOTAL:
$600
$80
$2,000
$500
$200
$220
$200
$200
$600
+ $200
$4,800
•Income for term:
$6,400
•Less expenses for 4 months:
- $4,800
•Spending money for a 4 month term:
$1,600
$1,600 16 weeks = $100.00/wk
What does this need to cover?...
Food, laundry, gas, gifts, clothing, sports, entertainment,
Netflix, haircuts, iTunes, etc..
Step 1: Plan it
• Smartphone App (like Mint, My Student Budget Planner,
moneyStrands or others)
• Excel
• Notebook
Step 2: Stick to it
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Cash method
Envelope method
Checkbook register
Notebook
• Overspending is the easy choice. Even if you can “afford” it,
should you do it?
• Pressure can sneak up on you. Dinner? Movies? Mall? Blown
budget?
• Tips…
• Eating out or staying in? A little of both please.
• Iron chef, College Challenge
• Make vacationing a goal and talk about it
• Be a generous friend, but set the boundaries early
• Be a leader in financial savvy
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Parking tickets and legal fees
• Add up quickly.
• It is far easier to avoid them in the first place.
• Unplanned pregnancy
• Average prenatal/post-partum care: $2,000
• Average cost of delivery: $5,000-$25,000
• Average cost of “essentials” in first 30 days: $500-700
• Average cost of child care in Ann Arbor: $1,200/mn
• Sending money home
Start!
Doesn’t have to be much.
Doesn’t have to be complicated.
Just has to be SOMETHING.
Prior to completing this journal assignment, please read:
 “40 Money Management Tips” – Tips 1-6, 14-23 and 26-31
 CashCourse – “Getting Started with a Budget” (in Budgeting and Financial Planning
section)
• Create a personal spending plan. Use any method that makes sense to you, but write
it down. Examples of tools: CashCourse Budget Wizard, Excel Spreadsheet, pen &
paper, smart phone app (like Mint, My Student Budget Planner, moneyStrands or
others).
• Looking at your spending plan, answer the following questions:
 Was it easy or difficult to develop? Why?
 How will you keep track of your spending over the next 30 days? Be specific.
 What budgeting method will you use to stay on track and why?
• Set time bound parameters for evaluating your spending over the next 30 days.
 How often will you record your income and spending?
 How often will you balance your accounts?
 How often will you review your spending to see if you are working towards your
goals?
1.
What were your SMART financial goals from Journal #2? Restate them and
reflect on your progress (or plans for progress) to meet them. For example,
were they as SMART as you originally thought? Have you revised them at all
during the last 12 weeks? What do you see as the main value of having
clearing outlined financial goals for a financially savvy student?
2.
Journal #6 last month gave you an opportunity to reflect on your successes
and challenges of being a financially savvy student. Since that time, what
has changed if anything in your personal life using the techniques we have
developed this term? What do you plan to work on even after class is over?
3.
What does it mean to you to be called “a financially savvy student” or to call
someone else “financially savvy”?
Fall 2013 – enrollment 23 students (10 freshman, 5 sophomores, 2 juniors, 6 seniors)
• Students in LSA, Art and Design, Engineering and Nursing
• Course filled within first 3 days of enrollment. Went to waitlist during add/drop to finalize numbers. Limit
on enrollment was 24 students.
Winter 2014 – enrollment 28 students (1 freshman, 11 sophomores, 9 juniors, 7 seniors)
• Students in LSA, Engineering, Business and Kinesiology
• Course filled within first 2 days of enrollment. Went to waitlist during add/drop to finalize numbers. Limit
on enrollment was 30 students.
• Course promoted through LSA Sophomore Initiative beginning in the Winter 2014 term. The Initiative
includes small seminars that span multiple disciplinary perspectives and emphasize hands-on experiential
learning to showcase how the liberal arts really work. As such, 8-10 seats are reserved for sophomores
each term.
Fall 2014 – enrollment 20 students (1 freshman, 8 sophomores, 5 juniors, 6 seniors)
• Students in LSA, Engineering, Business and Kinesiology
• Course filled within first 3 days of enrollment. Went to waitlist during add/drop to finalize numbers. Limit
on enrollment was 24.
• Remains part of Sophomore Initiative
Winter 2015 – current enrollment is 32 students (0 freshman, 17 sophomores, 9 juniors, 6 seniors)
• Students in LSA, Engineering, Business and Kinesiology
• 7 currently waitlisted. I have typically given permission for 2-4 students from the waitlist to enroll.
• Limit on enrollment is 35.
1. Pre-course and post-course surveys
• Judge confidence, expectations and satisfaction
• Paper and/or SurveyMonkey
2. Journal entries
• Personal reflections
3. Group projects
• Topics identified as important to teach others
• Games for pre-college students
• Things they wished they knew at 17yrs old
• More revealing about what they think is important than
anything else.
What topic in this course did you find the most valuable? Why?
“Making a budget and financial goals because I used this!”
What topic did you find the most unexpected?
“How damn expensive life is.”
“Going forward, I need to be strict with myself and make it
part of my Sunday night routine to put a new $20 in my
billfold every week. Consistency is key.”
“This was a very valuable and informational course. I am
happy we had to make spending plans because I was going
into debt…hahaha. Thank you!”
“Friends are bad news when it comes to my wallet.”
“The techniques I have learned have been more difficult to
implement than I imagined, but I can already tell that I am
being a lot more conscientious about my spending decisions
and staying within my budget goals…”
What does it mean to you to be called “a financially savvy student” or to call
someone else “financially savvy”?
“To me, being ‘financially savvy’ is knowing how to use
whatever budget you may have in a way that best meets your
wants and needs. That is not to say that people should not
spend any money, rather regardless of if you have a large or
small budget, you know how to use that money to achieve as
many of your goals as possible while minimizing the waste of
money.”
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The lack of models for this type of course.
The genuine interest in the course.
Palpable fear of mis-action that leads to inaction.
Importance of being as need-blind as possible.
 Sources of income and financial safety nets may be different for
each student, but the underlying need for prioritizing wants,
identifying income streams, budgeting spending and working
towards financial goals is the same for everyone – as is the anxiety
about these topics.
• Assume NO basic knowledge of personal finance.
• Assume NO basic knowledge of student-based financial resources.
• The prevalence of peer pressure on spending patterns and the
student desire to be able to manage that pressure.
• Identify, collect and/or develop additional materials to use in the
course.
• Multimedia, multidisciplinary
• Engage dynamic guest speakers.
• Refine lesson plans.
• Add sections of the course to increase enrollment.
• Publish articles about course and data collected from students
about the learning experience.
• Spread the word and the model to other schools.
Krissy Bhaumik
[email protected]
(734)763-4119