The MagnifyMoney team took a field trip from our Manhattan office and traveled to Brooklyn College to present a workshop on how to handle money with confidence. Even though classes have yet to officially start, over 30 students joined us for nearly two hours. Barely 10 minutes into our presentation and suddenly hands started waving around in the air.
We spent our time overviewing what we considered the important financial basics: understanding credit scores and reports, grasping the importance of compound interest, how to budget, paying yourself first, saving for retirement, and picking the right financial products.
The team could barely get through a slide without stopping to answer questions.
We were thrilled to talk about money with such a group so engaged in the topic, but the experience also emphasized how imperative it is to integrate financial literacy into our education system.
All of the Brooklyn College students were there on their own initiative. They weren’t required to attend as part of a class, nor did they receive any type of extra credit. Everyone in the room was simply there to learn and fill in knowledge gaps they may have in their financial lives.
MagnifyMoney Team’s Takeaways
1. Students desperately need financial education
The simple fact that a bunch of college students gave up part of their afternoon during the final days of summer shows just how desperate they are for financial education.
We watched them furiously scribble down notes for two hours and had about half the students stayed back to ask more questions after we’d wrapped up our seminar.
They are undoubtedly interested in getting financial education, but unsure of where to turn. The world of personal finance can be incredibly intimidating without guidance and a way to turn potentially complex topics in laymen’s terms.
2. People need to know you don’t need to be rich to have a good credit score
We noticed this being a problem during our trip to the Chambliss Center, and it was reiterated during our presentation: people believe your financial assets factor into your credit score.
Your credit score doesn’t reflect how much you have in the bank, and people even have high credit scores with thousands of dollars of debt.
The credit score simply reflects your responsibility when handling money from your lenders.
We want everyone to understand this so they can proactively build better credit and therefore set themselves up for protection against high interest rates and predatory lending.
Emergencies will happen. We advocate people build healthy credit so they can acquire protection in the form of a line of credit with a low interest rate (ie: a credit card with a flat 9.99% interest rate). This way they have a place to turn when an emergency happens and won’t be subjected to painfully high interest rates from banks, payday lenders or title loans.
3. Credit can be difficult to understand without proper instruction
Between the fine print, understanding credit scores and figuring out whether or not to pay just the minimum due or the bill in full (the latter) – people get quite perplexed about handling credit.
We empathize, but our biggest tips are:
- Don’t close credit card accounts – length of credit history plays into your score and having no credit cards will mean you lose/never create a credit score.
- Always pay your balance on time– failing to pay on time can be one of the biggest hits to your credit score.
- Always pay in full – don’t believe the myth that paying just the minimum due can help your credit. It doesn’t boost your score and just leaves you paying money in interest to your lender.
- Don’t spend more than you can afford to pay off – lenders want you trapped in a debt cycle. Don’t let them get you there!
4. People feel trapped with their banking products
It doesn’t take much for a bank to make you feel pretty helpless, especially when they’re housing your money. We want to make sure people feel empowered to make the switch from a bank that charges ridiculous fees (looking at you Bank of America) to a more consumer-friendly version like Ally or Simple.
It isn’t just us thinking all these things:
This kind comment on our Facebook page from an attendee really sums up the importance of financial literacy being taught in schools:
“Really enjoyed the workshop yesterday at Brooklyn College. Thank you guys for coming out and I hope the team over at the Magner Center invites you back. It was an invaluable experience for someone like me who didn't grow up in a household where money matters were frequently discussed. I learned a lot and will continue you visit your site to improve and expand of my financial literacy! Thank you so much!...University's make us take all of these other courses that make us well rounded academically but rarely are we required to take anything that could help us with the "real world" and a lot of students complain about that. So thanks again!”
Goldman Sachs Bank USA High-yield 12 Month CD
Synchrony Bank 12 Month CD
Synchrony Bank High Yield Savings
Barclays Online Savings Account
* All banks listed are a Member FDIC.