Student financial literacy was the focus of a talk sponsored by the University of Michigan Central Student Government and the Office of Financial Aid Wednesday.
LSA sophomore Grant Strobl, chair for CSG government relations, said the body hoped the event would help UM students be more financially independent.
“It is our first attempt to have a large-scale event,” Strobl said. “(It) is part of the CSG initiative to bring in the focus on what college students hold near and dear, and that is the price of college. (Financial literacy) is something that we might be carrying with us some time after we graduate.”
He also noted that the financial aid office found many students struggled with debt, which suggested that financial literacy might be something that would aid the student body.
“One of the reasons why students might have a hard time paying back their loans is that they don’t know how to manage their personal finances,” he said.
Kristen Bhaumik, president of the Student Financial Aid Association, was the main speaker for the event. Bhaumik is also a staff member in the University’s Financial Aid office, and teaches a class on the topic, UC 170.
Bhaumik started the seminar with a clarification on the definition of financial literacy.
“I think financial education is really about being savvy,” she said. “You have to be educated but take it to the next level. Start to become strategic. Start to become mindful of the choices you make because that’s the whole point of being savvy.”
Bhaumik said first steps for students are organizing the reality of their spending, their financial state and setting reasonable financial goals, reminding students to organize before budgeting and saving.
“We usually get this wrong,” Bhaumik said. “Many of us are taught: save, save, save. I put 10 percent of my paycheck into my savings account, every paycheck, but I take $100 out a week later. That’s not saving, that’s bad budgeting.”
Other topics covered including knowing the specifics of your spending and the importance of renter’s insurance.
The seminar also discussed credit, which Bhaumik called a “measure of your trustworthiness.”
“A lot of people are looking at that credit report,” she said, explaining that landlords and employers look at credit to evaluate the timeliness of one’s payments and financial awareness. “Take seriously that payment and debt.”
Bhaumik ended the seminar with 10 tips, which included: “Be proactive, not reactive,” “keep records organized” and put a special emphasis on “create a budget and stick with it.”
Strobl said the seminar was just the beginning of a CSG plan to increase finance education on campus.
“We are hoping to have a series of events like college affordability, financial literacy,” he said. “We are hoping to have one on paying your taxes, and we are hoping to have a panel with state legislators on how the state of Michigan is trying to make college be much more affordable for students.”
Some of the students who attended the seminar, such as LSA senior Michael Garbose, said they were interested in business as a career option or wanted to learn how to support themselves in the future.
“I have taken some classes in economics and business in general, and I just wanted some better practical knowledge moving forward,” Garbose said. “I plan to go to business school and get my MBA in the future, and I figured that this could be a good starting point.”
LSA sophomore Shaylyn Austin had similar experiences and goals.
“I am just really interested in managing my personal finances. It’s not something I know a lot about,” Austin said. “Business is something I am interested in pursuing as a career … I think that everyone wants to be independent, and everyone knows to be independent, you need to be financially independent.”