As students head back to school, it’s an ideal time to focus on building essential financial literacy skills. Understanding how to manage money is a critical life skill that can set the foundation for a secure and prosperous future. At Patterson State Bank, we believe in empowering students with the knowledge and tools they need to make informed financial decisions. Here are some key tips and resources to help students get started on their financial literacy journey.

1. Budgeting

Budgeting is the process of creating a plan to spend your money. This plan allows you to determine in advance whether you will have enough money to do the things you need to do or would like to do. For students, budgeting is crucial as it helps manage limited resources effectively, ensuring that money is available for essential expenses such as tuition, books, and living costs.

How to Create a Budget:

List Your Income: Include all sources of income, such as part-time jobs, allowances, scholarships, and grants.
Track Your Expenses: Keep a record of all your expenses, categorizing them into essentials (e.g., rent, utilities, groceries) and non-essentials (e.g., entertainment, dining out).
Set Financial Goals: Determine your short-term and long-term financial goals. These might include saving for a trip, buying a car, or paying off student loans.
Adjust Accordingly: Regularly review and adjust your budget to ensure you are staying on track and making progress toward your goals.

Useful Tools:

Budgeting Apps: YNAB (You Need A Budget) and PocketGuard are popular apps that can help you track and manage your budget.
Spreadsheets: If you prefer a more hands-on approach, creating a budgeting spreadsheet using Excel or Google Sheets can be very effective.

2. Saving

Saving money is essential for building a financial cushion that can help you handle unexpected expenses and achieve your financial goals. For students, developing a habit of saving can lead to greater financial security and independence.

Tips for Effective Saving:

Pay Yourself First: Treat savings as a fixed expense. Set aside a portion of your income for savings before spending on anything else. · Open a Savings Account: Choose a savings account that offers a good interest rate and low fees. Consider setting up automatic transfers from your checking account to your savings account.
Set Specific Goals: Having clear savings goals can motivate you to save consistently. Whether it’s for an emergency fund, a new gadget, or future travel plans, specific goals can help you stay focused.

Resources:

Savings Calculators: Online tools like Patterson’s savings calculator can help you determine how much you need to save to reach your goals.
Financial Literacy Programs: Look for financial literacy programs in your area or online.

3. Understanding Credit

Credit is an essential aspect of financial health. It affects your ability to borrow money, rent an apartment, and sometimes even get a job. Understanding how credit works and how to build a good credit history is vital for long-term financial success.

Tips for Managing Credit:

Get a Credit Card: If used responsibly, a credit card can help you build credit. Make sure to pay your balance in full each month to avoid interest charges and build a positive credit history.
Monitor Your Credit Score: Regularly check your credit score and report to ensure accuracy and to understand how your financial behavior impacts your score. Patterson offers a free credit monitoring tool within our mobile banking app.
Limit Credit Applications: Each application for credit can temporarily lower your score, so apply for new credit only when necessary.

Educational Resources:

Credit Counseling Services: Non-profit organizations often offer free or low-cost credit counseling to help you understand and improve your credit.
Online Courses: Some websites offer free courses on personal finance, including credit management.

Conclusion

Building financial literacy is a journey that starts with taking small, informed steps. By understanding budgeting, saving, and credit, students can lay a strong foundation for their financial futures. At Patterson State Bank, we are committed to supporting our community with resources and guidance to help everyone achieve financial success. As you head back to school, remember that making smart financial decisions today can lead to a brighter, more secure tomorrow. Happy learning!

For more resources and personalized financial advice, visit Patterson State Bank’s website or drop by one of our branches. We’re here to help you every step of the way.