Financial literacy is the ability to understand how money works in the world: how someone manages to earn or make it, how that person manages it, how he/she invests it (turn it into more) and how that person donates it to help others. More specifically, it refers to the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources. It is an essential skill that every college student, and to a greater extent many Americans need to further develop.
Interesting facts about financial literacy:
- In Australia, 67 percent of respondents indicated that they understood the concept of compound interest, yet when they were asked to solve a problem using the concept only 28 per cent had a good level of understanding.
- A survey in the US found that four out of ten American workers are not saving for retirement.
- A Canadian survey found that respondents considered choosing the right investments to be more stressful than going to the dentist.
- Between 1997 and 2007, average undergraduate student loan debt more than doubled from $9,250 to $20,098 with a 6% increase between 2006 and 2007 alone. (Reed, 2008)
- 3 out of every 4 American adults say they aren’t saving enough (Pew Research Center, 2008)
The biggest thing to take away from these financial facts is that you are not alone. Many people all over the world do not have a high enough financial literacy but crave more knowledge on the subject. Below are some fun ways to begin to learn about budgeting, debt, interest, and making good financial choices. These games with introduce you to essential financial concepts that you can use in your life including budgeting, loan rates, and understanding management of debt.
Financial Literacy Interactive Games
Players manage a "day club" for vampires. In the course of the game, players experience the familiar tension between servicing debt, spending money, and saving for the future. By featuring vampires, who live forever, the game highlights the impact of long-term savings over a 45-year span in a 15-round game.
Rooting Out the Killer Bunnies
Farm Blitz, which was inspired by two extremely popular casual video games—Bejeweled and FarmVille—has players take on the role of farmers. As the game unfolds, players experience firsthand how quickly compounding debt—from high-interest credit cards and pay-day loans, for example—can make it impossible for saving habits to take root.
A game in which you play the business manager of a free-spending celebrity, trying to satisfy her wish list while keeping her out of the red. Manage her finances and ensure that she doesn’t go broke or max our her credit cards.
a fast-paced, interactive game that engages students while teaching them money management skills. Teams compete by answering financial questions to earn yardage and score touchdowns. The questions are primarily scenario-based, which is appropriate for the coursework. There are three levels: Rookie (ages 11-14), Pro (ages 14-18), and Hall of Fame (ages 18+). Financial Football also has an iPad and an iPhone application.
Additional Financial Literacy Resources
Mymoney.gov is the federal government's website that serves serves as the one-stop shop for federal financial literacy and education programs, grants and other information. MyMoney.gov is available in English and Spanish.
Mint one of the very best free personal finance apps, free program for computers and a free app for android and iphone. This allows you to actively track your financial information and budget yourself. Having your budget at your fingertips will help you to get control of your finance.