Financial Literacy Program
This project entails the implementation of a financial literacy program at Glen Oaks Community College. The target population is the students. While businesses and individuals bare the economic strain, students are uniquely affected by their interactions with household’s finances. According to the 10-year report given by the national center for education statistics, millennials are leaving college in debt. Most of the college students leave schools with a lot of knowledge on quadratic functions and historical dates, but having no knowledge of establishing and maintaining good credit. They enter the real world lacking the real grip of money management skills, but an abstract understanding of how not spend the money. Such people become the target of lenders and to make things worse some are unethical so they give them unrealistic promises and end up devouring their finances. The financial troubling moments for students are teachable opportunities for them to learn how to manage personal finances. Comprehensive strategies for enlightening them on this subject to allow them to successful navigate a financial marketplace should be created. No doubt, that financial literacy for students can help not only them in achieving financial wellness but communities as large. Successful implementation of financial literacy program will Create well- a rounded students who have high chances of succeeding in the real world and increase their chances of making sound financial decision including avoiding over borrowing practices.
Table of Contents
TOC o “1-3” h z u 1.0 Introduction PAGEREF _Toc512508795 h 42.0 Background information PAGEREF _Toc512508796 h 53.0 Explanation of the project PAGEREF _Toc512508797 h 93.1 Mission statement PAGEREF _Toc512508798 h 93.2 Goals and objectives PAGEREF _Toc512508799 h 94.0 Strategic plan PAGEREF _Toc512508800 h 114.1 Target population PAGEREF _Toc512508801 h 114.2Authority to execute the plan PAGEREF _Toc512508802 h 124.3 The provision of the strategic plan PAGEREF _Toc512508803 h 134.4 Corporate Strategy PAGEREF _Toc512508804 h 154.5 Business strategy PAGEREF _Toc512508805 h 154.6 Functional strategy PAGEREF _Toc512508806 h 154.7 Policy PAGEREF _Toc512508807 h 164.7 Strategy implementation PAGEREF _Toc512508808 h 164.8 Evaluation and control PAGEREF _Toc512508809 h 174.9 Action plan PAGEREF _Toc512508810 h 175.0 Curriculum components PAGEREF _Toc512508811 h 196.0 Summary and review PAGEREF _Toc512508812 h 20References PAGEREF _Toc512508813 h 21Appendix PAGEREF _Toc512508814 h 23
1.0 IntroductionFinancial literacy is among the most important skills young people can learn. Although America has recovered from the great recession, a significant number of people are struggling with aftereffects. One of the groups that have been hit harder than most is the college students. To get a student loan is becoming much harder than there before. The number of students that are dropping out of universities and colleges because of financial drawbacks has been rising. This trend escalates the problem as getting a job practically requires one to have a college degree. The big question is what can be done? This problem can be solved by presenting a financial literacy program to students at Glen Oaks Community College.
High schools rarely teach financial education and most of the parents fail to teach their children skills on how to manage funds when they are teenagers. By having colleges promoting finance activities for students, they will help both the institutions and the students. The study conducted by Williams ; Oumlil, revealed that college financial literacy can be instrumental in student recruitment and retention, boosting graduation rates, the reputation of the school, and goodwill (2015).
Financial literacy for the student should entail practical activities, which introduces them to the real world. The aim should ensure that the youth who pick up the skills are able to apply them in real life situation to guide them to become responsible and succeed after college. A solid program should involve building a proper relationship with money and mental aspects, how to evaluate the loans and the terms, opening accounts, using a credit card responsibly, differentiating between needs and wants, and basics of investing.
Providing a personal financial lesson plan to student should be necessary. However, the earlier this starts the greater the effect it can have. It should span more than a few class hours. To have a real, long lasting effect, a dedicated personal finance class should last for a semester in a community college.
To help college students to achieve financial security, the college should consider the needs of college students. Most of the coursework in college is designed to guide students to pick up skills to earn money. Little time is spent equipping them to plan, save, manage, and grow that money. Establishment of financial management skills to college students can proactively address the problem that they are likely to face as young adults (Williams ; Oumlil, 2015).
2.0 Background informationMurugiah claimed that financial literacy for students is a vital tool in improving their financial capability. Students need to be taught on how to handle money, both at school and in the home. This will be key in minimizing the economic effect of the long-term recession griping many communities across the nation. It will have a great effect on their future. Equipping them even with the most basic skills will get them considering the available options before arriving at key monetary decisions. The careful consideration can help them in avoiding personal debts and increasing their chances to achieve financial security (2016)
No doubt, that financial literacy for students can help not only them in achieving financial wellness but also the communities they live among. The most effective time to enlighten them on personal finance management skills is before they walk out of college. In the today’s era, youth need to master the key skills in life, as they are the people who are instrumental to succeeding in life and our future.
Financial literacy is the confidence of debt, credit, and financial management along with the knowledge essential to make meaningful and responsible financial decision in daily lives (Murugiah, 2016). Moten claimed that it includes an understanding of how to balance a checking account, using credit cards, and avoiding debts (2011).
According to Chung & Park, the lack of financial literacy is not a problem only affecting the developing or emerging economies. Consumers in developed economies fail to show a strong grasp of financial principles, which are essential in understanding as well as negotiating the financial landscape, avoiding financial pitfalls and managing financial risks. In addition, the level of financial literacy tended to vary depending on the income level and education. However, evidence shows that at the time highly educated people with high income can be just ignorant on financial matters as lower- income, less educated consumers (2014).
No one would like to imagine the brightest student in class lands a six-figure job at a big company and becomes broke at the age of 30. Financial illiteracy is an international pandemic. Both Men and women, young and old rush life in frantic and feverish pace, ignoring the signs of their poor financial health. Bhushan & Medury claimed that the human race has a disorderly relationship with money. The money woes’ seeds get planned before individuals leave college. This explains why habits with money often repeat themselves and the reason students tend to embrace the saving and spending behaviors of their guardians. This truth points out the key reason financial education is so important. For those who are searching for role model/mentor to guide them on finance complexities, it is not easy. Competition is one of the most overlooked aspects of finance. As vain as it might appear, a significant number of individuals in the society want to stand out in terms of wealth and status. Therefore, they will maintain what is behind their success. In addition, there are those who are willing to give advice even though they lack something worth to give. They range from a parent who has not achieved much too self-proclaimed individuals whose success can be associated with luck, rather than making the best financial decisions.
Most college students leave schools with a brain full of quadratic functions and historical dates, but having no knowledge of establishing and maintaining good credit. They enter the real world without the real grip of money management skills, but an abstract understanding of how not to use it. Such people become the target of unethical lenders who attract them with unrealistic promises and end up devouring their finances (Bhushan ; Medury, 2014)
For an effective financial literacy program, there is need to consult all the stakeholders involved. The key stakeholders here are the students as they suffer from financial setbacks. The students are also the intended beneficiaries. Equally important is the school management since the implementation part rests on their hand. The matter is of interest to the Dean of Academics and the faculty because they can offer useful insights on what should be taught. In this context, they can play an important role in designing the curriculum. Financial management instructors will be an asset as they will be expected to help the management in designing what should be taught and teaching some if not all of the courses.
Barriers to change
Students are experiencing financial challenges. The increasing number of students who are dropping out from colleges demonstrates this.
It is becoming more and more difficult for students to acquire loans. This requires a student to seek other options and spending the little that they have in the best possible way.
Students are leaving schools without an understanding of the real world. This is making them easy targets of unethical leaders who attract them with unrealistic promises.
Forces for resisting changes
School curriculum does not provide time, money and lessons for financial literacy programs.
The abstract understanding of how not to use, creates a feeling among the students that they do understand financial aspects, therefore they do not see the need for financial literacy.
There is an expectation that the students have knowledge on the management of personal finance, yet most of the people who surround them and are willing to teach them are their parents who might not have achieved much education in financial management.
To introduce a financial literacy program requires resources (funds and human capital).
It is expected that the program will face resistance from faculty and some students who will feel that the time meant required to teach the financial literacy course will take away from other more college oriented classes.
3.0 Explanation of the project3.1 Mission statementEmpowering the youth with the knowledge to manage their personal finances.
Money makes the world go around. This is not to say that happiness, love, and other goals are not vital, but having money will make it easy for one to achieve those goals. In life whatever goals one has, for instance, start a family or find a cure for cancer, one will need money to attain them. In absence of financial literacy, it is almost impossible to make, keep, and grow money. There is no doubt that attending college is a wise choice since investment in professional know-how offers one the opportunity to make more money as well as accomplish personal growth. Here is to becoming money smart individuals.
3.2 Goals and objectivesGoal
Provide students with the best financial knowledge which will make them competitive in the real world and help them make the best monetary decisions.
Improve student loan borrowing practices within the next 2 years. One of the objectives of this program will be to reduce student overborrowing practices. The success on attainment of this objective will be determined by accessing the number of students who borrow the maximum amount awarded an average amount. According to Biel, the full amount borrowed by students is exceeding their earning potential for the fields that they have chosen. When this happens, it is vital to incorporate debt literacy initiatives. The budgeting exercise for incoming students should provide a realistic estimate of what one can afford to may when in an entry-level position of the field chosen (2017).
Lower loan default within the next 5 years. This can be measured by considering many students who have defaulted on their loans and delinquency rates. Over the years, the number of students who have defaulted on their loans has been on the rise. A long-term solution is for colleges to increase their graduation rate since this has demonstrated to reduce all other student loan default risk factors. In short-term, the financial capability lesson should be offered to facilitate to loans’ transition to repayment status (Potrich, Vieira, & Mendes-Da-Silva, 2016).
Improving student retention as well as graduation rate. This can be determined by evaluating the graduation and student retention rates. This objective aligns with the fundamental goal of the college and its students. According to Potrich, Vieira, & Mendes-Da-Silva, the most effective thing an academic institution can achieve is increasing the graduation rate. In this context, the financial literacy targets to lessen the financial stress which results from dropping out and increasing student engagement. This goal is expected to be achieved within the next two years (2016).
Creating well rounded students who have high chances of succeeding in the real world. To measure the extent to which this goal has been achieved a comprehensive financial literacy assessment can be performed. The success of graduates is the key metric that can be used to measure the value that the school adds to the students. Financial literacy will prepare students for the real world and help them even to become better. It is expected that within the next 8 years, the institution will have produced best people in the job market. Most of the students stay in college for 3 to 4 years, then it might take them, 2 to 3 years to secure a good job in their field.
4.0 Strategic plan
4.1 Target population
The target population is the students who are attending the College. Due to financial issues, consumers are more concerned than ever about their personal finances. Household confidence in income stability, future employment prospects, job security, ability to build assets, and high food and fuel prices as well as the tightening credit conditions are putting more pressure on consumers to optimize financial decisions. The public narrative presents families and individuals in financial distress because of the high rates of obligation, retirement savings, insignificant savings, and diminished incomes.
While businesses and individuals bare the economic strain, students are uniquely affected by their interactions with household’s finances. The financial troubling moments for students are teachable opportunities for them to learn how to manage personal finances. Creating comprehensive strategies for enlightening them on this subject should allow them to navigate successfully a financial marketplace.
According to the 10-year report given by national center for education statistics, millennials are leaving college in debt. Of the 85 percent of the students examined, more than 65 percent were expected to pay their debt using the student loans. Along with starting with an average debt of $35,000, they find it hard to secure a well-paying job in their field. As the graduates struggle to pay loans/debts, they are forced to sacrifice buying other necessities. Student’s loan debt which is currently over $1.3 trillion has raised concerns from politicians. About 3.7 million of these students have federal student loans, which they have not been able to pay as expected. NOT CITED???
4.2 Authority to execute the planThe idea to implement a financial literacy program will first be presented to the Glen Oaks Board of Directors for approval. If approved, the Dean of Academics and Extending Learning will implement the financial literacy program by working with the appropriate department and faculty members. Staff and administration will also play an important role in the process. The first lesson will be given during the orientation. More lessons should follow as the student’s advances in the College. By the time one reaches college, they have had at least one part time job. They might have been working in a fast food restaurant or babysitting, so they have earned income. For those, their parents taught them the importance of setting aside part of their earnings. They have basic finance skills. However, even with that in place, the cost of college can even set back those financially perceptive students. Worthington claimed those six months after graduation, when the students are required to pay their first loan installment, they learned the hard way. Most of them came to realize that the basic expenses could wipe out their paycheck (2013).
Personal finance education will be offered at school but not at home. This should be done by a group of experts who have a detailed understanding of finance concept including saving and spending, creating and maintain budget, reconciling a bank account, handling cash, introduction to credit, debt avoidance and management, saving and investing, basic investment options, planning for retirement, preparing for and paying income taxes, renting vs homeownership, maintaining financial records an protecting financial information. DO I LIKE THIS PARAGRAPH???
4.3 The provision of the strategic plan
The vision of the financial literacy program is all students attain financial stability and improve the quality of their life.
We imagine a society of people who are have financial knowledge and who can apply that knowledge appropriately to make sound decision when it comes to financial matters. The program will prepare our students to be successful financial decision makers. Through financial education, there will be improved quality of life in all of our graduates.
Spread the knowledge on saving and investing your money wisely.
The following core principles are considered as imperative in improving financial behavior:
Spend lesser than one earns
Educate our youth to plan for their financial future
Save and invest for long term and emergencies expenses
Individuals should protect themselves against large losses
Build human capital
Develop a focused optimism
Students will be encouraged to set financial and life goals. The financial literacy program will provide them with basic knowledge on how to manage their money and succeed. The more students are well endowed in personal financial management, the higher the chance they have to save wisely and invest smartly improving their overall financial situation in long run.
Educate students on good financial management skills to reduce over borrowing practices. Students need skills to understand what they should borrow by evaluating what they can be able to pay comfortably. It is expected that this will lower the defaulted loans. Over borrowing practices can be regulated if the students are able to plan well for the limited money they have.
Improve the student retention and graduate rate. As noted earlier, a significant number of students are failing to graduate or dropping because of financial setbacks. If we can educate them on how they can adequately manage their finances, they will be able to determine the difference between a want and a need. This will give them a lesson on priority purchases. In addition, this will allow them to be able to set funds aside to meet needs related to their education.
Developing well-rounded students who can succeed in the real world. It is expected that at one point every student will graduate. In the future, every institution including Glen Oaks Community College would be proud to see that it has produced some of the most successful people. This can be achieved if they focus on developing skills for their students that are essential to helping them not only be able to work but fit well in the real world. Everyone in the society has several needs and wants which needs funds. The ability to manage ones funds in the best possible way is what determines how far one can go in creating wealth and meeting financial obligations.
4.4 Corporate Strategy Glen Oaks Community College is committed in work force and training needs through developing and evolving a diversified, strong academic program and specialization. The institution is keen to ensure that it produces the best in society. This will be achieved by ensuring that students get high level education and have the necessary skills to succeed in the real world. This is where the financial management skills come in.
4.5 Business strategy
Every academic institution aspires to be the best and Glen oaks Community College is not an exception. In this context, Glen Oaks Community College will move an extra step to ensure that its students are well rounded by integrating the financial literacy program in the curriculum.
4.6 Functional strategy***The college management will ensure that at least every semester, their students have a unit on personal financial management. This will be offered by experts who are believed to have a wide knowledge in the area. By the time a student’s leaves the institution it is expected that they will have knowledge on saving and spending, creating and maintain budget, reconciling a bank account, handling cash, introduction to credit, debt avoidance and management, saving and investing, basic investment options, planning for retirement, preparing for and paying income taxes, renting vs homeownership, maintaining financial records an protecting financial information.
The college want to produce graduate who can make sound decisions when it comes to financial matters.
4.7 Strategy implementation
The first step will be develop environment for the proposed program. This involves creating the urgency that financial management knowledge is required. Further, it is expected that the program will face some resistance as some of the lecture will feel that it will take the time meant to teach other units. There all the involved stakeholders will be engage to increase acceptability.
The college management will hire 3 experts who can teach on personal financial management
The college management working with financial management experts will design a curriculum (on what should be taught).
The financial management units will be integrated in school time table.
At the end of each semester, students will be given an exam to evaluate their understanding and how much knowledge their have acquired in personal financial management.
A survey will be conducted to evaluate the success of the program. This include accessing borrowing practices, student graduation and retention rate and success of graduate.
4.8 Evaluation and control
To evaluate the success of the program:
At the end of each semester, students will be given an exam to evaluate their understanding and how much knowledge their have acquired in personal financial management.
A survey will be conducted to evaluate the success of the Program. This include accessing borrowing practices, student graduation and retention rate and success of graduate.
The evaluation process will be a continuous one. Areas that require improvement will be identified and the necessary actions will be taken.
4.9 Action plan
Task Who is responsible for doing it Responsibilities Timeframe
Developing suitable environment for the Program The school management Creating the need and urgency of the Program
This will be achieved by teaching the students and lectures the importance and benefits associated with the Program 2 months
Hiring financial management experts The school management Recruitment and selection 2 weeks
designing a curriculum The school management and financial experts Designing what should be taught 1 week
Integrating the financial management units into school timetable The school management and financial experts Integrating the financial management units into school timetable 1 week
Test at the end of semester Lecturers( who are financial management experts) Giving the students an exam at the end of every semester A continuous process
Evaluation survey Appointed staffs by the school management Performing a survey to evaluate the success of the Program. This will include accessing borrowing practices, student graduation and retention rate and success of graduate.
A continuous process
5.0 Curriculum componentsAssumptions
It is assumed that
Students leave high school with theoretical knowledge and less knowledge on real world
By the time one reaches college, they have at least had a part time job
It is difficult for one to get someone who can mentor them well on financial matters.
Aim and objectives
Financial literacy intends to
Educate the students on how they can practice wise borrowing practices
Educate the students how they can smartly invest on the personal finances
Educate the students on how to make sound financial decisions
The students will be taught on saving and spending, creating and maintain budget, reconciling a bank account, handling cash, introduction to credit, debt avoidance and management, saving and investing and basic investment options.
Mode of transaction
Students will be taught in class and at the end of every semester, they will be expected to sit for an exam.
Tests and exams
An evaluation survey whereby they will be interviewed.
6.0 Summary and review
Financial literacy is among the most important skills young people can learn. High schools rarely teach financial education and most of the parents fail to teach their children skills on how to manage funds when they are teenagers. This justifies the need to have financial literacy program in colleges which teaches them practical activities and introduces them to the real world. To ensure smooth implementation, all the affected stakeholders should be involved and engaged. This will see little or no resistance as everyone will be see the need and the urgency of the program. The program need investment in terms of time, human capital (expert required to teach) and funds (buying reading materials and other essentials). Successful implementation of financial literacy Program will Create well- a rounded students who have high chances of succeeding in the real world and increase their chances of making sound financial decision including avoiding over borrowing practices.
ReferencesBhushan, P., & Medury, Y. (2014). An Empirical Analysis Of Inter Linkages between Financial Attitudes, Financial Behaviour and Financial Knowledge of Salaried Individuals. Indian Journal of Commerce and Management Studies, 5(3), 58-64. Retrieved from https://search.proquest.com/docview/1561350615?accountid=45049
Biel, R. (2017). Teaching financial literacy should become priority. Journal of Business, 32(13), 12-12,23. Retrieved from https://search.proquest.com/docview/1924617873?accountid=45049
Chung, Y., & Park, Y. (2014). The effects of financial education and networks on business students’ financial literacy. American Journal of Business Education (Online), 7(3), 229-n/a. Retrieved from https://search.proquest.com/docview/1551368977?accountid=45049
Moten, J. M., Jr. (2011). Examining the disparity in financial literacy between high school seniors of different ethnicities and income level (Order No. 3489216). Available from ABI/INFORM Collection. (912191994). Retrieved from https://search.proquest.com/docview/912191994?accountid=45049
Murugiah, L. (2016). The level of understanding and strategies to enhance financial literacy among malaysian. International Journal of Economics and Financial Issues, 6(3) Retrieved from https://search.proquest.com/docview/1809612004?accountid=45049
Potrich, A. C. G., Vieira, K. M., ; Mendes-Da-Silva, W. (2016). Development of a financial literacy model for university students. Management Research Review, 39(3), 356-376. Retrieved from https://search.proquest.com/docview/1772810069?accountid=45049
Williams, A. J., ; Oumlil, B. (2015). College student financial capability. The International Journal of Bank Marketing, 33(5), 637-653. Retrieved from https://search.proquest.com/docview/1690964999?accountid=45049
Worthington, A. C. (2013). Financial literacy and financial literacy programs in australia. Journal of Financial Services Marketing, 18(3), 227-240. doi:http://dx.doi.org/10.1057/fsm.2013.18
Budget for implementation of financial literacy program Amount
Planning Creating suitable environment for the program $ 100,000.00
Recruitment and selection of Experts $ 50,000.00
Designing curriculum and integrating it in school timetable $ 70,000.00
Materials and equipment’s $ 150,000.00
Reading materials $ 100,000.00
Teaching materials Test and exams $ 80,000.00
Human capital expenses Salaries for lecturers $ 900,000.00
Total $ 1,450,000.00