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Financial Literacy 101

Financial Literacy 101

Financial Literacy 101

Financial topics to help you manage your money wisely

Definitions

Asset
Things you own that are worth money, like a car, a house, or money in the bank.

Compound Interest
Earning interest on both the money you save and the interest you’ve already earned on that money.

Credit Card & Credit Score
A card that lets you buy things now and pay for them later. A score that tells banks how good you are
at paying back money you borrow. A higher score means you’re really good at it!

Inflation
When things start costing more, so your money buys less than it used to.

Insurance
A way to protect yourself from big, unexpected costs. You pay a little bit regularly, and if something
bad happens, the insurance helps cover the cost.

Interest Rate
It’s the extra money you pay when you borrow money or the extra money you get when you save
money in a bank.

Investment
Using your money to buy things like stocks or property, hoping they will be worth more money later.

Liability
Anything you owe money on, like a loan or a credit card bill.

Loan
Money you borrow from someone (like a bank) that you have to pay back, usually with extra (interest).

Mortgage
A special kind of loan for buying a house. You pay it back over many years.

Savings Account
A place at a bank where you can keep your money safe, and it earns a little extra money (interest).

Stocks and Bonds
Stocks mean you own a tiny part of a company. Bonds are like lending money to a company or
government, and they pay you back with interest.


FAQs

What are student loans and how do they work?
British Columbia and Canada Student Loans and Grants applications can be accessed on StudentAid BC . The deadline to apply is 6 weeks before the end of the study period. Check out StudentAid BC for more information.

What is the difference between a savings and a checking account?
A checking account is for daily transactions, like paying bills. A savings account is for storing money long-term and usually earns more interest.

How do I start investing as a student?
Start by learning about different types of investments. Consider low-risk options like savings accounts or mutual funds. Only invest money you can afford to lose. Canada offers RESP as a savings plan for education.

Should university students have an emergency fund?
Yes, it’s a good idea to have a small emergency fund for unexpected expenses, like a laptop repair or a sudden trip home. Try the UBC Cost Calculator for more information on your predicted university expenses.

How can I manage my student debt effectively?
Understand your loan terms, explore repayment options, and start paying off high-interest loans first. Consider setting a budget to manage repayments more effectively. Try the UBC Budgeting worksheet.

How can students save money on daily expenses?
Students can save money by cooking at home, using student discounts, carpooling, and limiting non-essential spending like eating out. Stay updated by reading Financial Aid Articles on tips and tricks to save money.

What is income tax and how is it calculated?
Income tax is a tax on your earnings. It’s calculated based on your income level, with different rates applying to different income brackets. If you have earned income, have a tax refund to claim, or want to apply for government benefits, like the GST/HST credit, you need to file a tax return. Check out UBC Students Taxes for more information.


Government Resources

BC Student Aid

  • The provincial agency responsible for helping students with their post-secondary education costs. The website allows students to plan their future (explore career options, choosing a university/program, and budget planning), explore funding options, apply for student loans, maintain loan payments, and repay loans. How to apply.

National Student Loans Service Centre

  • The NSLSC manages federal student loans, scholarships, and grants. Similar to BC Student Aid, the NSLSC provides resources on budget planning, understanding the mechanics of a loan, etc.

AMS Resources

  • The AMS also provides funds, grants and subsidies. Visit our page to learn more.