Dollar Sense

How financially literate are you? While money is something almost all college students think about, few really know anything about the compounding value of money and the power of being financially literate.

This is where finance expert Lisa Feeley steps in.

Feeley visited campus a few weeks ago for a book signing and seminar on her new book SpendRight: The Smart Start for Students.

"As I spoke with more and more of my peers, their junior high and high school children, I realized that very few had a good understanding of finances and they were always asking for assistance and making comments such as: 'I wish there were a book that would speak in plain English about spending, saving, and investing,'" said Lisa Feeley, author of SpendRight.

SpendRight is an easy read. The book is 180 pages of personal finance tips for every student.

It spells out how to build great financial health starting in high school, through college, and entering the real world. The book also contains activities and financial exercises to help students better understand how they can accumulate wealth.

According to Feeley, money is the most essential tool in life, and college, or even high school, is the time to understand money because the compounding value of money is extremely powerful.

"[When you're young], you're not 100 percent responsible for using all your own money. You have earning power and you have time on your hands," Feeley said.

"We know that knowledge is power, so the more you can learn about money, and the more comfortable you are with understanding how to earn it, make it work for you, grow it, manage it, the more [money] you will have to do what you want," Feeley said.

For example, lesson two in SpendRight tells students how to become a millionaire by the time they turn 65. If someone starts saving at age 15, he would only have to save 126 dollars a month to own a million dollars by the time he turns 65. Likewise, if someone starts saving at age 40, he would have to save 1,050 dollars a month to be a millionaire by age 65.

"Hoping that you hit the lottery is not a reality for 99.9 percent of us-nor is being born Paris Hilton. It is essential for every individual to have solid financial literacy so that we have a better understanding of economics, welfare, healthcare [and] our future financial security, or how will your generation make good decisions about your life?" Feeley queried.

According to Feeley, the average college student is not as financially literate as they should be. Students can test their Fiscal IQ on SpendRight's website, where questions look like: Do you have a financial goal for the future? Do you only buy something if it is a good deal? Do you know what inflation, interest, ROI and rate of return are?

However, some students claim that they do have pretty good control over their money.

"I keep my savings account separate from my checking account. I buy things when I want them provided that my bank account is in good shape," said Pravan Ghei, a third-year Electrical Engineering major.

"When it comes to money, the most important thing is having a balance between how much one has and how much one can spend. Right now I would say that I'm pretty solid about financial knowledge, but in the future I would like to know more about investing and planning," Ghei said.

In addition to teaching students about why it is important to learn about money early, SpendRight offers practical advice on how to save, spend and invest.

Some of the lessons include: do not accept any job and any rate of pay offered with no negotiation; after opening an account, try to make regular deposits; once you have accumulated some money, start to learn about other investments like Certificates of Deposits and Government Saving Bonds.

When it comes to shopping, SpendRight says to ask 10 questions beforehand, including: Why do I want this item? Do I really need this item? If I waited two weeks, would I still want to make this purchase?

"Students should read one good finance book per year, understand how to save money and not buy anything they cannot afford in cash or [are] unable to pay off within two months with the money they earn," Feeley said.

SpendRight has reached millions of students nationwide to much applause. "Most students I have met completely agree that they lack the discipline to 'not spend money unnecessarily,' and agree that they need to learn more about money," Feeley said.

"Everything starts with [your] own desire to be successful in life-money is just a good tool to get you there," Feeley said.