See “Dumb Money” in Theaters Now!
Understanding financial literacy is an imperative part of life and also one of the themes of the new film “Dumb Money.”
In theaters now, “Dumb Money” is the ultimate David vs. Goliath tale, based on the insane true story of everyday people who flipped the script on Wall Street and got rich by turning GameStop (yes, the mall videogame store) into the world’s hottest company,” according to the official synopsis.
Directed by Craig Gillespie and based on the book “The Antisocial Network” by Ben Mezrich, the film stars Paul Dano, Pete Davidson, Vincent D’Onofrio, America Ferrera, Nick Offerman, Anthony Ramos, Sebastian Stan, Shailene Woodley, and Seth Rogan. It also stars Myha’la Herrold and Talia Ryder as college students who buy into GameStop.
As the characters achieve financial literacy by investing in stock, the film presents a tale that all viewers can learn from.
Financial literacy is the ability to understand and effectively use various financial skills, including budgeting, building and improving credit, saving, borrowing and repaying debt, and investing. Becoming financially literate is crucial as it can help you to make more informed decisions about your finances and manage your money more efficiently.
Many people may struggle with financial literacy because they never learned the basics, including college students.
“We see a lot of students who haven’t had to deal with a whole lot of the complexities of the financial world before college,” says Phil Schuman, president of the Higher Education Financial Wellness Alliance and executive director of financial wellness and education at Indiana University Bloomington.
For many, the first time encountering the intricacies of financial literacy is during college or after graduation.
For college students, it’s important to be informed about the implications of paying for higher education as it can result in negative consequences after college, like going into unnecessary debt or student loan default, says Andrea Janssen, interim director of the University of Montana’s Financial Education Program.
It is especially important for Black college students to understand financial literacy due to the racial wealth gap that exists in the U.S.
According to Annuity.org, The median white household’s net worth is 10 times the size of the median Black household’s net worth. Black families possess less generational wealth resulting in Black students ending up taking out more student loans rather than receiving help from their families.
A study by the Federal Reserve found that the median Black graduate’s student loan debt is $30,000, $7,000 higher than their white peers. One can gather from this data that many Black students generally have less access to financial literacy education.
College is a wonderful time to learn the ins and outs of financial literacy and how to make informed decisions.
“Financial literacy is important for Black students because for so long that information and those resources were withheld from them. Their parents were denied that information, and, therefore, it was never passed down to the next generation,” said financial planner, Terrance Dedrick. “By learning at an early age, the students will have a better chance at success and be able to accumulate wealth the earlier they can get started.”
To improve financial literacy skills, college students should learn concepts such as budgeting, tracking spending habits, and understanding loans, according to experts.
Budgeting is a key first step in one’s financial literacy journey. Experts advise using the 50-30-20 method, which involves setting aside 50% of your take-home income for your needs, 30% for your wants, and 20% for savings.
It’s also important to track your spending by identifying monthly expenses to include in your budget and using a budgeting app.
BestColleges says that student loans play an important role in bridging the cost gap and allowing Black students to attend college. While true, it is vital to have a complete understanding of student loans before signing any paperwork. “Student loans can be a really effective tool for helping you progress in your life,” Schuman says. “Borrowing more than what you need and then using that money to potentially buy stuff that’s not relevant to your college experience, that’s bad.”
Investopedia notes that becoming financially literate has many benefits including, preventing devastating mistakes, preparing people for emergencies, helping individuals reach their goals, and invoking confidence in one’s decisions.
Everyone has to start somewhere in their financial journey and it’s okay to not know something – ask questions, and commit to learning as it will benefit you in the long run.
“I think the No. 1 point I would make to Black students is to ask if you don’t know. It’s OK not to know.” Dedrick says. “I would also say prioritize and start early and often. Although it may seem like something you can put off until later down the road, you are better suited to start early and won’t have to contribute as much because your money will have more time to grow.”
To learn more about financial literacy in an entertaining way, go watch “Dumb Money” now at a theater near you!
