Every Student Needs Financial Literacy by Megan

Every Student Needs Financial Literacy by Megan - June 2025 Scholarship Essay

Over the summer, I like to work at a summer camp. I love working with kids, I have a niece and a nephew whom I love spending time with, so working at a summer camp just made sense. College is so rigorous, so being able to get a break and have fun, all while making money, is very rewarding.
Last semester, I was fortunate enough to take a financial literacy course. I believe financial literacy should be made a graduation requirement for every student in college because I learned so much about money management from the course. Usually, when I work at camp, my checks are automatically deposited into my checking account. However, this summer, I opted to split my check between my checking and savings accounts. In addition to that, I opened up an IRA account.
I decided to split my check because I want to get into the habit of budgeting. Last year, when I had my money solely in my checking account, I spent it all during the school year because it was easy to access and there was no withdrawal fee. However, by allowing some money to go into my savings account, I wasn’t as tempted to spend all of my summer money, my money was earning interest, and I had and had an emergency fund.
There are two types of IRA accounts, a traditional IRA and a Roth IRA, and they serve similar purposes, but there are key differences. A traditional IRA has limited eligibility for tax-deductible contributions, and you pay taxes when you withdraw money during retirement or RMDs. While Roth IRAs do not reduce current taxes because contributions are made with after-tax money, this allows your money to grow and retirement withdrawals to be made tax-free. Both IRAs are good options, it mainly depends on your current financial situation and your financial goals. One of the main benefits of an IRA and the main reason why I decided to open one is the high interest rates. In my case, I opened a traditional IRA account and chose a CD so that I could receive a fixed rate per year.
The advice that I would give to other college students in a similar situation is to live within your means and allow your money to work for you. Last summer, I only utilized my checking account, which had little to no interest, and I spent it all. However, by spreading my money across multiple accounts, I am able to budget my money and prepare for retirement.