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Money Smart Week

In observance of Financial Literacy Month, learn more about your personal finance through resources from U of M and the University Libraries, and other online sources!

The Basics of Finance

What is Personal Finance?

The term "personal finance" refers to the management of your money, saving, and investing. This includes some of the key topics highlighted below!

Key Elements of Personal Finance


The general rule of thumb is spending less than you earn! Experts often recommend calculating your after-tax income and creating a 50/30/20 plan, in which 50% of your income goes toward essential expenses, 20% to your savings, and the remaining 30% to your wants/non-essential expenses.</p>



Start small, and as early as you can. Every little bit counts!

It is also important to plan for emergencies and other unexpected costs. Generally, saving about 3 to 6 months worth of expenses is recommended; however, any amount that you can manage is better than nothing.



Credit is the ability to borrow money or access goods, and pay it back later. Consumers (you) are granted credit based on the confidence that lenders have in your ability to pay back what you borrow; the better your ability to pay back anything borrowed appears, the better your "credit." Read more about how credit works here.


Banking, Credit Unions, & Accounts

When looking into opening a new account with a bank or credit union, it is important to weigh a number of factors. Some of the things you might consider are what kinds of fees they charge, what interest you'll be earning on your savings, and what other account requirements may be involved. Once you've found the one for you, the process is simple! Browse the links below to learn more.



There are many different types of loans, for nearly every area of life. "Loans" are money or another kind of commodity that is borrowed from banks, credit unions, other financial institutions, or another entity; this loan becomes a debt, and is repaid (with interest added to the total amount) over a set amount of time, called a "term."

When applying for a loan, it is important to know that lending institutions base their decisions on a number of factors, the most important generally being your credit score.


Debt Management

Managing your debt strategically is key to financial success; when done right, it provides you with stability and control, and can become a great financial asset.



Investing is the act of allocating funds to specific entities (such as stocks or bonds) in order to grow your money over time. Investments can be short or long-term. By nature, investments into the market are not guaranteed to grow, and can lose money; this introduces a main principle of investing, "risk" vs "return." There are many different types of investments, and investing activity. Click through the links below to learn more!


Financial Planning

Simply put, a financial plan is a roadmap for reaching your financial goals in both the near and distant future. This can include saving for college, buying your first home, or retirement. A common misconception is that financial planning or planning for retirement is for older adults - on the contrary! The sooner you start saving for the future, the better off you'll be when you get there.