Analysis of Financial Basics: A Money-Management Guide for Students - Book Report/Review Example

Book Review, Family and consumer science Money matters and habits are always a problem to most people regardless of the huge or little amount they get. The book talks about money habits and the trends that human beings have in relation to saving and spending habits, especially to college students. Students normally fall into bad debts because of the low interest loan rates they get and the easily access credit cards to them. This article will review the financial basics and show the gaps that come about to college students. Chapter 1 College students’ habits of spending their money arise from various conditions including the family background and the amount of money that is disposable to the student. Many students normally face challenges out of the anxiety and excitement that they get from being awarded the student loans that is an additional source of money apart from their regular moneys that they get from those who support them and their guardians as well. Chapter 2 Thee chapters of the book also show the spending patterns and the times and seasons when the spending of students is higher and it was found out the spending was a bit higher immediately they were awarded the boom that came with very little interest that was included when repaying back the loan. Making rational ideas and decisions about the spending habits was a problem to students, especially those who came from families that did not introduce them to money saving and spending habits. This chapter was helpful in that it gave me the idea of rationality and how to make decisive decisions that analyze all aspects of money spending and saving Chapter 3 The other chapter is the one that talks about the saving of the money for uncertainty and future use, where the college students ought to keep their money for reasons of any shortages that may come in the future or any emergencies that would require a quick response of the available money. Being a student that I am, anything is bound to happen in the course of pursuing my studies and therefore as a contingency measure, I found it helpful to set some money aside for any unforeseen costs, both as a contingency measure and to avoid any surprises. Chapter 4 The other concept that Chapter V and VI talked about is the channels through which this money is spent. Students normally waste a lot of money simply because they have not designed the proper channels through which their money should be spent. Coming up with a budget is necessary and the reallocation of money into different needs is necessary. This is a concept I really found to be so helpful in creating a budget for my money, both the students’ loan and my personal finances. Chapter 5 There are strengths that college students have despite the shortcomings of the cheap interest loans. A particular strength is the strength of saving. When I get the money, I have to allocate some of it towards saving, not only for future reasons but also for the unforeseen costs and unexpected emergencies. Such saving s come in handy whenever a situation arises that money is needed urgently like a medical emergency or paying to acquire something that is highly perishable or highly bided. Saving also results to investment because the investment is a function of saved money which leads to a higher disposable income. Chapter 6 Bad debts that come to students is one weakness that has affected students. Students go lobbying and taking money from other students in form of borrowing to pay back with some interest or soft loans. When the loan money arrives, they either fail to pay back or the money is insufficient to service the loans that they borrowed. This makes them fall into a situation of bankruptsy and bad debts or a debt burden. This is a lesson that I learnt and will always take care on the amount of money that I borrow. Chapter 7 The other strength is budgeting. Budgeting has an advantage in putting all the savings and earnings in a platform and reviewing what to purchase and not what to, depending on the amount. There is the aspect of preference of choice and opportunity cost when I am doing my budgeting. Preference of choice helps me to budget and come up a list of items and activities to engage my money according to their preference and the urgency on which they are needed. Opportunity cost also helps me in the budget process in giving up buying some items that have other complementary goods or are not urgent. Chapter 8 I also buy goods in bulk and in large quantities to avoid wastage of money in goods that have been broken down by the supplier or the producer. Buying goods in large quantities ensures that money is saved because those goods that have been broken down into smaller quantities end up being expansive in the long run. This lesson appears in chapter 8 Chapter 9 Despite these strengths however, I have weaknesses in handling, not only the loan money but also even in my own cash. This is regarding what I learnt in chapter 9. I normally do not conduct an assessment of the current market trends and prices to see which store or shop has the cheapest prices and can sell the same goods I want at a discounted price. Conducting a market analysis is tedious since I have to move from one shop or store to the other comparing prices. I always feel I am disappointing the seller when I turn down his price. Chapter 10 The other weakness is giving out my money inform of handouts to those who do not have. This is a weakness in that I readily give yet this people can also get empowerment on how to make their money and depend on themselves and stop the habit. I normally find huge deficits when I am calculating on what I get, both from the loan and my own personal support and what I spend. This is what came to my realization after going through chapter 10. Chapter 11 The last weakness is relationships and friends. Although they play a big role in raising and maintaining my socialization process, sometimes they tend to be expensive because I have to spend on such relationships. Maintaining romantic relationships also require money and this normally eats to my budget as I have to make those in the circle satisfied and happy. Chapter 12 The book recommends that students should be taught on spending and saving skills, both from their families and at school to avoid wastage of the money and to also know how to manage their finances in the future. This will go a long way in educating the nation on how to save and have a higher potential of living a satisfied life with the little that comes by. Works cited Susan K. Financial Basics: A Money – Management Guide for Students. Ohio: Ohio State University Press. U. S. A. 2004. Print Read More