![]() That interest in of itself becomes a huge cost. That means that you’re paying essentially one-fifth of the value of the debt annually just in interest and makes it difficult to eliminate the actual debt. It becomes a bit of a cycle if you have credit card debt because a lot of times the interest rates on these can be 20% or more. Once you have a good understanding of your financial position, then being able to pay down any existing high-interest debt should be the next step. Far too few people actually sit down and write out a basic budget, but it’s a substantial step to understanding where you’re at financially. Number one has to be to recognize how much you have coming in, in a normal period, and recognize how much you have going out so that you can live within your means. What are the three biggest steps people can take to change their financial situation? A very large percentage of Americans have either no retirement savings or substantially less than they need to be able to retire at the age they would like to be able to retire. Unfortunately, there are a lot of statistics that show that’s something recent generations haven’t done a great job of. So if we can start setting aside money when we’re in our early 20s, that’ll go a long way towards setting up a substantial retirement account for when we hopefully eventually get the opportunity to retire. If we set money aside at an earlier age, it has a longer period of time to grow. That’s where a better understanding of financial literacy helps. I’m sure we’re all familiar with the Robin Hood traders, but really that’s a bigger shift that happened in the market, which is that a lot of people took small amounts of money and began to set them aside. One thing that we saw happen a lot was an increase in people being interested in investing. Some people made lifestyle changes that allowed them to focus on their budgets in a different perspective. Some people were able to make changes for the better during that period. The benefit of all of those is that we’ve all had to adjust. How does financial literacy help offset anxiety around all those unknowns? With COVID, we have had this almost perfect storm of a global pandemic, the Great Resignation, and inflation. It’s about understanding what the limits of the firm are, understanding how to create value for their shareholders in a responsible manner so that they’re not taking on too much risk or putting the company-and therefore their shareholders’ money-at too much risk. We want to graduate students who are going to be good stewards of their company’s money just as they will be of their own money. How important is financial literacy for an MBA student? In honor of Financial Literacy Month this month, we sat down with Walkup to learn more about the impact financial literacy has on people of all ages and to share his advice on how to be more financially savvy. “But if we could get those same principles instilled in students at the high school age, for example-before they hopefully have gotten a credit card and started to run into debt-I think that could be very beneficial for them.” ![]() “As a professor, I get to talk through the impacts of compounded interest and similar topics that help students become aware of, for example, how dangerous going into too much debt can be,” Walkup said. And his love of finance has expanded to include personal finance, thanks to a recent Florida house bill that will require high school students to take a money management course before graduating. ![]() Today, he teaches finance classes at his alma mater. With that recommendation, Walkup applied to Crummer Graduate School of Business, where he focused in finance before moving on to University of Florida to earn a Ph.D.
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