Colleges and universities have a large (and often negative) impact on the finances of their students and graduates. Of course, much of this is out of the control of the schools and is simply a fact of life for those who want a college education, but does that mean that schools shouldn’t prepare students for the effects? In my opinion, one of the best things colleges and universities could do for their students is to offer a personal finance class and make it mandatory for all students.In my senior year, I took a personal finance class which gave me a lot of information on savings, credit, mortgages and retirement planning. Though I don’t remember any of the formulas I was given to calculate things like how much I need to save now to retire with enough, I know they exist and can look for them later. I can’t remember exactly what the difference is between fixed and variable interest rates, but again, I know there is an important one and will be more likely to consider it when I have to decide. The class was useful mainly because it gave me a greater awareness of my finances and more information about my financial options. The problem with this class was that not nearly enough students could squeeze it into their schedule among all of the other requirements for it to benefit them.
If schools are going to require things like English 101 (how to write a college essay, which you’ll never use outside college) and Math for Dummies (x + 2 = 4, find x), why not require students to learn about their own money, which they will use everyday? Even better, why not allow students to take a class like this in place of another requirement, like a basic economics or sociology class?
As always, I’d love to hear your comments!
More apt would be a class on how to pick a career that would help you recover your tuition costs AND plan for retirement. But that would expose students to the high cost of an education that does not always translate into adequate income compensation, often for years.
The best advice is to pursue your after college career while living low. Which is harder than you might think. That first paycheck is your first taste of financial freedom and you are more than likely to spend it – after years of living on tuna and beer – than save it.
If you save only 5% of what you earn when you graduate, you will be far better off than someone who saves nothing. From then on, save a quarter to a half of every subsequent pay increase you receive and you should be fine.
Thanks for the comment. I (and my personal finance professor) agree with your advice for all of us, but it’s unfortunate more people aren’t exposed to it and that it can be quite difficult to follow when juggling loan and credit card payments from college.