Posted by: Kate Ashford | January 7, 2011

Should Personal Finance Be a Required College Course?

College textbooks

Microeconomics, Psychology, Student Loans 101...

It’s blatantly obvious to me, based on the amount of debt and financial trouble Americans manage to get themselves into, that many people out there don’t particularly know what they’re doing, when it comes to money. People spend more than they should, spend more than they earn, borrow more than they can repay, and don’t save for college or retirement.

And it starts early. Almost three-quarters of college students make risky financial decisions, according to a study from the University of Arizona, including maxing out credit cards, carrying a balance, paying bills late, and taking out payday loans.

I spoke to a financial planner a few months ago who thought that colleges should be required to offer a course on personal finance, and that students should be required to take it.

Guess what? In Burlington, Vt., at Champlain College, that’s exactly what’s happening.

Well, not exactly. But according to this New York Times article, the college requires undergrads to attend two “financial sophistication” courses on credit and basic budgeting, and it plans to add more on student loans, buying or leasing a car, and understanding the value of employee benefits.

I think this is an outstanding idea. When I was in college, I took a class on personal finance, and I still use the information I learned there. But even that class didn’t offer information on topics that trip up college students all the time, such as student loans and credit.

Frankly, a course on student loans and credit might be appropriate in high school, when students are about to run the gauntlet of college applications and financial aid. And the whole thing might be moot if parents were taking a more active role in their children’s financial education.

Did your college offer a personal finance course? And did you take it? (And if either answer is no, do you wish you’d had the option, or that you’d taken advantage of it?)

(Photo by nikkirosety on Flickr.)

About these ads

Responses

  1. My college didn’t offer a personal finance course, but all the major credit cards were there with free t-shirts and koosh balls if you signed up for a card. Students flocked to the tables. I was not swayed.

    I was fortunate because my parents taught me about being held accountable for my purchases. My two children, husband, and myself live below our means in my opinion. One of my ‘jobs’ as a 12 year old, was to clip coupons for the family and file them in a recipe box. It taught me to think about what I was buying. What I was spending.

    • I think one of the perks of the new credit card rules will be that college students under 21 won’t be able to get a card without a parent’s co-signature. Maybe it’ll cut down on all the on-campus credit card marketing. (Or at least, it will cut down on the students who can actually respond to it.) I got a couple of credit cards in college that I probably wasn’t ready for, and it took me a while to figure out how to manage them properly. Thanks for the comment!

  2. […] This post was mentioned on Twitter by Team Bundle. Team Bundle said: It would help a lot of people! RT @kateashford: Should personal finance be a required college course? http://wp.me/pLfBJ-lG […]

  3. It wasn’t my college that offered a course, but my high school. They even had some people from Wall Street make a presentation on stocks and bonds. We even learned about balancing check books, how to save when receiving net income, but what we didn’t learn was how taxes worked. I think that should be a college course. With regards to handling phone bills, car bills, mortgage bills, etc, parents should take the lead in that. My father once took me to meet with a bank manager to learn about opening a savings account and the importance of handling a checking account. It was a valuable lesson I am grateful to my dad for. That’s my two cents :).

    • You’re lucky that your high school offered a course and that your father took it upon himself to educate you. Sounds like a great way to start your financial life. Thanks for the comment!

  4. Starting this year, VA has added a high school graduation requirement of a 1-credit Economics and Personal Finance course. While I think the course is valuable it is frustrating that it will impact art and music programs at many schools (heaven forbid it replace PE instead…).

    • Sigh. If it’s not one thing, it’s another, right? If only it could just replace study hall.

  5. I’m currently a college student in my third year, and I definitely wish that there was a class offered at my school that gave financial advice. Now that I’m getting closer to graduation I’ve been looking into the best the ways to handle the debt I’ve accumulated over the years through bad credit decisions and student loans. I just discovered this blog today through the article you wrote on the Bundle, and looking at the articles has given me some insight into what to I should start doing to secure a better financial future. However, having an entire semester course devoted to this kind of advice would be ideal.

  6. I agree that a personal finance course in high school would be beneficial. What I can’t figure out is why credit cards are such a mystery to so many. What’s so hard to understand in this statement: “Don’t buy anything with a credit card that you can’t pay for at the end of the month”? Problem solved. What is hard for me to understand is why it seems so acceptable to so many that carrying a credit card balance is considered normal and average. Bunk!

    • Debi, I think we, as a society, have grown far too used to being in debt in general: mortgages, car loans, and credit cards. And I also think that a lot of people get into trouble when they get their first credit card in college, before they’ve really learned how to use one. They graduate with significant debt, and even if they realize they should be spending within their means, it’s tough to get back on track. I’m hopeful that new credit card legislation (that keeps cards out of teen hands without parental supervision) might help. Thanks for the comment!


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

Follow

Get every new post delivered to your Inbox.

Join 43 other followers

%d bloggers like this: