Personal Finance

I came across an article posted by the Wall Street Journal titled ‘Should College Students Be Required to Take a Course in Personal Finance?’ The title instantly caught my attention and I found myself thinking Yes! As someone who has struggled financially, I can’t help but wonder that if I had taken a mandatory course focused on how to manage personal finances as an undergrad, perhaps I would be further along in my goals than I currently am today. Notice that I said mandatory course. I know the younger version of myself would never have signed up for a personal finance course unless it was a requirement. Personal finance has a serious scary tone to it that would surely involve math!

The article started by saying “Being knowledgeable about money management, budgeting and finance is no guarantee of success in life. But ignorance about such concepts often comes at great cost.” (WSJ) By not having all college students take courses in person finance universities are hindering the students chances of becoming successful financially. The article continued by saying that in 2015 the US was ranked 14th for it’s low financial literacy rate of 57% and that multiple studies have confirmed that college students do not understand how their student loans work. (WSJ) When college students graduate they are often starting out with tens of thousands of dollars worth of debt. Shouldn’t Universities be ensuring that their students know how to tackle paying off this debt without defaulting?

Knowing how financial instruments work is an important life skill. Wall Street Journal says that “Teaching personal finance is not about describing financial products, it is about teaching the principles of financial decision-making so that people understand how financial instruments work.” (WSJ) Knowing how to budget and understanding inflation are skills that will help people become financially stable. The article continued by saying that the lack of understanding has not just hurt people individually but collectively and this is a large contributing factor to our country's current economic state.

I found the questions that the Wall Street Journal was asking focusing on the future of current young adults very interesting and also a little disturbing.  

“Looking ahead, will young people saddled with student loans be less likely to buy cars and homes? Will their ability to engage in transactions that require not just liquidity but good credit ratings be hampered? Will they veer away from starting their own businesses or pursuing advanced degrees? If they are not saving enough for retirement, will they have to be rescued from poverty in old age—and at what price to the country?” (WSJ)

These questions scare me because some of them have already come true and I want to prevent the end one from happening. I don’t want to have to be rescued from poverty. I want to possess the tools and knowledge to become financially successful. It’s not like I am even worried that I will never become rich, being rich has never been a goal for me. All I really want is to be able to support myself and my family at a comfortable level. Bills paid, food on the table, and presents under the Christmas tree. I have a feeling there are many other people that feel the same. I think financial stability would become more attainable for younger adults if their institutions insist on them taking a personal finance class while being an undergraduate. This class would provide life long tools and skills that could save many people from making irreversible financial mistakes.