Recent global financial developments, from the mortgage crisis to accumulating debt from credit cards, have made the necessity of understanding finance more crucial than ever as a tool for life.
According to researchers from the Federal Reserve Bank of Atlanta, though economic concepts are covered in basic core courses in colleges, personal finance education is often dealt with for the first time when students start paying back their college loans.
With fewer Americans understanding the basics of finance—the risks and benefits of credit as well as how to effectively use the banking system, maintain a budget and make proper investment decisions—professionals are emphasizing the importance of college students becoming well-versed in financial concepts.
There are a variety of accessible organizations and events around campus for learning the basics of finance. The Scheller College of Business also hosts a regular seminar with business and accounting professionals who address topics such as mutual funds, forecasting, fixed income securities and risk management. Dates for upcoming finance sessions can be found on the Scheller school website.
In addition, opportunities through SGA’s Joint Finance Committee (JFC) and the Student Organization Finance Office (SOFO) give students extensive experience working with their jointly-allocated financial bills and budgets. These resources are used by the Undergraduate House of Representatives (UHR) and Graduate Student Government to fund projects and events for various campus organizations.
Generally speaking, the website “Money in Your 20s” gives several areas of finance that, if understood early, can help students get ahead and establish lifelong habits for responsible money management.
Budgeting can seem restrictive at first, but professionals stress that it actually provides more financial freedom. When it comes to saving for the future and preventing debt at an early age, budgeting is often considered one of the simplest and most important methods of tracking one’s expenses.
This first involves defining categories for discretionary spending, like groceries, gas money, clothing and entertainment. Taking money out of the bank and allocating it into envelopes for different categories can be a tangible way of keeping up with how much has been spent. It is easy to transfer money between the envelopes, and this prevents overspending while ensuring that the budget stays balanced.
Budget management takes time and can be hard to follow at first, but setting one up is widely considered the best system for avoiding stress later.
Achieving financial freedom also involves managing accounts. Dealing with any credit card debts accumulated as soon as possible is always the best policy, especially if an internship or a job has provided a regular income and more opportunities for borrowing money. These advantages can be used to address any debt concerns before they escalate out of control.
For students graduating soon, student loans can be a growing concern. The “Money in Your 20s” site suggests that student loans should be paid off as quickly as possible. It becomes easier to deal with other financial concerns after they have been dealt with, because it frees up the money that can then be used for profitable investments.
There are advantages and disadvantages to consolidating student loans. On one hand consolidation can lower monthly payments and fix a low interest rate, but it can also extend the life of the loan.
Ultimately, investing in the future requires understanding one’s personal financial situation. By making wise money management decisions prior to graduation, it can be easier to fulfill dreams later in life like traveling abroad extensively, owning a home, switching jobs or starting a business.
Though many students are likely more concerned in general with finals than the prospect of retiring early, taking the time to learn about money and investments can have payoffs in the future and ensure a comfortable living when it matters.