Hey parents,
Just throwing out the question: Do you think that your students are learning money management skills in college? How are they learning about building credit? Is this a problem at home? Do you ever worry about their future financial responsibility?
I can only speak for one kid (a senior in college) and she’s doing fine. She uses a debit card for most anything, is carefl about checking her balance (it’s so easy these days), starting depositing checks electronically before I did, and this year opened a Roth IRA with $1000, completely unprovoked by me. I was so proud! I certainly wasn’t doing that at her age! She applied for and got a Discover card about a year ago, and pays it off immediately. She told me she recently also got a Visa (I guess based on her good habits, since she certainly doesn’t have any income to speak of).
I go to a large state university, I believe that maybe 1 in 5 of my peers would be able to properly handle money/credit. Personally I learn all of my financial habits from sites like Forbes and Yahoo Finance. I have a number of credit cards and a very good credit score for being 19. I have also opened a Roth IRA and contribute to it regularly.
Both of my sons are learning quickly through trial and error (not easy to try to teach anything to people that know everything). Savvier younger one (21), not graduated yet, complains that nobody else in his group has the foggiest idea about it.
My kid took a personal finance course as an elective in college. He said it was one of the best courses he took, and he felt it should be required for all undergrads.
Before heading off to college I went over my daughters money with her. We talked about her savings and how much she should budget for incidentals in college. ( entertainment and extras were her responsibility). She does has a visa to build credit. She is very careful in paying bills and keeping a healthy balance in her account. Like some have shared, she too took a financial planning course in college. She feels it was very valuable, particularly when it comes to investing and saving for retirement.
My son’s college made financial literacy a priority and required for graduation: http://www.champlain.edu/centers-of-excellence/center-for-financial-literacy They don’t want to just help their students, they want to help all students in Vermont.
I don’t know about other HSs, but at mine, we have to pass a financial literacy test after taking a Personal Finance class using Dave Ramsey’s FPU material during senior year.
http://www.forbes.com/2010/07/09/money-personal-finance-stanford-leadership-careers-morrison.html
I was at a conference where Mary Morrison spoke about her personal finance course offered at Stanford. She said that “You would think the best and brightest of our youth (students at Stanford) would have a better idea about basic finances.” I believe that there are many students who could use a course like this at their college - and it should be mandatory.
In our state, there is a consumer ed class that must be passed in order to obtain a high school diploma. D put it off until senior year and thought it would be “stupid.” She actually found it very enlightening and not as easy as she thought it would be. For the budgeting section of the course, she had to put-together a real-life budget for her “future self” She chose the scenario of being a graduate student living in Chicago on $30K a year. Let’s put it this way, she gained a whole new appreciation for her parents’ stories that tend to begin with, “when we were destitute graduate students…”
We’ve taught money management since the kids were little. They do great. I like the idea of the financial course in HS though. That should be required.
My kid left for college with excellent money management skills. I don’t know that I had all that much to do with her skills. We’ve always talked money and budget. She had a course in high school on credit and finances. Much of her frugality is inborn though. She’s been money conscience since she was little and managing her own earnings since she was 10-years-old.
D goes to a school with many wealthy kids and she finds that many are just starting to learn how to manage money. She acknowledges there are some pampered princes and princesses on campus with thousands to spend just on recreation and designer dresses but in her circle, even the wealthier kids are on a low budget and watching their pennies.
Speaking as someone in college right now, they don’t teach personal finance here. They haven’t even offered the only personal finance course these past few years (and this is a large state flagship). However, I’d like to think that college students are capable of doing research online and teaching themselves. I did that and learned how to begin investing in a low-cost index fund, stay away from blowing money on depreciating assets, and establish credit.
I wonder if colleges have a conflict of interest in teaching personal finance.
Kids are at home for 18 years and in college for only four. Moreover, home gets the first 18 years. Why would you wait until the last four years to teach money management skills?
^^ because most kids don’t get it at home. I agree they should.
I do taxes for a living. People’s financial knowledge (or lack thereof) scares me. It should be required in both high school and college so the rest of us don’t suffer the consequences.
I think students who earn money on their own(i.e. work study, off campus job) have overall better management skill
@3bm103 - I completely agree. It is frightening how many people, including highly educated people, are lacking financial knowledge. Ideally, children should learn money management skills from their parents. Too often, however, these skills aren’t taught at home or the parents don’t have the knowledge to pass on to their kids. I think a personal finance class should be mandatory for all HS students.
My kids had jobs, checking and savings accounts, and a debit card in HS. They also had/have a credit card in their own name in college. My oldest (graduated college in 2010) has great money management skills. I’m still working with my college freshman. She’s a natural spender and has a tendency to run up her credit card (which she pays). She’s learning some lessons on her own with my guidance. I am also encouraging her to take a series of personal finance workshops offered at her school. D often responds better to advice that doesn’t come from mom - lol.
My kids had to take some kind of life skills class in HS that included some personal finance management. We started our kids out a young age talking about money and money management. Once they got their first jobs I started IRAs for each of them with $100 from their checking accounts. Put 10% of all net earnings away monthly.
They are both very good with money and are shocked at how little their friends know.
All those parents who taught their kids about money management , here is a pat on your back ! Know that you are a rarity!
I think most young people would benefit from preparing their own taxes (i.e. while their taxes are still fairly straight-forward). My wife and I prepare our own taxes (with the help of TurboTax), and I think it’s made me more aware of how day to day decisions can affect our family finances.