I walk out in front of a room of future MBAs, accountants and business types the other day and ask them if they know what a FICO score is, what THEIR FICO score and where the hell to get it.
I get a room of blank stares. Oh sure, they know all about GDP, the Fed Funds rate and the U.S. trade deficit, but they don't know a damn thing about their personal financial life.
If you ask me, every college and university that is not teaching basic personal finance -and making it a requirement for graduation-is doing a crappy job of preparing its students for the real world. And isn't that a big part of what college is all about?
I have news for you, an intimate understand of GDP is not going to help you out in life one iota. Trust me. Same with most all economic terms, trends and data points. Nice info if you want to bore everyone at a cocktail party, but absolutely useless when it comes to living your life.
I would love to know if any of you had any course, or seminar, in college that taught you anything about financial info that has a huge impact on your future. Did anyone teach you about your FICO score, how to deal with credit cards, and god forbid, how to handle your student loans once you are out of school? (Did anyone tell you that consolidation is damn smart, especially the past few years when interest rates have been so low?)
And while you're at it, let me know the three financial lessons you wish someone at school had taken the time to teach you. Something that you had to figure out on your own much later, or something you are still clueless about. I want to know exactly what you think you could have learned in college that would have made your YF&B years easier. I promise that I will make sure your questions get adressed here, or at my website .
I was never taught a thing in college and as a result, I ended up spending a lot more than I could afford over the years. It's only more recently I've realized how to work this out and get myself back on my feet.
Three things I wish they taught me in college:
1. How to use money managment software or just a checkbook register to manage your monthly budget.
2. How to make a monthly budget.
3. What credit is, how to manage it, and what it means to run it up or pay it off.
None of these simple concepts were taught to me. I had to go out and figure them out in the real world.
Posted by: Elana | April 01, 2005 at 07:08 AM
When I was working on my finance degree, personal finance was on the list of classes that could be taken as one of my 3 finance electives. We did talk about loans in general and budgeting among everything else in the textbook, but never about FICO scores. I know more about consolidation because of Sallie Mae than because of my 27 hours of finance courses! The problem starts with the textbook authors--if its not in there, the profs probably won't bother to cover it! I'm now working on a masters in CJ and we've spent more time the past couple of weeks talking about the importance of wills, trusts, power of attorney docs, and advanced directives than I bet the finance majors are. A common sense personal finance course should be a requirement for all college graduates, not just something that mainly business majors take for an easy elective.
Posted by: christina | April 01, 2005 at 01:01 PM
Suze, the college I attended won't give you a degree unless you pass a swim test, yet there's probably a greater likelihood of their graduates drowning financially, rather than literally. I wish I could narrow down the choices to 3 financial lessons I wish I had been taught in college. Your book for YF&B'ers covered the whole spectrum of what should be taught in school, and it should be mandatory reading at every institution of higher learning in the country. I wish there had been a "Suze Orman" back when I was in college!
Posted by: Debbie | April 01, 2005 at 06:54 PM
During my college years, I ran up more credit card debt than a female on her first trip to Marshall Fields! So I had to find a way to produce income. I looked around and found Cognigen. It's been good and bad. After six months of showing the business to everyone I knew I was bringing in over $1,500 / month. Unfortunately, I ramped up my spending to match my income. Now, my business still brings in monthly revenue plus I work a 9 - 5 ... But the mortgage, the Lexus, the custom-made suits, make me a YF&Ber... Suze your advice has helped me to GET REAL!
Thanks
Posted by: Jay | April 02, 2005 at 10:28 AM
During my college years, I ran up more credit card debt than a female on her first trip to Marshall Fields! So I had to find a way to produce income. I looked around and found Cognigen. It's been good and bad. After six months of showing the business to everyone I knew I was bringing in over $1,500 / month. Unfortunately, I ramped up my spending to match my income. Now, my business still brings in monthly revenue plus I work a 9 - 5 ... But the mortgage, the Lexus, the custom-made suits, make me a YF&Ber... Suze your advice has helped me to GET REAL!
Thanks
Posted by: Jay | April 02, 2005 at 10:28 AM
The problem? My new employer offered a 401(k) with a 4% match, except they required me to wait a year to enroll in it. Knowing that my living expenses always seem to adjust to my income, I was afraid a 4% payroll deduction would be tough to swallow in a year's time.
The solution? My employer did offer payroll deductions for series EE bonds on day one. I started a 4% salary deduction with EE bonds immediately. When I became 401(k) plan eligible, the transition from EE bonds to 401(k) was seamless, and had no impact on my daily costs of living!
Posted by: J.P. | April 05, 2005 at 08:15 PM
Honestly, I think most of this can be covered in 10 to 12 hrs in some sort of 1 credit seminar or just workshops provided by schools. I don't think that a full blown Personal Finance course is necessary. When I graduated I landed a topnotch investment banking job and blew most of the money. It wasn't until I was about 28 that I realized what a waste it had all been. I'm now investing heavily in my retirement and saving big chunks of money for a home purchase.
Posted by: sprmario | April 08, 2005 at 05:41 AM
I just looked up my credit history for all 3 companies AND recieved my FICO score from one of them. The problem: My credit reports look great, no late payments good credit to debt ratio, but my FICO score is still only 641. I don't understand?! Also, there is a big car loan in my name that is almost 2 years old and it isn't showing up on any of my credit reports, what's up with that?
Posted by: Jessica | April 14, 2005 at 11:40 AM
As a political science major, I am required to take 13 credits of "real" science (i.e. biology, astronomy, etc.) which have no bearing on my future career choice. Professors and deans love to talk about preparation for the "real world" but they fail to demonstrate any real interest in making sure that students have the tools they need to make it in the real world. And they seem to be okay with allowing credit card companies to set up booths all over their campuses. I really don't think that they get it.
Posted by: Heather | April 15, 2005 at 09:58 PM
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Posted by: Secured Homeowner Loans UK | April 16, 2005 at 02:31 AM
From what I remember, my university did not offer a general course in personal finance & I wish it did! Three topics that would be helpful in a personal finance course:
1. Retirement Planning
2. Understanding Insurance
3. Personal Investing
I was fortunate that my parents (it really starts there) that taught me the value of money. Through their experiences, they taught me the pro's and con's to using credit cards & instilled the value of saving for a rainy day using a money market. They are not money guru's & have much to learn, but I am more comfortable learning about personal finances as a result.
Posted by: Kristine | April 25, 2005 at 07:31 AM
Hah!
Are you kidding me? I'm an I have an honours BA and I never had to take a personal finance course, ever.
I learned how to budget only 2 1/2 years ago, and thank goodness I did. I use my credit cards wisely, and never pay interest on them. The only thing is I wish I knew how to pay off my student debt faster, and I think it should be a required course at universities. I don't even think there is one course offered in this at my school.
Posted by: Maria | April 27, 2005 at 09:48 AM
I concur with all the previous comments.
Also, perhaps money management lessons should come at an even earlier age. It doesn't make sense to me how high schools, even junior high schools, require the mastery of abstract math concepts and formulas...yet not one of those schools require basic personal financial management.
Posted by: Anna | April 27, 2005 at 08:16 PM
Suze- You talk a lot about paying off credit cards but not much about what to do after they have gone to collections. What does it mean when the company offers a "pay off quote" that is much lower than the original balance. Does paying this amount hurt my credit? Is it worth it?
Posted by: Jaime | May 01, 2005 at 04:11 AM
3 financial lessons I wish I were taught are:
1. How to do basic taxes (Federal and state)
2. How to SAVE Money on any income level
3. Why you need to save money!
It is really a crying shame universites and colleges and high schools for that matter don't have a required "LIFE" course. Not everyone has parents that are helpful in teaching their kids about money. Not that its the universities job but if you are paying for the education, the course should come with the degree!
Posted by: Gina | May 01, 2005 at 08:46 AM
This article was released in yesterday's Boston Globe:
http://www.boston.com/business/personalfinance/articles/2005/05/04/money_talks_but_kids_dont_listen/
I thought it was very interesting and relevant to this post.
Posted by: Elana | May 05, 2005 at 10:20 AM
I agree with the majority of the comments above. I really wish there was some type of personal finance course for everyone at the university I attended. Although recently they added a financial planning degree (wow! wish it were there back in my day, I would have majored in it!). The three things I wished I had learned back in college:
1. Credit cards
2. Investing
3. Importance of saving
I knew the basics of #3 and #2, but wished I knew back then what I know today. #1 especially for those in college and just graduating. You can also learn from your parents or other family members or close friends but it also is so very nice and beneficial to maybe be able to take a course or be provided with the right resources (thank goodness for the internet and people like Suze!).
From all this experiences, I will be enrolling in a certified financial planner curriculum to be able to sit for the CFP exam. Thanks Suze for the inspiration!
Posted by: Jennifer | May 16, 2005 at 08:03 AM
Colleges should offer personal finance or consumer economics every semester, but not require it. Some might need it, but it might be too basic for others. I don't believe in someone blaming a lack of personal finance education as a reason for running up their credit cards.
High schools and earlier should have personal finance and get rid of less useful subjects like geography. I don't see how people can vote in elections without basic personal finance knowledge.
Posted by: Tuan | June 06, 2005 at 02:03 PM
I took a Financial Accounting class thinking it would imbue me with some handy personal finance knowledge. Instead, it ended up being a horrible weed-out course and turned out to be my first and only C in college. There was not one iota of personal, common sense finance knowledge.
Thankfully, my mom is an accountant (one who knows how to manage other people's money AND her own) and taught me many, many things about finances, so I didn't feel totally helpless.
I still have three things I wish I had learned in college:
1. Investing for retirement
2. The power of small amounts of money when added up and smartly invested
3. Managing a paycheck
Posted by: Paul | June 08, 2005 at 04:58 AM
I have a B.A. in psychology and never took any finance or business courses in college...well minus a Intro to Business course. I remember that there were booths all over campus where you could sign up to get a credit card and get a free t-shirt. Hell I joined a sorority for free t-shirts! lol So of course I'd do 5 min of paper work for one. I had NO idea what a horrible mistake this was and I had NO idea about personal finance. I can NOT believe that universities allow credit card companies to do this, especially without offering, or requiring a personal finance class. I could go on forever about this..but I'll stop. ;)
Posted by: Sarah | June 08, 2005 at 02:22 PM
Hi Suze - I definitely think that colleges should require some sort of personal finance course in the first semester of freshman year. It really should be ealier, in the form of a couple of semesters in high school, but I guess we shouldn't expect the public school system to teach something that every student could really use and benefit from throughout their life. No slam meant to teachers - who I greatly admire and respect - only to the antiquated public school curriculum in general.
If such financial education were required, and emphasized early on, students and other young adults might think at least twice before digging themselves an incredible hole (in the form of excessive student loans and credit card debt) from which they have to crawl out of upon graduation.
I am currently in the process of extricating myself from credit card debt incurred primarily during college and while I honestly knew better (I got a BA in Math for crying out loud), I don't think that a lot of people truly understand the injury they inflict upon themselves financially and emotionally when they are living in a state of financial ignorance - a state that our educational system is to certain extent responsible for.
To conclude, I really wish that mandatory financial education were provided which stressed the comprehension of:
credit card usage/debt
FICO scores
insurance (life/health/home/etc)
investing and retirement planning
interest rates and their effect on loans
early and consistent saving and investing
basic trust/proxy issues
We can't expect Suze to teach the entire world to smarten up , though it seems she is trying her best. Thanks Suze.
Posted by: pamela | June 09, 2005 at 12:08 PM
For the past several years I have had this conversation many times over. However, I think college is to late and misses the majority of people who find themselves in finacial turmoil. Basic personal finance should be taught at the high school level. If it were left up to me, each and every high school senior would get a semester of personal finance coupled with a semester of basic lifesaving (CRP, First Responder Training, etc.), both real world skills that are a real asset to society.
Posted by: Brad | June 20, 2005 at 05:59 AM
Teaching personal finance in College? How about before one graduates from High School?
My high school offered several courses designed to help students prepare for the "real world" when they turned 18.
They understood that not all students would go on to college, and would probably need to know how to support themselves. Here are just a few of the subjects my high school offered.
"General Business": taught me how to type, balance a checkbook, set up a budget and prepare for a job.
"Singles Survival": Learned how to rent a apt./house, set up utilities, find a roommate, etc.
"Home economics": taught me how to shop for and prepare food.
"Sewing": showed me how to make a blouse, pants, sew on buttons and hem pants the right way.
"Typing": for all those term papers I never did because I was too busy starting a business instead!
I have my own business. I frequently hire new college graduates for seasonal help.
They are happy to be paid $10.00 an hour. I'm always amazed about how many students cannot get a job in their chosen field. Or have lost interest, before the ink on their diploma has dried.
One girl I hired has a degree in Art Therapy. Her first job out of college, was an Activities Director in a nursing home. She didn't like old people so she got a job working for human services helping the indigent as well as prisoners with art therapy. One person tried to assault her. She quit. She took a job working at a bookstore.
I wonder what she was thinking she would do when she initially decided to pursue a degree in Art Therapy?
People need to wake up and take courses that will prepare them for real life. Better yet, don't bother. I LOVE hiring overqualified graduates to run my business!
Posted by: Anonymous | June 26, 2005 at 10:48 AM
Teaching personal finance in College? How about before one graduates from High School?
My high school offered several courses designed to help students prepare for the "real world" when they turned 18.
They understood that not all students would go on to college, and would probably need to know how to support themselves. Here are just a few of the subjects my high school offered.
"General Business": taught me how to type, balance a checkbook, set up a budget and prepare for a job.
"Singles Survival": Learned how to rent a apt./house, set up utilities, find a roommate, etc.
"Home economics": taught me how to shop for and prepare food.
"Sewing": showed me how to make a blouse, pants, sew on buttons and hem pants the right way.
"Typing": for all those term papers I never did because I was too busy starting a business instead!
I have my own business. I frequently hire new college graduates for seasonal help.
They are happy to be paid $10.00 an hour. I'm always amazed about how many students cannot get a job in their chosen field. Or have lost interest, before the ink on their diploma has dried.
One girl I hired has a degree in Art Therapy. Her first job out of college, was an Activities Director in a nursing home. She didn't like old people so she got a job working for human services helping the indigent as well as prisoners with art therapy. One person tried to assault her. She quit. She took a job working at a bookstore.
I wonder what she was thinking she would do when she initially decided to pursue a degree in Art Therapy?
People need to wake up and take courses that will prepare them for real life. Better yet, don't bother. I LOVE hiring overqualified graduates to run my business!
Posted by: Anonymous | June 26, 2005 at 10:54 AM
Suze...you are the best! I have completed your fabulous will and trust kit....being concerned about my unwilled parents; how do I make them see that your product is the gold standard and to not waste there time with our "small minded",money hungery, family friend attorney ? My parents can't understand why you charge so little for the kit... How do I make them see...for there best interest; later in life maybe mine...
Posted by: Anonymous | June 26, 2005 at 05:23 PM