Personal financial topics are taught to high school students as part of math, economics, civics, family and consumer sciences, business, life skills, and career readiness classes throughout 45 states. High school students cannot graduate in Alabama, Mississippi, Missouri, North Carolina, Tennessee, Utah, and Virginia unless they take at least one semester of a personal finance course. Iowa is implementing a personal finance course requirement for graduation while Rhode Island, Ohio, Nebraska, Florida, and others have bills passed or are in the progress of being passed.
I contend each American needs personal financial education. This s because about 54% of us have employer-sponsored accounts like the Thrift Savings Plan or 401(k)s. Only about one-fifth of us still have pensions. The remaining 25% are on their own and may be candidates for IRAs and other opportunities. The employer-sponsored plans and IRAs put us at the steering wheel for driving off into the retirement sunset – or off a cliff.
It is a challenge to delay all the competing temptations of immediate gratification that can derail dedicating aggressively to your retirement nest egg. But that is not enough. One also has to judiciously allocate contributions within the employer-sponsored plans and IRAs toward the most appropriate blend of equities and fixed-income choices for their specific risk tolerance and time horizon.
Even if one is fortunate to attend one of the nation’s high schools where personal finance is part of the curriculum, revisit or reacquaint the subject at the college level. If you and/or a member of your family is going to college either full-time or part-time to earn an undergraduate diploma, no matter what the intended field or major will be, consider taking a personal finance course.
Every undergraduate degree presents the opportunity for electives as part of the curriculum. Taking a personal finance course is a nice way to take an elective that will benefit you for the rest of your life. It could change your life. I guarantee it. It will probably be one of the few college courses whose cost will be returned to you many times over. By the way, I am very careful in providing advice to use the word “guarantee”.
Personal financial courses are usually taught at most community colleges. The community college is a great laboratory for teaching personal finance because the diversity of the class membership ranges from recent high school graduates to retirees. Community college courses may even be free. If there is a cost, it will be a fraction of what one could pay at some four-year colleges and universities.
My favorite aspect of teaching personal finance is having the students develop a budget and then their expenses after developing the budget. If for no reason take a personal finance course for the exercise and discipline of developing a personal budget.
And also try to take the course face-to-face rather than the online alternative. The variety among age groups and the experience of students provide great opportunities for the older students to connect with the younger students during class discussions.
Remember, community college course work is transferable to four-year colleges and universities. The state of Virginia’s graduating community college students not only credit for their two-year degree but also guarantees admission to the commonwealth’s four-year colleges and universities.
Something you may find interesting is that many four-year undergraduate finance and business majors may never take a personal finance course. It is very possible to successfully graduate with a Master’s in Business Administration and not take a personal finance course.
For those of you who would like a free personal financial course, I recommend the Personal Finance course offered through the Khan Academy. The program’s structure parallels a high school/early college course. This alternative’s topics are:
- Saving and budgeting
- Interest and debt
- Investments and retirement
- Income and benefits
- Car expenses
- Paying for college
- Keeping your information safe
If you are retired, there are still benefits to taking a community college course. First, you and your spouse can take such a course together during the day or in the evening. Second. your textbook and other materials from the course can be a useful resource beyond the classroom. Finally, some financial planners and CPAs teach at community colleges. This allows you to spend some time with the person in the classroom.
If you feel comfortable with the teacher, then she or he may be a potential candidate to consider as your advisor. Think of it this way: You have indirectly interviewed him or her from a student’s perspective.
However, I will caution you to avail yourself of using The Financial Industry Regulatory Authority’s online tool, BrokerCheck, as a starting point for vetting any potential financial advisors. BrokerCheck gives you a breakdown of the person’s employment history, regulatory actions, investment-related licensing information, arbitrations, and complaints. If a candidate person clears BrokerCheck, however, she or he may not be the best match for you. You have to dig deeper within yourself to understand what your specific goals and needs are. The financial advisor who is a great educator may not be the best fit for you and your family.
Understand foremost what you want to accomplish before meeting with a potential financial advisor. The American Association of Retired Persons (AARP) last year published a nice article to help you. Embedded within the linked article at AARP is yet another link, outlining AARP’s “gold standard” to assist you in looking for further information to think about when seeking out the services of a financial professional.