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Best College Classes for Financial Literacy
Increasingly, many schools offer financial literacy education through dedicated financial services programs. Students should make it a priority to attend a few money workshops or sign up for one-on-one financial counseling.
But what if your school is late to invest in a financial literacy program?
Don’t fear, chances are high that you can find a course already being taught that covers the same financial concepts and skills you’d learn from personal financial planning counselors.
We’ve compiled some common financial courses that can be found at most private, public, and community colleges and universities across the country. Drawing from her business-major background and experience as a personal finance consultant, Stephanie Bousley provides additional insights into the best classes for learning personal finance skills.
Here are a few of the best one-off classes in departments including finance, economics, and business that you should sign up for right now.
College Courses That Teach Personal Finance Skills
Finance departments teach students how to project future growth and analyze expenditures in order to strategize for a company’s finances. These courses are great for students interested in learning about financial strategy and management.
No matter their major, students should take a beginning finance class since it will be useful to everyone who plans to manage their own finances. If you have any desire to become an entrepreneur or business owner, this advice is tenfold.
Look for a financial basics or personal money management course. Topics covered during the semester might include a mix of career guidance, college financing, budgeting, bank accounts, credit cards, and student loan debt.
The statistics department focuses on theories and methods of data. This includes everything from data collection to analysis and interpretation. Statistics majors often graduate and pursue careers in business, government, medicine, scientific research, and marketing. These types of courses are perfect for the student interested in personal finance as it pertains to portfolio management, stocks, risk diversification, and asset modeling.
Add an applied statistics course to your schedule.
“Statistics class teaches you how to manipulate data and estimate the probability of an event occurring, or look for patterns,” Bousley said. “This could be a useful personal finance skill with regards to investing, buying and selling property or cars, making decisions on whether or not to make a purchase, and so forth.”
Accounting focuses on the everyday management of financial reports and records. Courses in this department focus on the professional principles and processes used to understand and manage numbers.
Search for an accounting 101 or introduction to accounting course. Don’t be offput by the mathematical skills required for these types of courses, since accounting math is relatively basic. In fact, “anyone who can add/subtract/multiply can do it,” insisted Bousley.
“It’s useful to gain a thorough understanding of your finances, where your money goes every month, tracking finances, and working within a budget (since you are learning how to track incoming and outgoing money on the balance sheet),” she said.
“Additionally, it helps with things like negotiating deals,” she continued. “If you’re buying a car and know basic accounting, you know the car appears as inventory on the balance sheet, and they will record your payment as well as any profit. They obviously need to make some profit to stay in business, but most dealerships also have a certain quota of inventory they have to move each month. With some of this knowledge, you can go into a dealership at the end of the month and tell them exactly what you want, negotiating a price that’s fair for you (using comps on similar cars) and makes sense for them as well.”
At the very least, an accounting course should teach students the basics, such as how to do their own taxes, a skill that is often neglected in the standard high school curriculum. As such, it’s important for students to seek this information out on their own and add an accounting course or two to their schedule.
Macroeconomics and Microeconomics
The difference between micro and macro economics comes down to a focus on the individual versus the whole. Microeconomics is the study of economics at the individual, group or company level whereas macroeconomics is the study of an economy at the national level. Either department is guaranteed to offer courses that will help students better understand the economy, including unemployment rates, exports and imports, and gross or net profits.
According to Bousley, these courses are great for personal finance because “[m]icroecon helps one understand how a free market economy works.” Not only does it show how prices are made, but at an individual-level it explains why your salary is the way it is.
“This could be useful in evaluating potential career fields,” she said. Further, “[i]t also explains conditions of efficiency in consumption or production, and teaches one how to eradicate inefficiency from the economic system.”
What does this mean for you? It can help you make financial decisions by understanding how to eliminate inefficient spending or even by knowing the best time to buy or sell a house based on the market.
At some colleges and universities a business degree will cover aspects of finance, accounting, marketing, and operations, and human resources. Business courses prepare students for corporate industries by learning about the fundamentals of these various aspects. Students majoring in business shouldn’t be the only ones who learn about principles that affect all of us in our daily lives.
In order to glean this valuable information, take an introduction to business course. This class should examine economic activity in various countries, including the United States’ free enterprise system, in addition to what this means for a company and a working individual.
Bousley suggested a quantitative business analysis course.
“This is a class about data analysis and modelling and is basically a crash course in using MS Excel,” she said. “You learn simple- and multiple-regression models, forecasting, business simulation models, decision analysis and optimization models for resource allocation.”
All of this information will come in handy.
“Working with practical math and building formulas to understand resource allocation/optimization is something you definitely do when managing personal finances,” she said.
Also, knowing how to use Excel is a valuable skill.
Outside of your job, you’ll use statistics to understand how interest works, how much to save and spend each month, and even how much to set aside to save for a downpayment on a house.
Stephanie Bousley is a student debt and personal finance consultant based in Los Angeles. She holds bachelor’s degrees in international business and psychology from the University of San Francisco and went on to complete an MFA in film production from New York University’s prestigious Tisch School of the Arts. After grad school, she was nearly $200,000 in student loan debt. Three unpaid internships in the film industry later, the debt snowballed to $286,000. Wanting to conquer her student debt, Stephanie read several personal finance books but became frustrated at what she perceived as their patronizing voice, and failure to address the complex personal issues that accompany financial difficulty. Having dealt with her own financial challenges, depression, and a change in careers (solely due to her debt), she chose to take a more holistic approach to personal finance and became increasingly interested in helping others do the same. Her upcoming book will be published by Familius Publishing in early 2020. You can find her on Twitter at @TheDebtRebel.