18.12.13

IF THE HIGH SCHOOLS WON'T DO IT.

A professor of corporate and managerial finance discovers students discover gaps in more salient financial savvy.
Personal finance courses get short shrift for several reasons. The content is viewed as too “vocational” and lacking in rigor—even remedial. Hardly any institutional special interests champion its inclusion because there are few prestigious journals in personal finance, and research and professors who win grants focus on much grander finance topics. Since there is little prestige in teaching personal finance, many senior faculty avoid it, and the course is often delegated to adjuncts. In fact, many students enroll in personal finance as an elective and seemingly “discover” the course because of its absence from the required list.

From an instructor’s perspective, however, the experience of teaching personal finance is remarkably positive because students almost always express gratitude for having learned the material. In contrast, students rarely express such enthusiasm when I cover internal rates of return or net present value in my managerial finance courses. Students immediately see the value of learning personal finance material because it directly impacts their lives.
It's an opportunity, starting with elementary school.  Investors of the future are going to be better able to spot the traps in the more complicated financial instruments, including adjustable rate mortgages and credit card cash advances, if they understand checking and passbook accounts first.

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