VCU students largely illiterate on financial issues

Colin Hannifin
Columnist

Commonwealth Times’ Twitter

A recent poll conducted on the myVCU home page revealed that 65 percent of students have never taken a financial literacy course.

Granted, this sort of poll has a few problems – such as self-selecting bias – and should not be taken as verifiable fact, but it still highlights an important point. VCU does an awful lot for its students, but one of the university’s greatest disservices is not ensuring that every graduating student has taken at least one comprehensive, faculty-taught course in financial literacy.

Financial literacy is one of the most important things for young adults to take from their education. Especially in these times of economic hardship, we need to know the basics of finance, like how to best arrange our money to buy a car and a home, as well as what’s most important when considering job offers. Instead, many of us rely on the security of a plastic credit card or agree to terrible loan terms to secure that vehicle or house.

Our financial environment is increasingly complex. Large banks and institutions have been failing and merging for the past several years. Billion-dollar scandals rock the financial world, and stock prices fluctuate constantly and unpredictably.

Many students feel overwhelmed when thinking about entering and partaking in the greater economic world and the issues that accompany it, such as when and how to start saving for retirement, knowing that social security may not be there when they are ready to retire in several decades.

VCU does offer several courses that cover the basics of finance. Financial management, FIRE 311, covers the basics but focuses largely on how finance works in the corporate world. Meanwhile, personal financial management, FIRE 315, is a less math-heavy course with fewer prerequisites that is all about personal finances.

I’ve had the fortune to take both courses, and I’ve learned a great deal from them. FIRE 311 drives home the benefits of diversifying stock portfolios, while showing how companies raise capital. FIRE 315 focuses more on the personal side of finances such as when and how to buy a car and the best methods to build good credit.

I believe every student should be required to take FIRE 315 or something very similar. Here are some tips I picked up from the course: On average, personal spending decreases approximately 30 percent when you switch to using cash instead of debit; if you take out a 30-year mortgage and pay the first payment the day you take out the loan, you’ll pay off the loan in only 27 years. When you’re young, you can afford to take more financial risks like investing in stocks and derivatives as opposed to bonds and cash. These are only three facts from my notebook full of tips, tricks and advice from the instructor.

Of course, people are apt to point out that VCU does require all humanities and science majors to take HUMS 202, choices in a consumer society. This is true, and a good step in the right direction, but it’s only a one-credit course that can be completed over a weekend.

I know, even as an accounting major who will be going to work into the financial world, that I got a lot out of FIRE 315. The knowledge I obtained does not only benefit someone already exposed to the financial world, but rather can and will benefit everybody who has the opportunity to take these courses.

A major goal of college is to prepare students for life after graduation. One of the most important lessons for our personal futures is financial literacy. As VCU attempts to prepare us for life after we walk across the stage, financial literacy should not be an afterthought or a one-credit online course. Like English, science and math, it should be an integral part of the general requirements of every student.