Financial literacy should be on students' list of priorities

By Molly Sheerer

UNIVERSITY PARK, Pa. -- As the national average level of student debt rises above credit card debt, students’ knowledge of personal financial matters becomes more relevant. Penn State offers a course in consumer and financial skills taught by Cathy Bowen, a professor in the Department of Agricultural Economics, Sociology and Education.

The course introduces individual finance concepts and the knowledge and practices needed to increase personal financial security today and for the future. Bowen believes this subject is an important one that all students should be taught.

“We can see the negative repercussions of people who aren’t financially responsible and their impact on society,” Bowen said. “There are many people in debt, facing bankruptcy or simply not being able to meet their daily needs such as food or clothing.”

Bowen believes that a lot of the financial problems we’re having in society today can be traced back to individuals' inability to manage their finances and, in turn, other resources.

“We assume people know how to manage money, because people know how to earn it,” Bowen said. “However, most people aren’t educated in money management and financial responsibility. Most often, if kids didn’t grow up learning to save, they will never pick up the habit.”

While students’ financial situations are different individually Bowen has several suggestions that can benefit all students. Bowen suggests they begin budgeting their money, understanding credit before they use it, and figuring out where to learn about financial management if they have yet to do so.

Bowen says that juniors and especially seniors tend to be more interested in learning about money management because they’re planning to live on their own soon. For those students, Bowen suggests they continue to budget and understand credit before they use it, and also gain an understanding of possible employment benefits, start to save money for an emergency fund and research insurance options available to them once they enter the workplace. She also suggests that the emergency fund allow enough money for the means to live for three to six months off it, for those times when life may throw us a curve ball.

The most important lesson Bowen suggests for students is learning to live within their means. “There are always going to be people who have more money than you or less money than you,” Bowen said. “You can’t always follow the crowd; you must live within your means to be successful.”

Bowen stresses how important budgeting is because it tells us where we spend our money and how to make the most of it. She says different ways of budgeting work for different people, but the key ways she suggests are: writing everything down and creating and maintaining a spreadsheet or checking out online money management resources like

“Everyone wants money to spend,” she said. “Why aren’t we taking the time to teach people how to manage their money and maximize their personal benefit?”

Bowen believes that not teaching people about money management is a disservice. She suggests that all students take advantage of the opportunity while in college to learn about money management and become more financially literate.

To start, Bowen wants to remind all students that, before achieving financial literacy, they have to first:

-- Know their spending habits;
-- Understand budgeting;
-- Understand credit; and
-- Learn to maximize what resources they do have.

If students are interested in learning more about money management and starting the journey to being financially literate, they can start by looking into Bowen’s class, AYFCE 270.

Last Updated January 15, 2013