Why is Personal Finance Education Important?

Credit card and personal finance education on the agenda in NJ

New legislation in New Jersey’s state government would require personal finance education including a variety of detailed explanations on credit and debt terminology and consequences for card applicants.

The bill sponsored by New Jersey state Senator Barbara Buono and passed unanimously by the Senate Commerce Committee would require lenders to register with colleges and universities annually to announce their presence on campus.

The bill would also inhibit lenders from offering a slew of freebies to young adults that sign up for a credit card.

Buono commented on the importance of personal finance education saying, “Promotional sales gimmicks and students’ own ignorance about the factors playing into their personal credit and credit card debt result in many young adults getting in way over their heads. By informing them of the facts and eliminating sales gimmicks, we can hopefully empower students to make better credit decisions.”

As the bill moves through the full senate, the Philadelphia Inquirer is reporting that campus officials generally support the measure.

Rowan University spokesman Joe Cardona hailed the bill as important legislation. At Rowan, credit card companies have been banned from on-campus solicitations for over 10 years, reports the Inquirer.

Uptick seen in personal finance education

Attendance at personal money management classes is up both in the classroom and online, but why is personal finance education important?

The Wall Street Journal is reporting significant increases to education and “financial literacy” classes that are hosted at local community spots, universities, and online from educational institutions like MIT.

Some people hoping to learn about the effects of the credit crunch, the status of the real estate market, and economic theory are apparently turning to OpenCourseWare financial tools which are much like a virtual class to learn the importance of finance.

Lecture notes, study guides and exams are available from this online offering of more than 180 business and financial education classes from nearly 250 universities globally.

High school students are also taking more personal finance education classes as the economy increasingly impacts how they will handle credit decisions in college and their plans for future careers.

Schools across the nation are reportedly realizing the importance of personal finance and making personal finance education courses and know-how a top priority.

Choices in Finance Education

The finance industry offers a plethora of options to students wanting to join the finance profession.

Today’s finance profession is not limited to just the accounting jobs. With the right kind of finance education, a finance student can find himself suitable for a variety of finance roles. Most finance careers require you to be good with numbers and have knowledge of basic business statistics. Let’s take a look at some of the lucrative financial education options.

Accountancy: This is the most widely popular financial career. Commonly referred to as a public accountant, you learn about to prepare and maintain a businesses financial records. You also learn about taxation and other financial aspects of the business. Education in this area is very comprehensive, and the exam is considered quite difficult. Apart from public accountants, there are also other specialized fields such as cost accountant, management accountant, and tax expert.

MBA Finance: Another popular area in finance education is the MBA in Finance. This program is at the post-graduate level and is offered by most universities as well as business schools. An MBA Finance degree opens up career opportunities in a plenty of areas, which include banking, financial analysis, financial markets, research, etc. In general, the reputation of an MBA Finance is measured based on his skill level and the reputation of the college from where the program was completed.

Financial Planning: This is one of the most sought after professions in the finance field. As a financial planner, you are required to manage the personal finances of individuals. You are expected to invest people’s money in the best assets based on their risk profile and also advice them on various matters such as taxation, real estate, among others.

Finance Certifications: As the finance profession has grown, many new finance certifications have emerged that help students get equipped with very specific financial knowledge. For example, the Certified Financial Analyst (CFA) designation helps you become a financial analyst. There are popular certification programs for becoming risk managers; these are Financial Risk Manager (FRM) offered by GARP, and Professional Risk Manager (PRM) offered by PRMIA. If you are interested in Alternative investments, then you have the option to become a Certified Alternative Investments Analyst (CAIA). There are financial certifications in almost every area of finance.

Personal Finance Programme To Be Introduced in Schools

Young Britons could be set to develop a more responsible approach to loans in later life following the introduction of a multimillion pound financial literacy programme in schools, it has emerged.

Under the 11.5 pounds million objective, primary and secondary school pupils across the country are to receive access to resources aimed at helping them to manage their personal finances throughout their childhood and as they get older. Consequently, as a result of becoming more aware of financial terms and products such as personal loans in their youth, children could be able to manage their money and create budgets more effectively in later years.

Under the scheme, in which funding will be made available from 2008 to 2011, a variety of resources will be centered around Child Trust Funds (CTF). By using CTFs as a way of talking about managing money in maths lessons, teachers could be set to bring “finance to life”. In addition, staff are due to receive “high quality training and support” so as to help them pass on the best possible knowledge of personal finances to children.

Meanwhile, the secondary school curriculum is set to include a specific economic wellbeing and financial capability section, where pupils will be able to learn about budgeting, tax and savings, as well as monetary products such as personal loans and pensions.

Commenting on the announcement, Ed Balls, secretary for children, schools and families, said: “It’s never too early to encourage children to think about money and saving for the future and we want to ensure that every child, no matter what their background, has the financial skills to achieve whatever they want in life.”

He added that as CTFs provide a “financial head start” for children, the need to learn how to manage money is set to become “real and tangible in the classroom”. As a result, he claimed pupils will be able to apply what they have learnt when applying for a loan or setting up a savings scheme in later life. “It is vital children understand how maths is relevant to everyday issues like opening a bank account, shopping and saving,” Mr Balls claimed.

Treasury minister Kitty Ussher added: “Financial understanding is a key life skill. Children need to understand the value of money and how to interact with financial service providers to provide for their own futures. The skills they will learn in class, combined with the experience of having their own savings product, will better equip them to avoid financial problems in later life.”

Towards the end of last month, a Citizens Advice spokesperson reported that the introduction of mandatory personal finance education in secondary schools could vastly improve the general British attitude towards credit. The representative claimed a “lot of debt problems” are due to a shortfall in knowledge about financial terms and confidence when to comes to dealing with money. However, by bringing in classes, children may be able to learn how to budget their outgoings and search for a competitive rate of interest on an unsecured personal loan.