Millennials are better educated and more economically active than their generational predecessors, but an identified shortcoming of this college-age generation is the target of a new course being introduced at Clemson University this fall.
The College of Business is offering Personal Finance-2010 to address what surveys have identified as a deficiency in the 18-34 age group, which numbers 80 million members nationwide.
“Though well-educated, this generational group is often engaged in problematic financial behaviors and it’s exacerbated by the debt they’re amassing in preparing for careers,” said Josh Harris, course instructor and a lecturer in Clemson’s finance department.
“For a variety of reasons, millennials do not have the basic financial skills that their Baby Boomer parents had at their age. When you look at the school debt they’re taking on and the fact they will be the wealthiest generation ever 10 to 15 years from now, it’s critically important to them — and for the country’s economic health — to be on a path leading toward financial security,” Harris said.
National studies have shown alarming signs of financial illiteracy among the generation. A PricewaterhouseCoopers study indicated 30 percent of the generation have overdrawn checking accounts and more than 40 percent are engaging in risky financial behavior, such as selling valuables at pawnshops and taking out auto title and payday loans.
Harris said Clemson’s one-credit course will teach the basics of financial goals, including budgeting, and provide a broad overview of credit, including credit cards’ interest rates. “We’ll also go through the processes of buying a car and home and whether you should rent or buy. Then we’ll look at insurance policies, sales contracts and even touch on the importance of starting early on retirement planning.”
The average Clemson graduate has accumulated $30,000 to $37,000 in student loan debt, according to Harris. And to pay off that debt in approximately 10 years, the average monthly payment would be in the $300 to $500 range.
“That’s a big number for someone in their early 20s working in a metropolitan area and living on a single income. And it’s a more ominous mountain to climb for someone who doesn’t have good financial skills,” added Harris, a former personal banker who is pursuing certified financial planner (CFP) certification.
The course was open to registration earlier this summer and a broad cross-section of the student population, sophomores to seniors, have already signed on. Finance department leaders anticipate there upwards of 300 students enrolling in the online course.
Freshman Creshada Jackson of Laurens, said she views the personal finance class as essential for students about to embark on careers.
“As we join the workforce and earn incomes, it’s crucial to understand how to make sound financial decisions in order to accumulate wealth and achieve one’s goals. This class should give me a better understanding of how to avoid and eliminate debt and make the most of my career earnings through informed financial decision-making.”
“We created this course out of need,” Harris said. “As Clemson prepares its students for good-paying careers, they need these kinds of life skills to navigate their financial futures. It’s also important for the nation’s economy that the estimated 80 million millennials get their financial literacy act together.”
(Written by Rick Uhlmann, Clemson University College of Business.)