Ball State University student Tyler Van Meter encompasses the mindset of a vast amount of college students around the country. As a college sophomore, Van Meter is already seasoned in the art of maintaining his finances, or at the very least, making sure he has money in his wallet for food.
"I know whether or not I'm out of money," he said.
His story is the tale that many college students live day in and out. Tuition is paid with the help of scholarships and his parents while he fronts some of the payments himself. He is currently jobless due to the lack of available positions on campus and around the Muncie area, and he has little bills to pay besides food, gas and his tuition payments.
"You really have to pay attention to how you spend every dollar, especially for entertainment. When you're out of work and spending any money, the dollars add up fast," Van Meter said.
Ball State is previewing a new Finance 101 class this semester with three sections, and Manoj Athavale, chair of the department of financial insurance, said he hopes to offer 40 sections of the class next fall with plans to register about 4,000 students. In the past, the department offered one introductory course, Finance 110, which is a three-credit hour class that delved deeper into the practice of maintaining fiscal responsibility, he said. Finance 101 will now be required for all university students as part of the new core curriculum.
"Finance 101 is a one-hour credit course that covers basic necessities students need to maintain their own finances," Athavale said.
Athavale said the course is designed to structure a collection of personal finance topics relevant to young adults, including how to balance a personal budget, set up bank accounts or plan for their retirement.
"You may be a psychology or an architecture major and not necessarily think about these issues daily, but everything comes down to managing money and what you have to show for it," Athavale said.
More in-depth examples include understanding certain financial products to attain individual financial goals, understanding the concept of compound interest and learning the financial implications of life-impacting events and how to prepare for them. The goal of Finance 101, taught by finance professor Terry Zivney, is to present information and tools necessary to formulate and act on a plan for personal financial well-being.
"Understanding the concept of compound interest and learning the financial implications of life-impacting events can help students better prepare for them," Zivney said.
Part of Finance 101 will be understanding how specific financial products, including credit cards, can be applied to attain financial goals.
Gary Hemrick, former vice president of Home Loan Bank in Fort Wayne, said recent credit law changes passed by Congress in May will drastically affect the way college students approach using credit.
"Credit card companies have preyed on young college students for a long time. They attract new irresponsible and young adults into signing up for these credit cards and then the students spend more than they can manage and fall into massive debt.These new laws protect young adults from being coerced into a credit card they may not be ready for," Hemrick said.
Joe Jackson, a journalism major at Ball State, had no knowledge such laws were passed but sees the laws as a step in the right direction for the most part as well.
"I can see how requiring a co-signer will be helpful to students who have the available persons to help them, but it will be damaging for students who are mostly on their own and don't have loved ones or financially stable people around them that can sign for them," he said.
Jackson said he is considering taking Finance 101 next semester.
"While my high school already offered a financial class to teach the basic tools to avoid debt, I can see the importance of offering it here in college," he said.
Course syllabus & content outline
- Personal finance planning- Budgeting- Banking- Credit and debt- Housing- Automobiles- Insurance- Taxes- College financing- Investment planning and management- Investing in mutual funds and exchange traded funds- Investing in stocks and bonds- Retirement planning- Retirement accounts
Is Congress making it harder for young people to get a good credit score?
Upon going into effect Feb. 22 of next year, credit card applicants under 21 will need to present a co-signer unless they can demonstrate that they have solitary means of repaying their debt. By creating this new provision, most new credit users will have a watchful eye over their spending habits.
The hope is that by having such restrictions for young users, their spending behavior will become more responsible and lead to less cases of debt and eventual bankruptcy.
However, congress may have inadvertently prevented young responsible credit users from the ability to build a good credit rating; a factor that can truly hurt the future prospects of a newly graduated college student. By requiring a co-signer to receive a credit plan it becomes more difficult to build credit versus building a credit under your name.
This complication will hinder young people's plans to buy or rent property or get a job that requires a credit check.
Source: ABC News, forbes, msn.com
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