- January 15, 2016
- Posted by: Chowdhury Shahid Uz Zaman
- Category: Finance
Think about your earliest experiences with money. Most children learn about the value of money by doing household chores and earning an allowance. This is more than just a way for parents to alleviate the burden of housework and have an excuse to limit the amount of spending money kids take out of their pockets. It’s also a way to prepare kids for the eventuality of entering the working world.
The chore situation mimics the workplace in that parents play the role of employer, children step into the shoes of an employee, and allowance acts as a paycheck – a reward for following directions and satisfactorily completing work.
Unfortunately, that’s often where the lesson ends. Few parents continue on to teach their kids about managing finance as an adult. Once children have their spending money they’re allowed to us it however they choose. Most blow it on frivolous purchases like candy or toys. What would happen if parents made kids pay a portion of their allowance for bills like rent, food, and utilities? What if they had to put a portion into savings and retirement accounts, or college funds? What if they had to pay income taxes? This might seem like taking the lesson too far, but the point is that parents often drop the ball when it comes to lessons in how to handle money and properly manage finances.
Is it any wonder, then, that so many students end up with serious debt problems and that so many adults end up living paycheck to paycheck? Every adult needs to understand finance, regardless of your income or how much money you have in the bank. It’s an essential part of surviving in this day and age. With many parents failing to impart financial wisdom and high schools having no mandate to offer such lessons, the burden falls to college courses to relay the information students will need to behave responsibly where their finances are concerned, not only in college, but beyond.
Naturally, this only works if students take such courses. Few majors actually require classes in finance. Those interested in business or finance degrees will almost certainly have to take finance classes, but what about students angling for UC’s master of health administration? What about legal, medical, or performing arts students? These majors don’t necessarily require finance courses, so why would students add to their workload?
While not every student will need finance courses to earn a degree, every student will, at some point, need to understand the ins and outs of managing finances. At the very least, every adult should understand the basics of wise money management. Budgeting, bookkeeping, and balancing ledgers – these are things that all adults must contend with on a personal basis. However, many professionals are also interested in starting their own business, sooner or later.
Effective money management is an essential part of running a successful business. Before an enterprise can even be launched, though, lenders will look at personal finances as part of the process for determining eligibility for a business loan. In other words, finance is important for everyone, which is why it pays to study this crucial subject in college.